Men’s Wearhouse(MW) has an all cash offer on the table to buy Jos. A Bank Clothiers(JOSB) $57.50 per share. The stock is trading over $56, implying the market likes the deal price.
There are some smart arb trades out there against this deal. One that I like, in particular, is the Feb 55/50 put spread at near $1.00 per contract. With the deal assumed to get done, that is a lot of premium to collect over 40+ days. If the deal gets sweetened, trades could be out earlier. We have to do it as a spread because if it falls apart JOSB will get slammed. An alternative to this trade is to make a bet that the deal price goes higher and buy the Jan/Feb 60 call spread for around $0.125.