On November 29, 2019, SORL Auto Parts, Inc. (Nasdaq: SORL), a Chinese automotive supplier, entered into an agreement to be taken private by a consortium consisting of the firm's three largest shareholders. The parties agreed to pay $4.72 in cash in exchange for the remaining 41.2 percent of shares not currently owned by the consortium. Based on SORL's current price, the arbitrage spread sits at approximately 16.5 percent, or 65.4 percent annualized. The risk that this deal fails have been overstated by the market and therefore this is an excellent arbitrage opportunity.
Background
SORL