If the deal goes ahead, then yes, buying now makes a lot of sense: a nice profit of roughly 33% in the space of five or six months is nothing to be sneezed at.
But that "if" is what you need to look at. What happens if the deal doesn't happen? In that case, you'll have bought shares in a company that are absolutely certain to drop back to 10 cents or less (bear in mind also that this analysis assumes that there isn't a counter offer between now and then.)
That risk is why there is an arbitrage opportunity right now - the arbitrage is based on the assumption that the deal will happen, whilst the downside risk of it not happening is not insignificant.
Note that I'm not saying don't take up the opportunity. I'm also not saying do take up the opportunity. I'm only saying: go into it with your eyes open, and acknowledge that this is not a risk free opportunity.
PEK Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
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