China Mobile (CHL US, 941 HK) is set to acquire a 20% stake in Shanghai Pudong Development Bank (600000 CH), in a deal that has riled China Mobile shareholders. Pudong shares were suspended once the deal was made public, but interestingly they spiked 5.5% ahead of the deal’s evening announcement on February 25th:
Either buyers that day were extremely skilled in mosaic theory or they knew something was in the cards. That’s a pretty blatant jump.
Yet even these traders didn’t even get the best deal in town. That’s because China Mobile ended up getting its Pudong shares for 17.82 yuan each, 14% below the price at which Pudong shares were halted. Unfortunately, CHL can’t just flip its shares as fast as the traders above.