Puget Energy: An Interesting Spread to Watch

Shares of M&A target Puget Energy (PSD) jumped last week as Washington state regulators finally approved the company's acquisition by Macquarie and a group of pension funds.

Still, rather oddly, the shares are well below the $30 take out price (at $27 and change right now) for a deal that should be closing in 1Q09 as far as I have understood. Perhaps financing and Macquarie & Friends' commitment to the deal is in question, but hard to see how as we have large pension funds involved and the investors have waited patiently for a regulatory outcome, now in their favor.

A M&A worth watching. Some similar spreads have been captureable in recent months since confidence is generally lacking these days.

Disclosure: None

Comments

[Norwell:]

Financing is not in question having been secured back in June.

The only fear appears to be Canadian fickleness as in the BCE failure.

Jan 06 08:21 AM

[Marc Rappaport:]

I have been wathcing MA spreads all throughout December and, for the most part, deal spreads are wide. Take for example, OVEN/MIDD which as recently as December 23 (TWELVE DAYS AGO) had a spread of 11.22%. I believe that deal closed yesterday as far (as the reorg department at my brokerage firm claimed.)

Fear permeates many areas of today's markets and Merger Arb seems no exception.

Jan 06 09:32 AM