Company A buys company B in cash deal, Company B stock rises but how come it does not go upto the offer price?

If Company A buys Company B for $10 a share, why is it that Company B's stock price rises but rises to ~$9.xx but not $10?? And if i found out company A is buying company B after the stock has gone up, wouldnt I just buy the stock at $9.xx and make the difference when Company A takes over Company B in a all cash deal? ie make $10-$9.xx=$$!!!?!? Is there some inherit risk that the investors know which prohibits the stock from going to $10? Thanks|||It is not a done deal until it is history. I recently had a cash tender offer and it depended upon what percentage of shares were tendered. Some people had large capital gains over a long period of time and did not want to take the complete tax hit at once. That deal did go through and I got my $51/share with no trade fee.





But if you look at others like Microsoft/Yahoo or Busch (which I have not really been following), there were ongoing negotiations where nothing was certain earlier. One offer fell through, the other eventually went forward. So there is always some risk whether an offer will proceed.|||The difference between the offer price and the market price is the risk factor of the deal going south.


A lot of deals fail because of some unforeseen government intervention such as anti trust. The risk factor is $10 - 9.xx.|||why would anyone buy it (and pay transaction fees) at $10? No one wnats to gamble their money and end up with ZERO profit.





Also, If someone bought it at $9.99 and the deal then went south, they'd be hosed.|||Depending on commissions, it may not be worth it to buy at 9.XX.