Merger Arbitrage Spread List January 13, 2019
This is the Merger Arbitrage Spread List January 13, 2019. A FREE list of the largest cash merger arbitrage opportunities trading on major US exchanges. The FREE spreadsheet below contains the latest essential deal information and criteria as per official company announcements. This merger arbitrage spread list provides the user with an investable database of deal spread opportunities. This information can provide a solid foundation for making merger arbitrage investing part of your investment portfolio. We encourage traders and investors to perform their own due diligence before making investments. However, merger arbitrage (also known as risk arbitrage) is relatively simple to understand and execute. The most recent spread listings can be found here.
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The Past
- There were no closed deals from last weeks T20 list
- There were no failed deals from last weeks list (despite the ongoing regulatory issues surrounding (AVA)
- The two stocks to drop out of last weeks list are Travelport (TVPT) and Navigators Group (NAVG)
The Present
- The T20 replacements this week are Luxoft Holding (LXFT) and Loxo Oncology (LOXO)
- Both of these replacements, Luxoft Holding (LXFT) and Loxo Oncology (LOXO), are new cash deals announced during the week
- The largest spread this week again is AVA. Following the failure to obtain the necessary regulatory approval from the Idaho state regulator the stock continued to fall away this week. Parties to this deal have publicly stated they continue to consider this most recent setback and for this reason the deal remains active. The decline in price during the week exposes the stock to greater market fluctuations. However, with the spread now at 28.36% the stock, the market has priced a zero chance of this deal being salvaged. We await a statement from AVA as they continue to consider their options. There is also the termination fee of $103m to be taken into account. That aside, the largest (simple) spread is PACB, offering a return of 10.80%. This continues to displace RHT into third place whose rise during the week, especially on Friday, saw its spread decrease to 7.92%. The annualised return however remains at a similar level, 8.22%, due to the extended time frame of expected completion. New entrants Luxoft Holding (LXFT) offers an attractive spread of 3.07% (expected closing 6/30) and Loxo Oncology (LOXO) offers a spread of 1.07% although this tender offer is expected to close in the first quarter thus producing an attractive annualised return.
- The average spread for the entire T20 list (excluding AVA) is a 2.50% return which is below the recent historical average and significantly down from last week. This is a reflection of the strong performance of the broader market during the week. This level of return is NOT particularly attractive for the level of risk/volatility currently in the market. Traders are advised to take some money of the table where possible and wait for the volatility in the market to provide more profitable opportunities. A broader market sell off affects ALL stocks regardless of their M&A status. Always be careful using leverage in these situations and maintain at least some dry power should “the big one” hit home.
The Future
- There are no earnings announcements expected during the forthcoming week from the members of this weeks list
- There are no dividend payments expected during the coming week
- Any deal announcements relating to this weeks T20 list will be announced in real time, most often via out twitter feed @MergeArbLimited.
