27 Aug HUDSON CITY BANCORP INC / M&T BANK

In this takeover, HCBK shareholders were given the option to receive either cash or MTB shares, with the total consideration being fixed at 40% cash and 60% stock. There was no ‘default option’ offering shareholders a guarantee of 40% cash : 60% stock as per the index rebalance treatment. Any fund trying to mirror the index therefore had unavoidable tracking risk. SCORPEO Analytics™ were engaged by an index tracking firm to analyse and predict the best methodology to minimize this tracking error. Our analysis showed a 60% reduction in tracking error.

For full access to this and future reports please contact  Ian Davey on +44 (0)203 598 2010 or email Ian.Davey@scorpeo.com