Wednesday, May 28, 2008

Another Arb Play: Getty Images

I know it’s been awhile since I’ve posted. I just finished building an arb position in Getty Images (Ticker: GYI), which is being acquired by the private equity firm, Hellman & Friedman, for $34 in cash. This transaction is expected to close by the end of June or early July. I see very little risks in this deal. The private equity firm is actually paying $1 billion in cash and has financing in place for the other $1 billion or so. There’s currently a spread of ~ 1.8% and if you annualize that it comes out to ~ 20%.

I’m starting to like the arb game, but of course there’s always a risk that the deal falls apart and then you’re vaporized.


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