M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Thursday, February 11, 2010

Airgas Insider Buying?

I suppose it wouldn't be a modern tender offer, I guess, unless it ended with an SEC investigation.   According to Reuters:
     But before the takeover bid was announced, a burst of activity in a few select Airgas call options occurred, fueling suspicion that the news was leaked ahead of time and was used to profit on a potential spike in Airgas' stock.

     "This does not surprise me that regulators would want to find out who was behind the heavier-than-normal call option volume on the last trading day prior to the announcement," said Henry Schwartz, president of Trade Alert. 
     "In fact, Airgas call volume started to lift on Jan. 29 and continued to be above normal all that week, suggesting that the leak, if there was one, happened about a week in advance of the proposed deal," Schwartz said.

The SEC is now investigating these trades. Of course they are.   I'm continually surprised that there remain people who think that buying options ahead of a major corporate announcement like an acquisition will go unnoticed.  Believe me, it's not all that hard to figure out.  It's called a database.  It's the same way that Walmart knows that men tend to buy beer and diapers when their wives send them shopping.   


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