Split-Offs proved to be very lucrative in generating low risk arbitrage returns. Just last week yet another split-off (ECL/APY) closed successfully with $2,100 ‘riskless’ return for hedged trades (c. +11%), while at at the same time unhedged positions delivered $10,000 (c. +50%-70%) in a month. The difference in pay-offs is clearly very material; however, higher returns seemingly come with higher risks (exposure to share price fluctuations).
Current Price –$142.99
Offer Price – $153.76
Upside – 7.53% or $1050 for Odd Lot holders
Expiration date – 13th of December, 2019
Danaher has updated the split off offer by increasing the upper limit and the situation became profitable one more time.
Current Price – DHR $85.44, NTCT $38.42
Offer Price – $107.53 stock of NTCT for $100 stock of DHR (subject to upper limit)
Upside – 7.5% or $636 for Odd Lot holders
Expiration date – July 9, 2015
Current Price – DHR $87.26, NTCT $41.27
Offer Price – $107.53 stock of NTCT for $100 stock of DHR (subject to upper limit)
Upside – 5.3% or $450 for Odd Lot holders
Expiration date – July 8, 2015