Hey thanks Eqz, that's a handy, at a glance, table. PAR up 5% at...

Hey thanks Eqz, that's a handy, at a glance, table.

PAR up 5% at $44 and much higher intraday so great vol already highlighting the value of the option. There is always some risk the deal breaks and here break fees are small at A$1.3m both sides. Although, I think that probably reflects the fact that both parties are very motivated to close so break risk relatively small in my view. More event risk than risk of one party getting cold feet.

This not my area but it looks to me like the implied option is worth about US$7.5 (using vol of 57 based on their traded options and 3 months through to the June shareholder election date). So that's currently about AUD 9 cents of value to Task shareholders I think (0.015*$7.5*0.5/0.66). That includes the intrinsic value so I believe that should be added to the initial share/cash value of $0.90 to get fair value. So fair value of Task today is 0.99 cents. (Like Macklemore said in Thrift Shop).

For me though, the the option is worth more than 57 vol as a directional play right at this moment as we wait to see the impact on the share price - especially post a bit of selling by the Risk Arb crowd to hedge long Task positions. Task is potentially transformative for PAR and it was bought for good underlying value as far as software purchases go at below 20x net cash flow. That may not have been immediately apparent to outsiders as historical earnings are still depressed by non-cash charges associated with the merger. Someone mentioned to me that it had sold on a nose bleed multiple, I don't think that's the case (SMP moved up on as a comp on that basis).

Anyway, I will be holding and hoping that PAR can get a run on.