Yes, technically by up to 6 months past the first anniversary. Pulled the legal context from the filing below
" by either Parent or the Company if the Closing has not occurred on or before the first anniversary of the date of this Agreement (the “Outside Date”); provided that if on such date, the condition to Closing set forth in Section 7.1(b) or Section 7.1(c) shall not have been satisfied but all other conditions to Closing shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), then the Outside Date shall be automatically extended for one three (3) month period and such date shall become the Outside Date for purposes of this Agreement; provided further that if on the date which is three months after the first anniversary of the date of this Agreement, the condition to Closing set forth in Section 7.1(b) or Section 7.1(c) shall not have been satisfied but all other conditions to Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), then the Outside Date shall be automatically further extended for one additional three (3) month period and such date as so extended shall become the Outside Date for purposes of this Agreement; provided further that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any Party whose failure to fulfill or perform any obligation or covenant under this Agreement has been a principal cause of the failure of the Transactions to be consummated by the Outside Date and such action or failure to act constitutes a material breach of this Agreement (it being agreed that any such failure of Merger Sub shall be deemed to be a failure of Parent);"
Great post. I'm looking into it and my thoughts are that this could be played via options buying puts of Tapestry, as the stock has recovered after the initial negative reaction once the deal once announced. The idea is that TPR would fall again if the deal is approved by the FTC. This approach would benefit from lower implied volatility in Tapestry than Capri, while providing a free hedge on a macro slowdown. In case of sticking to Capri, I would sell puts short term, using the proceeds to purchase calls expiring in August.
can the deal be extended?
Yes, technically by up to 6 months past the first anniversary. Pulled the legal context from the filing below
" by either Parent or the Company if the Closing has not occurred on or before the first anniversary of the date of this Agreement (the “Outside Date”); provided that if on such date, the condition to Closing set forth in Section 7.1(b) or Section 7.1(c) shall not have been satisfied but all other conditions to Closing shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), then the Outside Date shall be automatically extended for one three (3) month period and such date shall become the Outside Date for purposes of this Agreement; provided further that if on the date which is three months after the first anniversary of the date of this Agreement, the condition to Closing set forth in Section 7.1(b) or Section 7.1(c) shall not have been satisfied but all other conditions to Closing have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), then the Outside Date shall be automatically further extended for one additional three (3) month period and such date as so extended shall become the Outside Date for purposes of this Agreement; provided further that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any Party whose failure to fulfill or perform any obligation or covenant under this Agreement has been a principal cause of the failure of the Transactions to be consummated by the Outside Date and such action or failure to act constitutes a material breach of this Agreement (it being agreed that any such failure of Merger Sub shall be deemed to be a failure of Parent);"
Great post. I'm looking into it and my thoughts are that this could be played via options buying puts of Tapestry, as the stock has recovered after the initial negative reaction once the deal once announced. The idea is that TPR would fall again if the deal is approved by the FTC. This approach would benefit from lower implied volatility in Tapestry than Capri, while providing a free hedge on a macro slowdown. In case of sticking to Capri, I would sell puts short term, using the proceeds to purchase calls expiring in August.
Thank you! Yea I typically don't do options on both legs when it comes to arb but if the trade works for you then by all means.