I bought 100 shares of Rohm & Haas Company(ROH) at $53.45 as an arbitrage play. Dow Chemical agreed to purchase Rohm & Haas for $78 per share earlier this year. The Kuwaiti government pulled out of a 17.4 billion dollar deal with Dow Chemical which could hurt financing for the Dow Chemical-Rohm & Haas deal. ROH stock is down over 17% today amid risk that the deal may not be completed. I think the deal will still get done just not at the $78 price offered. Dow Chemical already has the bank financing in place along with a 3 billion dollar investment from Warren Buffett’s Berkshire Hathaway. Dow needs this deal and would be subject to liability lawsuits if they back out. I think the deal gets done but at a lower price.
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When ROH was trading around $70 I was bullish on the deal. If it gets completed @ $78 as originally planned I would be pretty surprised.
I dont see this at $55, let alone 70-75 anytime soon.
Even if this deal is done for less, its still going to be a loss based on the gap between the previous deal and any potential one. ROH looks like it still has a little more to fall at this point.
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I am hoping for an offer in the 60′s. I only bought 100 shares of ROH because I am not fully confident in the offer.