BUZZ-Shell and BG: playing the spread

** Multiple options still available to play proposed takeover of BG by Shell (LSE: RDSB.L - news)

** BG shares yet to close the gap to the implied price as per deal terms

** Shell's offer of 0.4454 shares for every 1 BG share plus 383p cash valued BG shares at 1350p, a premium of 52 pct to the 90 day VWAP as at Apr. 7

** Closes BG shares have come is the Apr 8 intra-day high of 1301p. Currently trading c.9.5 pct below implied deal price. Chart: http://link.reuters.com/paq54w

** Flow since deal announcement dominated by institutional rather than merger-arb funds, according to an event-driven specialist at a leading IB

** Size of the deal cited as preventing merger-arbs from closing gap

** Time (Xetra: 17T.DE - news) frame also a possible reason for spread (expected to close early-2016), UBS (NYSEArca: FBGX - news) cites profit taking from shareholders on Apr. 8 but does not expect competition issues to prevent deal occurring

** Trader suggests long BG (unhedged or as a pair trade against Stoxx 600 Oil and Gas index if an oil bear) as a cheap way into Shell dividend yield (at 6.1 pct among highest in Europe) (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)