Yuanxi Zhang
Long/short equity, value, special situations

AFP Provida: 20% Annualized Return From Tender Offer With Downside Protections

Recommendation: Long AFP-Provida (NYSE: PVD)

Catalysts: Commencement of tender offer

Expected Annualized Return: 21.8%


AFP-Provida (NYSE:PVD) is an under-followed Chilean pension fund manager that will commence a tender offer to purchase all the outstanding ADS soon. Simply buying the shares and tendering them will generate a 4.52% absolute return if the tender offer is consummated by the end of October. If the offer is closed in November or December, shareholders should receive an additional interim dividend reflecting the earnings in the first half of 2013, which will boost the absolute return to 7.78%. In the very unlikely case that the acquirer of the company, Metlife, decides to walk away from the deal, the company's fair...

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