The overnight fall of SVM was softened by the rise in the USD....

The overnight fall of SVM was softened by the rise in the USD.

	SVM Price Share price	2.39	USD
1		3.5587339	AUD
2
3	Cash per share	0.19	AUD
4	Scrip	0.0967
5
6	Consideration per share	0.53412957	AUD

I see PRU as being in a stronger position now.

For SVM, offering scrip is a double edge sword - it lessens any debt burdens, but any increase of cash offerings will also put pressure on the share price. So, if SVM are to increase their cash per share, you'd expect to see the share price also fall.

I bought ORR @ 0.51 as a hedge and an arbitrage opportunity - but have decided to sell out @0.53. Here's my reasoning:

• I don't see SVM increasing their offer significantly,
• Arbitrage is over - if the acquisition is (somehow) successful, I don't see myself making a return - as many ORR shareholders will sell SVM upon receiving their shares.
• I believe PRU are in the driving seat with their cash balance, I believe they can do a full cash offer, which ORR shareholders would prefer to scrip. I mostly held ORR as a hedge against a poor offer from PRU. I don't see this as necessary anymore, as given the current offer, PRU can probably offer far less (perhaps ~60c-62c cash).
• Tiny risk of PRU doing a block sale to another party, leaving only the SVM offer on the table.

Reasons I might regret selling:

• PRU offer at a significant premium.
• SVM increase their offer (I would still benefit as a PRU shareholder if this was successful) - I wouldn't be if PRU then go above.
• Dramatic increase in POG, raising SVM's share price. Though, their share price has fallen far more in the last month than the POG.

The risk / reward isn't there for me as it stands. I welcome contrarian views!

Cream.