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JayWin

3,607 Posts.

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22/08/20

09:23

Post #: 46734723
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Originally posted by JayWin: ↑

I cannot help but think that VLT got the better end of the deal and we are overpaying for VLT.

Does anyone here think there is a chance that the deal may be renegotiated?

It is interesting to me that the arbitrage gap hasn’t yet closed.

I mean, I can theoretically buy 10,000 of DTC now for $14,935 by buying 29,000 VLT.

Yet, if I wanted to buy 10,000 DTC directly, I have to pay $16,400.

That is a gap of $1,465 which is almost a 10% discount.

This tells me that the market thinks that there is a substantial risk that DTC may pull out of this acquisition, and there is a substantial risk in holding VLT.

And why would DTC pull out if they scored a good buy?

This is why I am forming a conclusion that the market thinks that DTC could have overpaid, and could possibly pull out or renegotiate the offer.

Thoughts anyone? I have shares in both, so not too fussed - but obviously want to understand the transaction and the arbitrage a lot better.

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@ValueSearch
@thunderhead1

Any if you revered investors have any thoughts on the above?

DTC Price at posting: $1.82 Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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Ann: Trading Halt, page-66

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