IQ Merger Arbitrage ETF
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What’s the Mergers and Acquisition Trend Showing?
The M&A (mergers and acquisition) (MNA) (MRGR) trend showed a rally since 1Q09. This rally continued until 4Q15. In 4Q15, the M&A deal was $11,150 billion.
Basics of Office Depot
Office Depot is a global supplier of office products and services to businesses and consumers. The company has 64,000 employees.
Don’t trade the Office Depot spread like a typical arb spread
Once the proxy comes out, check the transaction background and see if they ran an auction. If not, a private equity buyer may step in after the deal breaks.
Handicapping the risk-reward balance of the Office Depot deal
Staples stock was up on the announcement, and the analyst community understands the pressure this segment is under. At any rate, no Staples vote is needed.
Parsing the Office Depot Material Adverse Change clause, part 1
Regarding the Office Depot and Staples deal, the MAC clause lays out the circumstances under which Staples can back out of its deal with Office Depot.
Understand the basics of the Staples–Office Depot merger
If another bidder tops the Staples bid, and Office Depot is unable to get shareholder approval, it will owe Staples a breakup fee of $185 million.
Parsing the Hospira material adverse change clause, Part II
A war that affects the economy as a whole is not a material adverse change, but a hurricane that takes out Hospira’s manufacturing facilities is.
Parsing the Hospira material adverse change clause, Part I
The material adverse change clause lays out the circumstances under which Pfizer can back out of its deal with Hospira.
Why some overlap could trigger an antitrust review
Typically, what the first step merger arbs will do to get a handle on the antitrust is to look at the 10-Ks of each company.
Parsing the material adverse change clause
The ETP–RGP deal and the MAC clause The MAC (material adverse change) clause is one of the first things that arbs look at. For the deal between Energy Transfer Partners (ETP) and Regency Energy Partners (RGP), the MAC clause lays out the circumstances under which ETP can back out of its deal with RGP. Let’s take […]
Background on Energy Transfer Partners
Energy Transfer Partners owns natural gas transportation pipelines that receive natural gas from other mainline pipelines and gathering systems.
RGP and ETP merger basics
This article covers what you should know about the RGP and ETP merger.
Regency Energy Partners–Energy Transfer Partners merger arbitrage
In merger arbitrage, the acquiring company generally buys the acquired company’s stocks and short sells them.
Why liquid alts may be preferred in a rising rate environment
Liquid alts provide a way to generate income while preserving capital in the face of an anticipated rise in interest rates.
Paulson’s bet turns sour as AbbVie reconsiders its Shire bid
News reports in August noted that Renaissance Technologies LLC, Jana Partners, David Einhorn’s Greenlight Capital, Dan Loeb’s Third Point LLC, and Paulson & Co. posted losses in July.
An investor’s guide to risk arbitrage as a strategy
Risk arbitrage as a strategy is basically the act of picking up nickels in front of a steamroller. When a deal successfully closes, you get a nickel. When a deal breaks, you lose a buck.
Merger arbitrage must-knows: The basics of antitrust analysis
Antitrust is usually the biggest risk for a deal to break. All mergers over a certain dollar threshold must pass muster from the antitrust authorities in the U.S. and if they do business overseas, the antitrust authorities there.
Merger must-knows: Why the proxy statement is important
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 must-knows: The typical timeline for a friendly deal
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.
Merger arbitrage must-knows: A typical stock merger spread
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.
Identifying and analyzing a typical cash merger arbitrage spread
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.
Merger arbitrage must-knows: A key guide for investors
Merger arbitrage, otherwise known as “risk arbitrage,” is an investment strategy that primarily focuses on mergers and capturing the spreads on announced deals.
