Tuesday, May 10, 2016

A Small Arb Play - Morgan Hotel Group

I picked up small position (~2% of portfolio) in Morgan Hotel Group (Ticker: MHGC) today at $2.10. The hotel chain is being acquired by SBE for $2.25 per share in cash. The company is guiding for a Q3 / Q4 close. Based on that guidance, I would model a close by October (hopefully sooner!). My potential gain would be + 7.14% over a 6 month period (~14.95% annualized return). There is a good possibility that this deal can close sooner than October. The nice arb spread maybe attributed to its small market cap, which is avoided by most of the large arb funds.


At May 12, 2016, Anonymous Anonymous said...

YY deal cancelled, let's wait for QIHU now.. what you think?

At May 12, 2016, Blogger Money Turtle said...

I think QIHU will eventually close, but it's going to take some time to work out the money transfer.

At June 03, 2016, Anonymous Sue-Ann said...

Patience will certainly help you gain.


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