Exchange offer in ATMU increases shares on loan.

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Cummins Inc (CMI) recently launched an exchange offer for the separation of Atmus Filtration Technologies Inc (ATMU).

On February 14th 2024, Cummins Inc (CMI) announced it would commence an exchange offer to split off its remaining interest in Atmus Filtration Technologies Inc (ATMU). In May 2023, 19.5% of Atmus shares were sold via an initial public offering, with Cummins Inc retaining 80.5% of Atmus' common stock.

According to the Cummins investor website[1], "the exchange offer is expected to permit Cummins shareholders to exchange all or a portion of their shares of Cummins common stock for shares of Atmus common stock at a 7% discount".

Since this announcement, borrowing activity has increased significantly in ATMU stock, reaching 23% of outstanding shares. The discount permitted by the exchange offer produces an arbitrage opportunity for investors.

investors ability to participate in this opportunity.

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[1] Cummins Launches Exchange Offer for Separation of Atmus Filtration Technologies Inc. :: Cummins Inc. (CMI)

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