Monday, April 05, 2010

3Com On Track for April Close

The acquisition of 3Com (Ticker: COMS) by Hewlett Packard (Ticker: HPQ) appears to be on track for an end of April close. The only road block is the approval by China’s Ministry of Commerce. Here’s a blurb about this deal from TheDeal.Com:


The waiting period for the Chinese Ministry of Commerce to complete its review of Hewlett-Packard Co.'s $3.1 billion merger with 3Com Corp. should expire April 25, but there has been talk that the review might be done before then.

Chinese authorities have reportedly sent out inquiries for comment from 3Com customers, which hold roughly a third of China's network switching and routing market, with responses due April 5. The ministry could render a decision on the deal by April 12, sources say.

The review has been a subject of concern because of past interference by the U.S. government over national security issues in a buyout of the company by a Chinese entity.


The risk arb spread is still very attractive (~ 31.68% annualized return at the recent price of $7.73) assuming an April 30th close. I added more to my 3Com position today at $7.73. My average price is $7.617. Here are my 3Com trades:

1/27/10 1.5X @ $7.47
1/27/10 1.5X @ $7.53
2/3/10 3X @ $7.44
2/19/10 1.5X @ $7.59
2/25/10 2.5X @ $7.60
3/17/10 10X @ $7.60
4/5/10 10X @ $7.73

Now, just have to sit back and wait…


Post a Comment

<< Home