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With the Broadcom acquisition of VMware cleared by regulators and the deal closing on Oct 30, seems like this is a done deal. The deal is for $142.50 cash or 0.252 shares of AVGO/share of VMW. The cash/stock selection will be prorated such that it’s 50% cash, 50% stock. Given the current price of AVGO, a 50/50 split values each share of VMW at $179. VMW is currently trading at $165. This is an 8% discount for something that seems to be a sure thing. Am I missing something?
What you’re missing is if avgo price can flucuate between now and then. To hedge you’ll have to buy VMW and short AVGO at some mathematical ratio. Someone good at math will know
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