BULM is trading at $1.09 / share when the offer was for .45 shares of EMXX and .11 cents cash. Assuming EMXX is trading at $2.50 per share which is LOWER than the current market price (around $2.55) that makes the compensation for BULM shares worth approximate $1.23 - a 10% premium to current prices.
Throw in the fact that BULM management and friendly shareholders own 45% of the shares - they only need a small minority to push this transaction through. This looks like a pretty good 5-10% arbitrage opportunity to me.
Anybody know of any fault in my logic?
Your Friendly Neighborhood, Spider
Disclosure: Owned BULM shares previous to today and bought at 1.04 and 1.12 today - and may buy more.
I agree. I would also note that it would seem smart for Newmont to buy BULM to eliminate the royalty cost and even the lawsuit. If it didn't want the other parts of BULM it should be able to sell them off.
I'm not sure if NEM would be interested in buying BULM at a higher price, but if my numbers are correct this is still a very nice arbitrage opportunity if the deal goes through. I emailed investor relations regarding the terms of the transaction to make sure they are accurate (.45 shares EMXX and .11 cents cash) - if they are this is a serious opportunity.