Merger Arbitrage Spread List February 10, 2019
This is the Merger Arbitrage Spread List February 10, 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.
This risk arbitrage tracking list provides the user with an investable database of deal spread opportunities. Rules for inclusion in this list can be found on the spread tracker eligibility rules page along with additional help and user guidelines. Unlike some data providers, dividends, which can have a dramatic effect on the value of a spread have been included in the return calculation.
- There were no closed deals from last weeks T20 list, but Dun & Bradstreet Corp (DNB) did close during the week
- There were NO failed deals from last weeks list.
- There were no stocks to dropping out of last weeks list. Therefore this week list remains the same
The Present
- There are no T20 replacements this week
- There were no new cash deals announced during the week that made our list
- The largest (simple) spread this week continues to be Pacific Biosciences of California (PACB), offering a return of 11.27%. This is despite the stock climbing $0.35 during the week which just makes up for last weeks drop. Redhat (RHT), which increased by an additional $0.99 during the week sees its spread narrow to 5.93%. NxStage Medical (NXTM) which remained unchanged for the week sees it’s spread still the third largest at 2.92%
- The average spread for the entire T20 list is a 1.49% return which is a significant decrease even as we were warning spreads were already tight. Our analysis here continues to echo the sentiments of previous weeks. It is difficult to justify the level of return for the level of risk/volatility currently available in the market arbitrage space at the portfolio level. Some individual deals which had previously offered attractive returns, especially those whose closure was forecasted to occur sooner rather than later have also narrowed considerably. Traders are advised to take some money of the table where possible. A broader market sell off can still occur as the problems in the global political space remain unresolved. The latent risk in the market caused by ongoing tensions between the US & China may flare up at any time as there is no guarantee the situation will be resolved in the near term. Even if the is a satisfactory resolution to this issue, merger arbitrage cash spreads do not have a great deal of room to run. More importantly, speculating on the outcome of these negotiations is not within the sphere of merger arbitrage and for this reason we continue to advise taking profits when possible and be ready to take advantage of any pullback should it occur
- Always be careful using leverage in these situations and maintain at least some dry power for future opportunities.
The Future
- Pacific Biosciences of California (PACB) reports earnings after the close on Monday, Luxoft Holding (LXFT) reports before market open on Wednesday and USG Corporation (USG) reports after the close on Thursday
- 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.
