I am not convinced that other bidders won’t be jumping in on BEXP due to the bargain basement tender offer. In fact SunTrust made comments to this point this AM. If you look at the options actions, you will notice that more than 34,000 November $37 and $38 contracts are suddenly open! This contrasts with 271 November in the money $36 contracts. Obviously, I am not alone on this premise.
I state this with enough conviction that I personally, have purchased 350 November $37 or $38 contracts. By the numbers if there is a 25% probability of other bidders jumping with say a $40 dollar bid or 1,300% on a 15 cent per share purchase is a fair gamble… but not one to bet the farm on.
Now what would the return be if bidders ran this to $48 or the 60% premium paid for PetroHawk?