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Grifols, S.A. Message Board

  • bbarberayr bbarberayr Jun 7, 2011 9:08 AM Flag

    GRFS / GIKLY Arbitrage

    Now that GRFS has been issued, there is a big valuation gap between the "B" shares and the common which are sold through the GIKLY ADR - over 40%.

    I would think a lot of selling is going on in GRFS by the arb players who just want to take their profits in the TLCR buyout and move on, but once this forced supply has been absorbed, I would expect this valuation to narrow and profits here. I think a valuation discount of about 10% seems to be on the high side, so 30% profit opportunity.

    The GRFS were issued as "B" shares I believe in order to keep control within certain Spanish shareholders, but they actually have preferential treatment over the common shares in many ways other than the right to vote.

    Be interested in hearing anyone else's thoughts on this.

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