Why don't people buy into Kraft to get the $16.50 dividend, then sell off their shares?
Today it was announced that Heinz is going to be buying Kraft. All Kraft shareholders will receive a $16.50/share cash dividend and 1 share of Heinz for each share of Kraft that they own.
My question is, why don't people just buy Kraft, collect the dividend, then sell? Are they basically saying that Heinz is about $16.50/share cheaper than Kraft? So to use a completely hypothetical scenario: if Heinz is $50/share and Kraft is $66.50/share, their Kraft shares will be exchanged for the $50/share Heinz shares, then they get a $16.50 cash dividend to make up for the difference. Is that why people don't just buy Kraft and collect the dividend??
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