For instance, on March 11, 2014, Jos A Bank (JOSB) agreed to be acquired by Men's Wearhouse for $65/share in cash. A tender offer to existing shareholders was set to expire on March 19th. On March 20th, Men's Wearhouse extended the tender offer for $65/share to April 9th. On April 10th, it again extended the tender offer to April 23rd.
I purchased shares of JOSB on April 1 at $64.31. The day after I told my broker I wanted to tender all my shares. The shares remained in my account until April 9th, after which the shares are no longer in my account, as the broker says they have been tendered and they are waiting to receive cash from the depository to transfer to my account. I don't know when I will actually receive the cash, but assuming it's just another week or so, I made 1.07% return in a pretty short time period. Didn't I?
My question is, given the deal is for all cash and the next tender expiration is near (April 23rd is 6 days from now), why not buy more shares at the current price of $64.44, tender them, and receive $65 in cash in a couple weeks? My brokerage only charges me 0.5 cent/share so transaction costs are not an issue. ($65 - $64.445)/$64.445 equals a 0.86% profit in just a couple weeks for a what seems to me a riskless trade.
If this is the case, why isn't JOSB trading closer to $65/share as this riskless profit should be arbitraged away?