Thursday, July 26, 2007

Expedia Tender Offer

Expedia, Inc. (EXPE) has announced a tender offer for 25 M shares between $27.50 and $30.00. The offer expires August 8 and includes odd lot preference. Shareholders with less than 100 shares will be tendered first. For more details go here [SEC Filing]. With shares going for approximately $26.15 today, I made several orders for 99 shares in the separate accounts that I manage. This implies a 5-15% return, and I expect it to close within a month. One caveat is that brokers can charge steep fees ($40-50) to tender shares.

My first experience with odd lot tender offers was AutoNation, Inc. (AN) last spring and I was pleased with those results. This arbitrage is about as riskless as it gets.

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