M&A update: Trane put volume spikes on IR deal concern; spread stays tight

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Posted Mar 27th 2008 10:00AM by Paul Foster
Filed under: Options, Management, Investments

Trane (NYSE: TT) is recently trading down to $45 range. Ingersoll-Rand (NYSE: IR) announced the purchase of Trane for $36.50 per share in cash and 0.23 shares of IR per share of TT on Dec. 17, 2007. The deal is expected to close in the second quarter.

The premium spread stays tight at approximately 2%. TT call option volume of 94 contracts compares to put volume of 2,225 contracts. TT April and May option implied volatility of 37 is above its 26-week average of 17 according to Track Data, suggesting large price movement.

M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Tags: Ingersoll-Rand, option implied volatility, OptionImpliedVolatility, Trane

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