Puget Sound Energy takeover will not be completed this year

Puget Energy says that, assuming that the utilities commission approves it, the takeover will not be completed this year:

Puget Energy also noted that considering the number of business days remaining in 2008, the merger transaction is now not expected to close this year. The merger agreement provides that the parties close 15 business days after all closing conditions have been met, including approval from the Washington Commission.


This is another lesson for risk arbitrageurs to price in delays into deals. This is one of the reasons I tend not to look at annualized returns and try to aim for absolute returns of 15% or more (depending on risk.)

Comments

  1. AnonymousDecember 11, 2008 at 5:25 PM

    disappointed that it isn't closing this year, but likewise, it's one of the reasons why I don't bother with 3-4% spreads.

    ReplyDelete
  2. Sivaram VDecember 11, 2008 at 8:25 PM

    Yep... I share similar thoughts...the ones that must get killed with these delays are the professional arbitrageurs. They take positions with less than 5% return and use leverage to boost it. Small investors can just hang in there, as long as the opportunity cost isn't too great...

    ReplyDelete
  3. Sivaram VDecember 12, 2008 at 9:54 AM

    Also, just remembered that this may or may not mean much. The share price may trade up if the commission announces their decision. So, we'll see...

    ReplyDelete

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