Thursday, October 18, 2012

More Nexen and Some Dollar Thrifty

I added to my Nexen, Inc. (Ticker: NXY) position today at $25.71 with an average cost basis of $25.75. I like the odds as the November 11 deadline approaches. Like I said before, this deal is positive for both Canada and China. Of course there will probably be some conditions placed on the approval of the merger, but it shouldn’t be a deal breaker. This will be the start of a symbiotic relation between these two countries.

I also picked up a few shares of Dollar Thrifty Automotive Group, Inc. (Ticker: DTG) today at $85.06. Hertz Global Holdings, Inc. (Ticker: HTZ) has agreed to acquire Dollar Thrifty for $87.50 in cash. The FTC needs more time to review this deal and Hertz has agreed to an extension not to close this deal before November 16. I wouldn’t be surprised if the deal closed shortly after the extension date. I'm factoring in a closing by the end of November, which would equate to a potential total return of 2.86% (~ 23% annualized return assuming a closing by November 30).


At October 22, 2012, Anonymous Anonymous said...

Surprising news from canada over the weekend on foreign acquirers - NXY looks quite speculative now

At October 22, 2012, Blogger Money Turtle said...

Yes, the headline news in the rejection of Progress Energy & Petronas was a big surprise, but I don't think the risk profile in the Nexen + Cnooc merger has changed much. I added to my Nexen position today.

At October 25, 2012, Anonymous Anonymous said...

Now DTG is getting FTC pressure... tough times for merger arb

At October 25, 2012, Blogger Money Turtle said...

Fortunately, DTG is not a big position. Just need to be patient and not over react, but definitely, need to be careful out there.


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