Not specifically but that is certainly one of a number of...

Not specifically but that is certainly one of a number of possible outcomes here. A true arbitrage is executed simultaneously so there is no risk. After that there are probably misnamed arbitrages with varying degrees of risk. So for example let's say BHP launched a takeover for company X at $10 p/share and that share is then trading at $9.80 whereas the discount should actually represent the discounted value of money by taking your money now versus when the transaction actually settles. There is also a slightly harder to price discount that should apply to the risk of the deal falling through. Let's say that you think it's a near certainty and the stock falls to $9.50 then you could arbitrage that trade although to stress it's not a pure risk free arbitrage. The TMT /AVL deal has so many hurdles clear that you could really get caught. Simply buying TMT is fraught with risk. The only slightly less risky trade obviously is selling AVL if you have them and buying TMT.