120k on the bid, page-9

wondera, you're not missing anything, but there certainly are reasons why SNN is trading at a discount to the implied value of the transaction.

1. CMO's upwards climb has only occured over the last week or so, and may not be fully factored in to the SNN share price.

2. By holding SNN, you are tying up your funds unitl completion of the takeover, which could be months away.

3. By holding SNN, arguably the risk associated with the takeover being unsuccessful is greater. If the takeover is unsuccesful, you can be guaranteed that you will see the SNN share price immediately fall to the levels it was trading at before the announcement. CMO on the other hand has better potential to cope with the takeover being unsuccessful. They are the company on the move, looking to grow its customer base and possibly continue acquisitions. Its current share price, although influenced by the takeover, is not dependent on it (but I suspect the rights issue would have a lot to do with it).

However, if your happy to keep the funds tied up for a couple of months, and are confident that the current CMO price levels will be maintained and the takeover will be successful, by all means, the opportunity exists. It is by no means some sort of arbitrage opportunity however, as there is still plenty of risk attached...