Subscribe By RSS
Mergers And Acquisitions Arbitrage Activity
By Jae Jun on April 8, 2009 | More Posts By Jae Jun | Author's Website
The merger arbitrage activity has been slow of late and it is no surprise. I mentioned in January that I expected mergers and acquisitions to slow down as financing became difficult to acquire.
In particular, merger arbitrage opportunities have been scarce ever since the failed EMAG deal with Stanford (my theory anyways) and the spread for other mergers have not been wide enough to offer any real decent returns.
I invest in mergers when it is close to finalized in order to reduce as much risk as possible. Step 5 is usually a good time to invest in a merger if the spread is still decent on an absolute basis after considering fees.
I do not invest after a merger announcement as there are too many variables to consider.
- Due diligence by both parties
- Financing and regulator approval
- Get preliminary shareholder sentiment (or controlling shareholder approval)
- Obtain regulator (SEC, FCC, any and all) approval
- Get final shareholder approval at a meeting called for that purpose
- Insiders continually vesting or buying shares
Pending Merger Acquisition Arbitrage List
Looking at this list, there isn’t much to take advantage of. Disk has far too much risk involved and the company fundamentals are terrible for it to be a standalone company.
Fat Pitch Financials recently tweeted about an initiation of En Pointe Technologies (ENPT) which does seem to be the best merger at the moment.
| Symbol | Announced Date | Closing Value | Last Price | Closing Date | Profit | Annualized Profit |
| DISK | 11/20/2008 | $2.75 | $1.58 | 4/6/2009 | 74.05% | 0.00% |
| ACBA | 9/10/2008 | $5.14 | $6.04 | 4/30/2009 | -14.97% | -237.58% |
| FRBK | 11/10/2008 | $7.12 | $7.60 | 4/30/2009 | -6.26% | -99.31% |
| NTMD | 1/27/2009 | $0.80 | $0.75 | 4/30/2009 | 6.67% | 105.80% |
| BFBC | 11/10/2008 | $9.21 | $9.68 | 4/30/2009 | -4.86% | -77.07% |
| CVTX | 3/12/2009 | $20.00 | $19.94 | 4/30/2009 | 0.30% | 4.78% |
| EQ | 10/27/2008 | $37.94 | $37.38 | 6/30/2009 | 1.49% | 6.46% |
| CYCL | 11/7/2008 | $8.50 | $8.32 | 6/30/2009 | 2.16% | 9.40% |
| ZICA | 2/26/2009 | $0.81 | $0.77 | 6/30/2009 | 4.68% | 20.32% |
| ABNJ | 12/15/2008 | $7.83 | $9.50 | 6/30/2009 | -17.57% | -76.35% |
| PBKS | 12/19/2008 | $8.07 | $7.52 | 6/30/2009 | 7.29% | 31.67% |
| AANB | 1/2/2009 | $2.38 | $2.25 | 6/30/2009 | 5.87% | 25.53% |
| SWIM | 1/8/2009 | $8.89 | $8.75 | 6/30/2009 | 1.58% | 6.86% |
| AVNX | 1/27/2009 | $28.97 | $2.14 | 6/30/2009 | 1253.96% | 5448.77% |
| NCX | 2/23/2009 | $6.00 | $5.83 | 6/30/2009 | 2.92% | 12.67% |
| GVHR | 3/5/2009 | $4.00 | $4.01 | 6/30/2009 | -0.25% | -1.08% |
| ENPT | 3/11/2009 | $2.50 | $2.05 | 6/30/2009 | 21.95% | 95.38% |
| LIMC | 4/3/2009 | $2.48 | $2.25 | 8/15/2009 | 10.44% | 29.32% |
| MXGL | 3/2/2009 | $16.77 | $16.48 | 9/30/2009 | 1.78% | 3.69% |
| MV | 4/1/2009 | $25.72 | $25.04 | 9/30/2009 | 2.71% | 5.61% |
| WYE | 1/26/2009 | $46.35 | $42.48 | 10/31/2009 | 9.10% | 16.05% |
| TKTM | 2/10/2009 | $3.88 | $3.81 | 11/15/2009 | 1.71% | 2.81% |
| SGP | 3/9/2009 | $25.63 | $23.20 | 12/31/2009 | 10.49% | 14.28% |
| FCVA | 4/3/2009 | $9.25 | $8.00 | 12/31/2009 | 15.62% | 21.27% |
Disclosure: No positions held at time of writing
Subscribe by RSS 
Subscribe by Email
Email This Post To A Friend
The Message Of The 2-Year US Treasury Note, Deflation And Japan 
3 Steps To Becoming A More Successful Trader 
The Transportation Sector: Here Are Three Investments In A Sector That Are Ready To Soar - What You Should Know About Precious Metals ETFs And Taxes
- Buffett Borrows For Rail Acquisition
- Bay Street Stocks Slip Slightly Again - Canadian Commentary - 10 hrs ago
- Stocks Close Mostly Lower Amid Disappointing Quarterly Results - U.S. Commentary - 11 hrs ago
- Bay Street Stocks Linger Slightly Below Unchanged Level - Canadian Commentary - 12 hrs ago
- Stocks Remain Stuck In The Red In Mid-Afternoon Trading - U.S Commentary - 13 hrs ago
- European Markets Fall, Led By Banks, Oils - European Commentary - 14 hrs ago
