Intervest Bancshares (IBCA) – Merger Abritrage – 5% All Stock Spread

Current Price – $9.39

Offer Price – $9.90

Upside – 5%

Expiration date – expected Q4 2014 or Q1 2015

SEC Filling


 Bank of the Ozarks, Inc. (“Company”) will acquire Intervest Bancshares Corporation (“Intervest”) and its wholly-owned bank subsidiary Intervest National Bank (“Intervest Bank”), with offices in Florida and New York, in an all-stock transaction. According to the terms of the Agreement, the Company will acquire all of the outstanding common stock of Intervest in a transaction valued at approximately $228.5 million, less the amount paid by Intervest to cash out all outstanding stock options, stock appreciation rights and stock warrants, and subject to other potential adjustments. 


Deal is very likely to go through as Ozark has done a number of similar acquisitions in recent years. One needs to deduct share option expenses and include potential dilution from stock based compensation to arrive at per share value. My calculations indicates that adjusting for these factors, the value per share should be c. $9.9/share.

This is all stock deal, therefore one needs to short Ozark shares to lock in the 5% difference.