Charter Hall Office REIT takeover by consortium led by GIC and Canadian pension fund. An arbitrage opportunity by going the other way?

I have been watching this deal by the sidelines. I was hesistant on engaging as the final value received on the deal is unknown.

The explanatory memorandum has given a ball park firgure that the US assets being sold should fetch around $1.11 if there are no other contingencies arising from any issues that might require them to keep a part of it.

In total the payment is $2.49 + $1.11 (subject to realised amount on the US assets). The first 7 assets were sold off and the returns would be $0.48. (This will be paid on 8th March 2012) Thus the remaining value should be $2.49 + $0.63 = $3.12.

Charter Hall Office announced today that the sale of the remaining assets will probably take longer thus incurring a cost of $3mm, or roughly 0.6 cents per share.

The last traded price for CQO AU is $3.07. Let assume we will receive $3.12 and we buy in at $3.07.

If you go through the Explanatory Memorandum, you'll find that $0.15 of the $1.11 (US asset sale component) will only be paid 6 months after the Implementation Date. Thus if we buy it at $3.07 today, and assume we get $3.12 in 6 months time, the IRR is only 2.88%.

Or rather i would look at it from a perspective, if i were to sell it at $3.07, put the money in the bank, at a 4.25% interest rate, i would get $3.134 in 6 months time. This seems like an opportunity for me. The risk is however, the US assets manage to fetch more than the expected $1.11, which I highly doubt.

Still an interesting case here. I might chinese/short some at $3.08 and above if I can get borrow.