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Given the extent to which WPL has outperformed BHP since the announcement of the merger (WPL up by 42%, BHP by 22%), BHP now looks like a cheap entry into WPL for those with a constructive view on energy market fundamentals. (Or, viewed another way, BHP's non-Petroleum assets are today being sold proportionately cheaper than they were at the time of the merger announcement.)

Not just that, but those possessing beady eye and bushy tail will have identified potential for a good, old-fashioned arbitrage opportunity that arises in relation to the mechanism of the in-specie distribution of BHP's Petroleum business; namely, that it will take the form of a fully franked dividend which could give rise to a substantial:

1.) franking credit rebate if BHP shares are held in a super fund, and
2.) tax asset on the capital account, irrespective of the structure in which BHP shares are held (individual, investment company, trust or super fund).

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