Will PETC investors be buying PETM now that PETC is going away as a public company? I think so. Just think, $450M looking for a new home and PETM is really the only logical choice in the Pet Supply sector. Even if only a modest percentage (say 25% - $110M) moves into PETM it could move the stock much, much higher.
I actually think you may be right that some PETC funds may go into PETM. But I don't think ot will be as much as you guess. I think some money left Petco after the LBO announcement and went into Petsmart earlier;perhaps that helped push PETM from $4 to $5.
And I do agree that some more will follow after the stockholders get the LBO funds. Perhaps in 5-7 days?
My feeling is that many PETC investors who continue to want exposure to the Pet Supply business will buy PETM. I think many (like you) are already PETM shareholders and will add some to their positions when they get the LBO proceeds. I can't think of another logical choice.
I would be probably be a buyer myself, except I know PETM all too well. I will wait until the long promised improved results materialize.