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DOW - Dow Chemical Spin-off: Small Arbitrage Opportunity


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For those interested in these types of situations, there is a small (~$400 upside) but very low risk potential arb opportunity in DOW's spin-off of OLN. DOW has started an exchange offer (set to expire October 1) through which DOW shareholders can exchange their shares for OLN shares at a 10% discount (though subject to a cap on the max ratio). There is an odd lot provision that gives holders of fewer than 100 shares priority treatment. So buying/tendering 99 DOW shares shortly before offer expiration and shorting a corresponding number of OLN shares could be interesting.



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