Does this present a Takeover opportunity for you?
Will this deal go wrong, or will BTG shares rise even further?
- The chart shows the BTG share price movements since 2015.
- 20 Nov: Boston Scientific agreed to take over specialty health-care company BTG for £3.3bn.
- The takeover offer implies a share price of 840p/share (37% premium to Monday’s closing price)
- Shares now 822p (at time of writing)
- Trading close to 834p record highs (seen in January 2015)
- Will the deal be abandoned, will the deal fall through or will another even higher offer emerge to acquire the company?
- Source: Bloomberg, FT, Reuters, DJ Newswires
Trading BTG – An Example
Let’s say you think that BTG is likely to rise further as a result of a takeover offer beyond 834p all-time record highs and beyond the 840p implied takeover offer price. You decide to buy exposure to £10,000 worth of BTG using a CFD, at the current price of 822p. To do this, you need £2,000.
For the purpose of this example, let’s assume the BTG share price rises by 10%. Your profit would be £1000, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Sentiment towards the deal sours and BTG shares fall 5% and hit your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.