Biotech Values

[DewDiligence]

PFE-ZTS addendum: Anyone who owns ZTS and is thinking of selling it in order to buy PFE and then reacquire ZTS at a 7% discount in the upcoming swap should think again! There are two problems with such a tactic:

1. The PFE-ZTS swap may be oversubscribed, in which case you will get only a pro rata allocation of ZTS as a result of the swap; and

2. If the spread between the two stocks shrinks to less than 7% during the June 17-19 averaging period (the spread is currently 15%), then ZTS shares acquired in the swap will have a narrower discount than 7% (possibly no discount at all) due to the approximately 1:1 upper bound on the exchange ratio.