Will this deal go wrong, or will BTG shares rise even further?

• The chart shows the BTG share price movements since 2015.
• 20 Nov: Boston Scientific agreed to take over specialty health-care company BTG for £3.3bn.
• The takeover offer implies a share price of 840p/share (37% premium to Monday’s closing price)
• Shares now 822p (at time of writing)
• Trading close to 834p record highs (seen in January 2015)
• Will the deal be abandoned, will the deal fall through or will another even higher offer emerge to acquire the company?
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading BTG – An Example

Let’s say you think that BTG is likely to rise further as a result of a takeover offer beyond 834p all-time record highs and beyond the 840p implied takeover offer price. You decide to buy exposure to £10,000 worth of BTG using a CFD, at the current price of 822p. To do this, you need £2,000.

For the purpose of this example, let’s assume the BTG  share price rises by 10%. Your profit would be £1000, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Sentiment towards the deal sours and BTG shares fall 5% and hit your stop-loss. Your loss would be £500.

This is provided for information purposes only. It should not be taken as a recommendation.