M&A update: LEAP & PCS announce stock for stock deal;TXU arb spread tightens
Posted Sep 4th 2007 9:53AM by Paul Foster
Filed under: Top deals, KKR, Rumors, Texas Pacific Group, TXU Inc., 2007
Leap Wireless(NASDAQ:LEAP) implied volatility Elevated prior to PCS buyout proposal. LEAP, a provider of wireless communications services, is recently up $13.45 to $85.95 in pre-open trading. PCS proposed to acquire LEAP for about $5.27 billion in stock. LEAP total option volume of 801 contracts on 8/31 was below average. LEAP over all option implied volatility of 46 was above its 26-week average of 35 according to Track Data, suggesting larger price risk.
MetroPCS(NYSE:PCS) implied volatility elevated prior to stock bid for LEAP. PCS, a provider of unlimited wireless communications services, proposed to acquire LEAP for about $5.27 billion in stock. PCS option volume was light on 8/31/07 on 327 contractors. PCS over all option implied volatility of 68 is above its 16-week average of 50 according to Track Data, suggesting larger price risk.
TXU Corp(NYSE:TXU) volatility flat as Arbitrage spread tightens. TXU, manager of a portfolio of energy business in Texas, closed at $67.40. KKR & Texas Pacific Group announced in February the acquisition of TXU for $69.25. The deal is expected to close by year end. TXU October option implied volatility of 13 is near its 26-week average according to Track Data, suggesting non-directional risk.
Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Tags: KKR, LEAP, Leap Wireless, LeapWireless, MetroPCS, PCS, Texas Pacific Group, TexasPacificGroup, TXU, TXU Corp., TxuCorp.
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