VAL

[oldnemesis]

http://finance.yahoo.com/news/sherwin-williams-company-acquire-valspar-170000400.html

Purchase price is 113 cash.
Expected to close Jan '17

http://stockcharts.com/h-sc/ui?s=val

Trade:
VAL closed at 103.22
Oct 100/105 bull call spread for a net debit of $295

Price........... Profit / Loss....... ROI %
75.00.............. (295.00)........ -100.00%
85.00.............. (295.00)........ -100.00%
97.16.............. (295.00)........ -100.00%
100.00............ (295.00)........ -100.00%
102.95................. 0.00............. 0.00%
105.00.............. 205.00........... 69.49%
108.52.............. 205.00........... 69.49%
119.89.............. 205.00........... 69.49%
131.25.............. 205.00........... 69.49%

Note 1 : Don't do this unless you are experienced in dealing with acquisitions
Note 2 : Ordinarily I would want options dated to the expected deal close or beyond, but the Oct options are the furthest out available... the deal should be pretty well cooked by then.
Note 3: Best filled at the open.
Note 4: Note the 105 number related to divestitures.

 

[oldnemesis]

http://finance.yahoo.com/news/sherwin-williams-valspar-11-3b-211809966.html

http://news.morningstar.com/articlenet/article.aspx?id=746546&SR=Yahoo

http://stockcharts.com/h-sc/ui?s=val

New Trade:
With VAL at 106.87
Oct 100/95 bull put spread for a net credit of $35
Yield = 35/465 = 7.5% in 197 days or 13.9% annualized

Filled at $35