Arbitrage Opportunity(MCBF)

From http://biz.yahoo.com/pz/070216/113921.html

"The Board of Directors of Monarch Community Bancorp, Inc. (NasdaqCM:MCBF - News) announced today that it has preliminarily approved a going private merger transaction in which holders of less than 1,000 shares of the Company's common stock would receive $13.50 in cash for each share of Company common stock that they held prior to merger. Stockholders owning 1,000 shares or more will continue to hold their shares. The last sales price for a share of Monarch common stock prior to announcement of this transaction was $10.60 on February 15, 2007".

Even though this post is slightly late, this just shows that arbitrage opportunities are lurking around,waiting to be spotted by investors with a sharp eye.As of 6th March 2007, the current price of MCBF is trading at 11.80, so there is still possibility of making a decent profit on this trade.If we bought the stock at 11.80 and received 13.50 in cash once the merger is completed , then

Net Return=13.50-11.80/11.80=14.4%

Not bad for an arbitrage!