Mergers & Acquisitions

Merger arbitrage opportunities that arise from recent corporate merger and acquisition activity.

Merger Arbitrage: CoStar Group (CSGP) & LoopNet (LOOP)

by Glenn Busch September 27, 2011
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Back on April 27 of this year through a definitive agreement, CoStar Group (CSGP) and LoopNet (LOOP) announced their intention to merge. It is a cash + stock transaction with a deal spread that offers good absolute and annualized returns.

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Returns for F.N.B. Corp & Parkvale Financial Merger Arbitrage Trade

by Glenn Busch July 1, 2011
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Previously, I discussed how to calculate returns in a merger arbitrage trade and I want to follow it up with a real world example. Back on June 15 F.N.B. Corporation (FNB) and Parkvale Financial Corp (PVSA) agreed to merge in an all-stock transaction.

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Calculating Returns in a Merger Arbitrage Trade

by Glenn Busch June 27, 2011
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In the previous post of this series I discussed the sources of event risk associated with merger arbitrage. In this post I will focus on the returns associated with merger arbitrage, more specifically how to calculate returns, gross and annualized, for each of the three deal structures.

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The Risk in Merger Arbitrage

by Glenn Busch June 22, 2011
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The majority of mergers and acquisitions are completed without problems and even the few that do have problems usually still complete the merger. The following is a discussion on some of the reasons as to why deals do not close. If we can identify the warning signs then hopefully, as arbitrageurs, we can avoid the deals that can torpedo our portfolio.

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Three Types of Mergers

by Glenn Busch June 17, 2011
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The first in a series of posts discussing the structure, risks, and returns of merger arbitrage. This post focuses on the three main types of merger deals and how the arbitrageur will structure their trade.

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Why the Large Deal Spread for the Adam Inc (ADAM) & Ebix Inc’s (EBIX) Merger

by Glenn Busch September 22, 2010
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Earlier this month Ebix Inc. (EBIX) and Adam Inc. (ADAM) signed a merger agreement in which Adam Inc. will be acquired for $66 million. Each Adam Inc. shareholder will receive 0.3122 shares in Ebix Inc. Currently Ebix is trading for $20.87 per share and Adam Inc. is trading for $5.89 per share which produces a deal spread of 10.62%.

Why is the deal spread so large for a merger that will not face financing issues, is not a hostile takeover, will not face regulator issues, and will close by the end of this year?

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Merger Arbitrage: Allscripts (MDRX) & Eclipsys (ECLP)

by Glenn Busch July 22, 2010
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The set-up, risks, and returns for a merger arbitrage trade for the all-stock merger deal between Allscripts-Misys Healthcare Solutions Inc. (MDRX) and Eclipsys Corp. (ECLP).

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Merger Arbitrage: Aon Corp. (AON) & Hewitt Associates Inc. (HEW)

by Glenn Busch July 14, 2010
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The merger arbitrage trade set-up, the risks, and the returns for the merger deal between Aon Corp. (AON) and Hewitt Associates (HEW).

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Merger Arbitrage: Healthronics (HTRN)

by Glenn Busch June 4, 2010
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Endo Pharmaceuticals (ENDP) announced a cash tender offer for the outstanding shares of Healthronic (HTRN) at $4.85 per share. Is the merger spread large enough to compensate for the risk in this merger arbitrage trade?

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Merger Arbitrage: Central Jersey Bancorp (CJBK)

by Glenn Busch May 27, 2010
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On Tuesday May 25, 2010 Kearny Financial Corp. (KRNY) and Central Jersey Bancorp (CJBK) announced that they have entered into a definitive merger agreement. Kearny Financial Corp. (KRNY) will acquire Central Jersey Bancorp (CJBK) for $72.3 million or $7.50 per share in an all cash deal (click here for the Marketwire release). The deal is [...]

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