Dividend Growth Forum

Ok, so there is obviously something that I'm not seeing here. So I'd be very greatful if someone could tell me what I'm missing.

As per their press release (http://ir.trinasolar.com/phoenix.zhtml?c...ID=2191453) they have entered into a definitive agreement to go private. Of course there will still be a vote but the way I see it, this deal is very likely to happen. The thing I don't get is... if they have offered $11.60 per ADS then why is Trina currently trading at around $10.40? I can see the price not jumping to exactly $11.60 because it will take some time for the merger to finish and for the owners to get their cash, however that can't explain for such a large difference.

I can buy now for $10.40 and early next year I'll receive $11.60. That would be a more than 10% gain over a roughly 6 month period of time... and with very little risk. So what is it that I'm missing?

This isn't a done deal. It requires a 2/3 vote by the shareholders to pass. A similar deal was attempted unsuccessfully in the past.

Relevant article:
http://seekingalpha.com/article/3994482-...es-private

Same thing is happening to one of my holdings, Westar Energy (WR). Currently selling for $55.33 and it has a buyout price of $60 next year. In this situation, I believe that the reason is that there are some class action lawsuits saying that the $60 price is too low.

Well, the vote went through and Trina Closed at $9.62.
So now we are looking at.. over 20% profit on a deal that, once again, looks to be as close to certain as possible.

I'll repeat the question: is there something I'm missing? I get that this transaction has been advancing slowly, but even if it would take a whole year to close that would still be a 20% profit in a year with close to zero risk. Even if it would take two years to close that would still be an excellent risk/reward ratio. Now, I'm skeptical because this really sounds too good to be true...

I can use margin with a 2% interest rate... seriously considering grabbing a big pile of TSL with margin. Your thoughts?

Well, turns out I wasn't missing anything. I had some shares (bought at $10.xx a long time ago) and I grabbed more in december at $9.42 since I just couldn't pass up on the apparent 20% profit.

The price jumped up yesterday after hours and I sold my shares today at $11.50.

If it sounds too good to be true... apparently it sometimes is true. :p

Nice arbitrage play. I thought about grabbing some in December when you made your previous post. For some reason that I can't remember now I didn't. My loss.