Interesting case written up on BofC. Its a going private transaction that will result in all ADR holders getting 11.55 per ADR. The current ADR price is 9.3. And the merger itself is expected to happen within Q1 of 2017. The merger has also received approval from shareholders. So now the real question is whether the terms of the merger will be altered or whether they will be able to raise the capital.

The market is assigning a implied probability of the merger going through of about (9.3-8.25)/(11.55-8.25)=32%. The formula I used is p=(S-L)/(U-D) where p is the probability of the merger, S is the current stock price, L is the stock price just prior to the merger announcement (I am assuming the stock returns to this value if the merger does not go through) and U is the merger stock price.

The IRR of the deal if it goes through is 1.25^4 – 1 = 144%.