Innovative Foods - Money for Nothing, Sequel 2

I had written earlier about a special situation opportunity in Innovative Foods. The link is enclosed below.

http://investingvalues.blogspot.com/2009/11/innovative-foods-money-for-nothing.html

The interesting part in this opportunity arose post the closure of the delisting offer that the promoter made at Rs 34.5. As per SEBI laws a company has to provide the last open offer/ delisting price to all the remaining shareholders post delisting of the company for a period of 6 months.

So you are assured of Rs 34.5 for your holding even if u hadn’t tendered it in the delisting offer. Typically it takes around 45-60 days post the closure of the delisting offer for the actual delisting to take place. It should on the outside take about a month more to tender your shares to the company and get your money.

So the opportunity arose bcos post the closure of the offer, I was able to buy the stock in the market between Rs 31.75 and Rs 33 with a average acquisition cost of Rs 32.05.

It took me about 4 months in the entire transaction. Part of the delay was bcos I went on a vacation and hence missed one of the redemption cycles. But overall it gave me risk free return of about 7.5% in a four month tenure. Might not excite too many ppl but I love risk free return like this.