I agree that cash is tight for COV with the latest Quarterly Report showing only about $1.7 mill left.
I would imagine that with TS on the COV board he would have had good information on which to base his takeover decision on.
After reading the Bidders Statement I don't think that there will be too many risks with buying COV shares and then not having them convert to CFE shares if you want.
This is because I couldn't see any defeating provision in the Bidders Statement saying that is acceptances fall below a certain percentage then CFE could walk away.
Thus if a shareholder wanted to buy into CFE the best way to do so before the 11th September would be to buy COV provided that:
2.4 x COV SP < 1 x CFE SP
On current SP's (13.5c and 37.5c) the arbitrage would be around 13.6%... this is a moving target of course as the SP's move on a daily basis.
Please let me know if I have missed something fundamental here, but seems to me that a small arbitrage % could be made if you are happy buying CFE.
Cheers John
COV Price at posting:
13.5¢ Sentiment: None Disclosure: Not Held
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