Sunday, November 15, 2009

Innovative Foods - Money for Nothing

I came across this corporate announcement on Innovative Foods.{4038BCAC-2189-44EE-AD2C-807B2263BE72}&param1=1

Innovative Foods is a Chennai based company which was a BIFR case. Based on the BIFR proceedings the promoters were asked to bring additional capital which resulted in their stake increasing to 93%. According to the BIFR order the promoters has to give a exit option to the remaining shareholders of the company and the company arrived at the exit price of Rs 34.5 to paid to all public shareholder who tender their shares. I have enclosed the link to the offer document.

The offer is open till Nov 19th.
The stock was trading around the 32.15 mark after the announcement date and currently trades around 33.65.

So u can technically buy the stock in the market at this prices and tender at Rs 34.5 and be assured that 100% of you shares will be accepted and money paid to you.

So whats the catch?
Not enough trading volumes and high impact cost so u can deploy very small amounts of capital.

But it is a case of “ Money for Nothing”.

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