IMS Health Care (RX) being bought by TPG

IMS shareholders will receive $22.00 cash for each share of IMS common stock they own. Stock is currently trading at $20.56. This deal is expected to close Around Feb 8 after the shareholder vote. That translates into a 7% in 1.5 months. There is a whole bunch of stuff (or fear) surrounding this deal; hence the large spread. A certain deal would be trading at 1% or so. The fears are 1) even though there is no formal financing condition; TPG is still a private equity firm. Private equity firms are notorious for weaseling out of deals if financing becomes difficult. 2) The MAC (material adverse clause) would be a way for TPG to weasel out considering that recent legislation is suggesting that data mining of health data would be illegal which happens to be IMS's largest profit center.

I don't think the fear is warranted. I don't think legislation will pass. I don't think MAC will hold if it does. I don't think this will happen in the near term. I think this is a good trade.

What am I missing? It doesn't really matter. If I'm wrong - which I have been - the stock drops to 10-15 dollars. Even though I give that a small probability, nevertheless the probability still exists.

Ways to trade:

Option 1:

Buy FEB 10 20 options for 1.5. You make 33% on you money if deal closes shortly after Feb 8 shareholder vote. Otherwise you lose at most $1.5 or part of that if deal is delayed.

Option 2:

Buy May 10 20 options for 1.7. You make 20% on you money if deal closes. If deal closes it will happen prior to May. Otherwise you lose at most $1.7 or part of that if deal is delayed.

Option 3:

Calendar spread. Buy Feb 10 20 options for 1.5. Sell Jan 10 for 1.1. Deal will not close prior to Jan. Probably net 0 on Jan call. Make 0.5 on Feb call. If deal breaks it will probably happen sooner which limits loss to .40. If deal breaks after Jan expiration prior to Feb you lose the same 1.5.