How would a savvy investor make use of this exchange?

My interpretation of the exchange...
HAL has offered a 7.5% discount on KBR shares if you exchange your HAL (per $1.00) shares for KBR (per $1.08). The deal was leaked March 2nd, announced March 4th and arrived in the mail today. The $ calculation takes place at 4:30 PM on March 29th and will be based on the average market prices of the two stocks between market open on March 27th and Market close on March 29th. (I have 13,100 shares of HAL.)

This looks to me to be a zero balance game and I'm reluctant to participate. Sidebar: Because the announcement was more than three weeks in advance, the two stock prices are inextricably linked together (1 : 1.08) between now and then. HAL wants to get rid of it's 81% ownership of KBR because of it's profit drag (and Iraq reputation?).

So what's an owner to do? Should I sign-up?, buy one or the other? pass? GTH outta HAL? Explain.

Don't answer the question if you're going to send me to some other wizard for an answer.

The only way to make money on this deal would have been to speculate beforehand. Once the merger is announced, the stocks will trade at the published ratio. When one moves, the other will move automatically with it.

Do you have a broker that you can ask this question to.
There can be aspects to this trade that are not readily apparent.
If I were you, I would like to talk to someone who understands the trade and the ramifications of making a particular choice.