Global Value Investing

[throwerw]

Good news out of PBG/PBN today. I think the fact that PBG is entering into the DRIP for half of their PBN shares could be a sign that they are preparing for a spin-off within 2 years. If they do not need the dividends, then they don't need to hold the shares within the parent company.

A long/short pair trade looks even more interesting now that the HBU is being given negative value.

Short 103 shares PBN $1095
Long 100 share PBG ($901)
2 years dividend paid ($192)

Let's say PBN shares are spun out in 2 years. You get:

$194 - From close in price gap
$96 - new PBN shares cost basis
$500 - 100 shares in HBU, Archon (estimate)