Recommendation: Long Net Servicos De Comunicacao SA (NETC) at $12.50
Target Price: R 29.72
Embratel and Embrapar are conducting a tender offer for all of the outstanding shares of Net Servicos (NET) at R 29.72. After hedging the currency exposure, shareholders can lock in a 4.2% gross return on the NET position. The time horizon of this special situation investment is likely to be less than three weeks. As the offer cannot be withdrawn, there is likely little downside to investors who can hedge well. Based on the above considerations, we suggest a long position in the stock while hedging their currency exposure.
A Brief Introduction of the Acquirer and the Target
Net Servicos de Comunicacao SA,...
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