It's rare to see a utility make it onto anyone's list of "stocks to watch on Monday" or be featured prominently on MarketWatch. After a quiet six months and plenty of skepticism about the merger, we're finally there and getting noticed.
What I don't understand is why is Allegany stock only @ $25.15 a share when in a few weeks FE is buying them for $27.65 per share? I know it's an "all Stock" deal but why the over $2 a share discrepancy?
27.67 was the price for 0.67 of an FE share at the time of the announcement. At the time of the merger, AYE holders will receive 0.67 shares of FE for every share of AYE. So if we assume the merger is no longer in doubt, AYE shares are worth exactly 0.67 the price of FE shares minus the difference in expected dividend payments between now and the merger and that looks about right, although I haven't calculated it down to the dividend difference.