Special Situation in APW President Systems

APW President Systems informed the exchanges on 7 January that Schneider Electric has acquired 55% shareholding in APW President Systems from promoters at a share price of INR 195. SEBI rules require an open offer of 20% to the minority shareholders. The announcement of the offer has been done and the specified date is February 4, 2011. Dates of opening and closing the offer are 2 March 2011 and 21 March 2011 respectively. The share price is currently hovering around INR 182. Let's analyze the payout of this special situation.

The promoters hold 71.3% (4312501) shares in the company while the general public holds 28.7% (1735499) shares. The open offer is for 1209600 shares, i.e. the acceptance ratio will be 69.7%. If an investor buys 100 shares of APW President Systems at INR 182 today, the total investment would be INR 18,200. If 70 shares get accepted in open offer at INR 195, he gets 13,650 back.

Special Situation in Solvay Pharma

This is my first post on a special situation. Abbott of US announced to acquire pharmaceutical business of solvay group of Belgium for EUR 4.5 billion on 28 September 2009. Both Abbott and Solvay has listed subsidiaries in India. Since Solvay has a listed subsidiary in India, SEBI's takeover code comes into effect and the acquirer, which is Abbott in this case, needs to make an open offer. The open offer has been announced and the offer price is INR 3054.73. The last traded price of Solvay shares on BSE is INR 2879.85 on 17 Feb 2010. So how can a value investor take advantage of this opportunity?