# Capital Power Income (CPA.UN) TSX



## zylon (Oct 27, 2010)

If I understand this news release correctly, *Atlantic Power (ATP*) will purchase *CPA.UN* in Q4 this year.



> •CPILP unitholders can elect to receive *Cdn$19.40* in cash or 1.30 shares of ATP for each CPILP unit, subject to allocation limits; share election will qualify CPILP unitholders to obtain a tax free rollover to the extent permitted


Although the deal is subject to approval, if it does go thru, $19.40 is assured. Share price did hover around 19.40 for about 3 weeks but has drifted lower - today closed at 19.02

In the meantime, CPA.UN monthly dividend yields over 9% annualised. A portion of dividends may be _Return of Capital_.

This looks very good to me ... _almost_ guaranteed to get 19.40 later this year and collect dividend while u wait. Why would people be selling for less? Am I missing something?

chart


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## Potato (Apr 3, 2009)

I can't figure it out. I already owned CPA.UN so I'm happy to keep owning it if the arbitrage falls through.

Bought some more today at $18.95.

One caveat to watch for is that only so many unit holders can opt for cash:

"All cash elections will be subject to proration if total cash elections exceed Cdn$506.5 million and all share elections will be subject to proration if total share elections exceed approximately 31.4 million Atlantic Power common shares. "

I don't see what exactly the proration will be (less cash? forced to take ATP shares?), but it looks like they need about half the unit holders to opt for each option.


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