Monthly Archives: May 2016

CTC Media announces cash-out at $2.05/share

I wrote about CTC Media (NASDAQ: CTCM) a bit more than two months ago as an unusual merger arbitrage play. Unusual, because the exact price shareholders would receive was highly uncertain and because it was pending a licence from the OFAC because a major shareholder is subject to US sanctions. The licence was granted a month ago, and last weekend the company also announced the final cash-out price of $2.05/share and an expected closing in mid May.

CTC Media logoWhen I initiated my position the stock was trading at $1.85, so this represents a 10.8% return in less than three months. This is a pretty good result, but of course it could be that it was a risky transaction where the risks simply didn’t materialize. I personally think that that wasn’t really the case, but because there was uncertainty about the final cash-out price (in combination with the Russia factor) everybody took a conservative stance and was only willing to buy the stock at the low-end of the expected cash-out range.

Disclosure

Author is still long some CTCM