Merrill Lynch Transaction Not Exactly Feeling Mr. Market’s Love

By Equity Private

Last I checked, Bank of America’s offer was something like .8595 shares of BAC common for each share of Merrill Lynch common. Looking at BAC’s current $28.22 price, that sounds like a $24.25 per share offer.
MER has been slipping steadily since after-hours trading just after the announcement had it in the mid-20s. Implied volatility for at the money calls 30 days out is sitting just below 200% as well. With spreads and volatility like that, someone in a risk arbitrage shop is going to clean up. And someone is going to take it on the chin.
I wonder if that long, even slide on my MER chart is just thankful equity holders bleeding out into the risk-arb crowd though.

Comments (5)

  1. 1
    Posted by guest | September 16, 2008 at 10:30 AM

    1st

  2. 2
    Posted by guest | September 16, 2008 at 10:46 AM

    Where is the filing?
    Little suspect that nothing up?

  3. 3
    Posted by guest | September 16, 2008 at 11:10 AM

    Where is the love? Here -
    http://moneyistheway.blogspot.com/2008/09/where-is-love.html

  4. 4
    Posted by guest | September 16, 2008 at 11:15 AM

    A BoA shareholder might be a very happy person today.
    They learned in first hand how to burn money (a lot of) in a single stroke

  5. 5
    Posted by Anal_yst | September 16, 2008 at 11:21 AM

    mmm vol, delicious

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