Dan Walker

Market Skepticism About BofA / Merrill Deal

Given that the combination of skeptics and fear have prevented MER stock from reflecting the price of the offer on Monday, an arbitrage of long MER and short BAC should produce profit with the $5+ risk/reward the premium for the risk of the sale falling through given an 0.8595 stock swap price and BAC's Monday closing price of 26.55. I really don't see how Merill can back out and BAC seems to love the deal so short of a shareholder revolt (like the one last year to keep this crap from happening at Bear or Lehman?) its done. Shotgun weddings seem all the vogue on Wall Street these days.