Directv

AQR Capital sold a position in GEO Group Inc. in 2Q14. The company accounted for a 0.0206% position in the fund’s first quarter U.S. long portfolio.

Once the SEC approves the proxy, a vote is scheduled. Usually, the last condition for a deal is the vote of the target shareholders.

Adjusted revenue from IP-based strategic services grew by 14.3% YoY in 4Q14. Adjusted consumer wireline revenue increased by 2.4% during the quarter.

AQR Capital increased its position in Apple from 0.86% in the previous quarter to 1.24% in the fund’s second quarter U.S. long portfolio.

Arbs generally avoid utility deals—and for good reason. Typically, the companies have an aggressive expected timeline and these deals don’t close on time.

DIRECTV is a provider of digital television entertainment in the United States and Latin America.

Media networks face stiff competition for acquisition and distribution of content. Quality and exclusivity add to competition across the media value chain.

AT&T will be paying DirecTV $67 billion, which becomes an expensive acquisition when we consider that DirecTV lacks any wireless spectrum.

According to AT&T, the DIRECTV merger is expected to help in bringing down costs associated with operations and general administration, supply chain, and content acquisition.

Verizon’s (VZ) Marni Walden talked about how the company currently views quad-play offerings.

During the UBS Global Media and Communications Conference, AT&T’s chief executive officer talked about the cost synergies from the DIRECTV acquisition.

The acquisition of Cablevision (CVC) by Altice will create the fourth-largest cable operator in the United States. The US cable industry is already feeling increasing competitive pressure from over-the-top players such as Netflix (NFLX).

By 2018, AT&T expects multiple cost synergies from the DIRECTV merger in its supply chain, operations and general administration, and content acquisition.

In 2Q15, Dish Network (DISH) ended with 13.93 million pay-TV subscribers—compared to 14.05 million subscribers at the end of 2Q14.

The DIRECTV (DTV) merger adds some rich sports content to AT&T’s (T) offerings, including NFL Sunday Ticket and several regional sports networks.

The AT&T–DIRECTV merger agreement was signed in May 2014. At the time, the companies believed the transaction could produce ~$1.6 billion in annual cost synergies.

With the resulting larger subscriber base, the DIRECTV deal gives AT&T stronger bargaining power to negotiate content costs with media networks.

Cable companies dominate the US pay-TV market. With the DIRECTV transaction, AT&T is now the biggest US pay-TV provider.

The AT&T–DIRECTV merger agreement was originally signed in May 2014. AT&T (T) has finally acquired DIRECTV (DTV) for ~$67.1 billion, including net debt.

Cable Communications revenue increased by ~6.3% year-over-year to ~$11.4 billion in 1Q15. Revenue from the Business Services subsegment increased by ~21.4% year-over-year to ~$1.1 billion.

Typically, approaches end up with a deal. Why? The target board of directors has a fiduciary duty to shareholders to get the best price for the company.

What are the components of a risk arbitrage spread? There are a number of factors that figure into a trade. Let’s look at a typical cash deal first.

Not all deals are cash deals, however. Often companies will issue stock in lieu of giving cash for a deal. This adds a layer of complication to the process and also some risk factors we need to consider.

The merger is expected to bring typical synergies to the combined entity. But AT&T now expects more benefits from the DIRECTV transaction than it anticipated.

OZ Management initiated a new stake in DIRECTV (DTV) by purchasing 3,823,963 shares of the company, representing 0.89% of the fund’s 4Q14 portfolio.

AT&T expects that synergies from the DIRECTV merger, as well as its OTT (over-the-top) content offering, will help it in providing video on any device.

One of the major drivers for the Hospira–Pfizer transaction is the expected growth of the sterile injectables and biosimilar markets.

AQR Capital sold a position in Tableau Software Inc. in 2Q14. The company accounted for a 0.0346% position in the fund’s first quarter U.S. long portfolio.

AQR Capital initiated a new position in Equinix in 2Q14. The company accounts for a 0.221% position in the fund’s second quarter U.S. long portfolio.

Although the pace of growth for Verizon has slowed down a little in the subscription TV market, it still continues to gain subscribers in an otherwise declining pay-TV market.

On February 12, 2014, Time Warner Cable (TWC) and Comcast (CMCSA) agreed to merge. The two companies provide cable TV and broadband access separate geographic areas.

In the risk arbitrage world, a 2% spread means a deal without much “hair” on it. The market is assigning a high probability of closing.

In merger arbitrage, you’ll generally buy the acquired company’s stock and sell short the acquiring company’s stock. So how will this play out when you look at the Integrys-Wisconsin deal?

To perform merger arbitrage, the investor will generally buy the stock of the company being acquired and sell short the stock of the acquiring company.

The Covidien-Medtronic deal is a scheme of arrangement, which is an English-style merger where a court has to approve the transaction once the votes are in.

On June 15, 2014, Medtronic (MDT) and Covidien (COV) reached an agreement to merge via a scheme of arrangement. The two companies more or less offer complementary goods.

If there’s a vote for the deal, the next step will be the release of the preliminary proxy statement. The proxy statement contains all the data in the merger agreement as well as some other important pieces of data.

Merger arbitrage, otherwise known as “risk arbitrage,” is an investment strategy that primarily focuses on mergers and capturing the spreads on announced deals.

We should analyze whether AT&T’s acquisition of DirecTV was a good choice or not—especially when the Pay TV market is undergoing a structural decline.