Thursday, April 02, 2009

Nova Chemicals Arb Play

I entered into a new arb play: Nova Chemicals Corp (Ticker: NCX), by picking up some shares at $5.84. This company is being acquired by International Petroleum Investment Corp (IPIC) for $6.00 in cash. The shareholder vote is scheduled to take place on April 14th with an expected closing by April 30th. If the deal closes by April 30th, we’re looking at an annualized return of ~ 35%. This looks like a fairly solid deal as opposed to Forsys Metals (Ticker: FOSYF.PK), where there has been a lot of talk and no action.


At April 03, 2009, Anonymous Anonymous said...

Are you sure it will close in April. I read 2nd Quarter of 2009. Also, according to an article it was on the brink of bankruptcy in February.
Have you looked at ENPT or FNET?

At April 03, 2009, Blogger Money Turtle said...

I wish I was 100% certain that this deal will close by the end of April, but you never know. When the deal was announced the CEO of NOVA Chemicals stated that the deal can close in 60 – 75 days. With that time frame, you’re looking at end of April to the first week of May.

FNET does look interesting; I’m starting to do some digging on that one. Thanks for the heads up.

At April 03, 2009, Anonymous Anonymous said...

This one probably won't close before the end of this month. Too many approvals needed in too short a time. Looking more like middle of May if things go well. Might want to go here for deal timing research/analysis:


At April 11, 2009, Blogger r&b said...

Like your blog, thanks for the add. I'm an ESTJ and you're an ISTJ haha!

At April 14, 2009, Anonymous Anonymous said...

Nova shareholders approve takeover by IPIC 2009-04-14 20:29.
Deal is going as planned. Expected to close late May, early June. I assume that you can receive Cash by the end of June. I bought a few shares. If everything proceeds as planned, do you receive cash automatically or do you need to tell your borker? Thanks, David

At April 14, 2009, Blogger Money Turtle said...

Aspiration's Purse: Thanks for the comment. I like your analysis on National Oil Well. I like the drillers and have a position in Diamond Offshore.

Dave: The next big date is the EU approval. The company filed for EU approval on 3/31 with a provisional deadline of 5/11. I'm definitely looking for a closing in May. When the deal closes, the cash will be deposited into your account automatically. You don't have to do a thing unlike the tender offers.


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