NBD announced a conditional tender offer to acquire all shares of Williams at a fixed exchange ratio of 0.85 in March 2020. The offer is subject to a condition of receiving at least 75% acceptance within 2 months. Acquirer price at announcement is $11.5. Target closing price at announcement was $9.5. Assume dividends for target ($0.15/share) and acquirer ($0.1/share) and commission costs of $0.06/share. You expect the acquisition will complete in 3 months with 100% probability, (a) Identify an arbitrage strategy which can be implemented on the announcement day and calculate net arbitrage spread. (6 marks) (b) Suppose you have implemented the strategy as identified in part (a). On the next day, as a surprise to the market, ACCC raises its concern on the influence of the acquisition on market competition. Without calculation, explain how this event may influence your expected arbitrage spread. (2 marks) (c) In addition to the regulatory risk as indicated in part (b), identify another risk implied in the provided information. (2 marks) Answer the questions in the space provided below. Clearly label each part of the question in your answer (i.e. part (a), (b), (c)). NBD announced a conditional tender offer to acquire all shares of Williams at a fixed exchange ratio of 0.85 in March 2020. The offer is subject to a condition of receiving at least 75% acceptance within 2 months. Acquirer price at announcement is $11.5. Target closing price at announcement was $9.5. Assume dividends for target ($0.15/share) and acquirer ($0.1/share) and commission costs of $0.06/share. You expect the acquisition will complete in 3 months with 100% probability, (a) Identify an arbitrage strategy which can be implemented on the announcement day and calculate net arbitrage spread. (6 marks) (b) Suppose you have implemented the strategy as identified in part (a). On the next day, as a surprise to the market, ACCC raises its concern on the influence of the acquisition on market competition. Without calculation, explain how this event may influence your expected arbitrage spread. (2 marks) (c) In addition to the regulatory risk as indicated in part (b), identify another risk implied in the provided information. (2 marks) Answer the questions in the space provided below. Clearly label each part of the question in your answer (i.e. part (a), (b), (c))