435% Arb Opportunity
The biggest arbitrage on the Canadian Exchange of 2018 is happening right now. . .
And like any massive arbitrage opportunity – its because people don’t know about it.
Back in November, when BetterU Education Corp. (CVE:BTRU, FRA:5OGA) announced they had secured a US$100 million financing at US$3.00 per share from Treasure Union Ltd. (TU), the market had good reason to be skeptical.
The deal looked too good to be true – BetterU’s stock was trading at only C$0.44, and the investment was offered at a 760% premium.
Treasure Union was also a relatively unknown entity – “who was this mysterious investor?”
Lastly, it didn’t help that just one-month prior West High Yield (WHY) Resources announced the fabricated sale of their magnesium deposit for US$750 million, or a whopping 4,625% premium to their market cap at the time.
Obviously, the deal fell apart – and the market became weary of ‘too-good-to-be-true’ deals.
Today, BetterU announced the execution of a definitive agreement with TU. . .
The agreement solidifies the terms and conditions required to complete the final details for the US$100M equity investment in BetterU.
The definitive agreement includes the final steps that are required to complete prior to closing.
º TU to Establish Cayman Island Fund to support the investment into BetterU. TU has confirmed that the name of the Fund will be ‘Cayman Island DGS Holdings’ and that the bankers of DGS Holdings will be HSBC. The Fund will be completed by the end of February, early March 2018.
º TU indicated that the Fund will establish several additional subsidiary companies to support their investment targeted companies, including BetterU. A new corporation, TUCapital, will be incorporated by the Fund and will hold the shares of BetterU.
Speaking with Management, investors of the fund are ultra-high-net-worth Chinese investors – some of whom made their fortunes in technology.
Their mandate is to invest in “high-growth public and private companies from North America involved in humanitarian sectors including education, healthcare, and information technology.”
We are also very close to the Varshney family – a serially successful clan from Vancouver and large investors in BetterU.
We believe they wouldn’t stake their reputation on one deal.
The deal is expected to be completed by mid-March 2018.
Shares of BetterU currently trade at C$0.70 – obviously the markets are still not convinced. . .
But this gives our readers an incredible opportunity – even with a generous risk premium.
Palisade Global Investments Limited holds shares of betterU Education Corp. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.