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Suppose BlackRock (BLK) agrees with purchase T. Rowe Price (TROW) with stock. BlackRock agrees to give 1 share of BLK stock for every 3 shares
Suppose BlackRock (BLK) agrees with purchase T. Rowe Price (TROW) with stock. BlackRock agrees to give 1 share of BLK stock for every 3 shares of TROW outstanding. As a result of the deal announcement, TROW increases from $101/share to $154. BLK stock trades at $492 immediatety tollowing the deal announcement. What is the appropriate merger arbitrage strategy and expected prott per TROW share in this scenario? o a. Buy 1 Share of BLK, Sell 1 Share of TROw, Prort or $53 per TRow share b. Buy 1 Share of BLK, Sell 3 Shares of TROW, Protit of $30 per TROW Share C. Buy 3 Shares of TROW Buy 1 Share of BLK. Profit of $10 per TROW Share d. Buy 3 Shares oT TROW, Sell 1 Share of BLK, Prorit or $10 per TROW Share e sell 3 Shares of TROW, Sell 1 Share of BLK, Profit of $63 per TROW Share
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