Much has happened in this deal, and it was positive news for all Merger Arb investors.
After FLSmidth put in an offer of $10.00. As expected, the Weir Group put in their $10.00 bid as well.
Subsequently FLSmidth increased their offer to $11.00
The takeoverpanels have come out with their ruling of the case submitted by Weir Group,
In essence, it is not prohibiting FLSmidth to proceed with an offer higher than $7.20 and FLSmidth has to advertise in major publications to seek out investors who sold their shares before the $10.00 was made and pay them compensation as assess by an arbitrater. The payment shall not exceed the difference of $9.87 ( the vwap price on the day the $10.00 offer was made) and $7.20.
Now i guess the billion dollar question is, will you take your money now and run or expect a bidding war?
In Weir's offer, it gives the rights to Weir to terminate the scheme of implementation if the Takeover panels does not prohibit FLSmidth to proceed with an higher offer than $7.20. The key word here is the "rights", not automatically terminate.
At the levels LDW is currently trading, $11.18, it seems to imply that Weir is going to come in with another bid.
I would not exit the trade now. The risk now is there is no bid coming in and you receive $11.00 or potentially another bid comes in at another +10%. I would wait and see. This is a case where you would want to let your profits run.
***Additions****
Seems like Weir group has put in an appeal to the Takeovers Panel on their ruling. I would think this is nothing other than to buy more time for them to plan and execute their next action. I would think it is highly unlikely the Takeovers Panel will reverse their ruling. It will be really messy if they do so. The path of least resistance is to stand by the original ruling.
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