On February 22, a person in charge of the securities department of Laiwu Iron & Steel Co., Ltd. (600102.SH) told the reporter that Laiwu Iron & Steel was currently communicating with Shanghai Stock Exchange regarding the share exchange, and it was expected to finish the share exchange by the end of February at the latest. This means that shareholders of Laiwu Iron & Steel who choose to exchange shares will be able to convert their shares into Jinan Iron & Steel (600022.SH) shares at the end of February or early March for trading.
According to the reorganization plan, after exchanging Laiwu shares for Jinan shares, the cost would only be 2.95 yuan per share (cash price 7.12 yuan, exchange ratio 1:2.41), while Jinan's closing price on February 21 was 3.55 yuan. Calculating based on this price, shareholders of Laiwu Iron & Steel would have over a 20% premium after the exchange, meaning they already have a floating profit of more than 20%.
"The exact arbitrage space still depends on Jinan Iron & Steel's stock price after the share exchange," said Yu Baoshan, a steel researcher at Hua宝Securities, "Currently, the share exchange has not been completed, so arbitrage funds cannot sell yet. Jinan Iron & Steel has seen a slight increase in its stable trend, but shareholders should be cautious about the potential selling pressure from Laiwu's arbitrage funds after the share exchange, which could impact Jinan's stock."
On February 15, Jinan Iron & Steel announced the results of the cash option application and resumed trading. In the following days, the stock price increased slightly. By February 21, Jinan Iron & Steel's stock closed at 3.55 yuan, up by 0.57%.
According to Jinan Iron & Steel's announcement, the implementation of the cash option has ended, and the company is now proceeding with the share exchange merger. Laiwu Iron & Steel will not resume trading, and after the exchange is completed, Laiwu Iron & Steel will be deregistered.