Merger Arbitrage Spread List February 24, 2019
This is the Merger Arbitrage Spread List February 24, 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.
Not quite sure you’re ready for merger arbitrage yet?
Why not read our “How to Profit from Merger Arbitrage” guide first.
This merger arbitrage spread list (also known as risk arbitrage) provides the user with an investable database of deal spread opportunities. Rules for inclusion in this free list of the largest cash merger arbitrage spreads can be found on the Spread Tracker Rules page along with additional help and user guidelines. Common rules include (but are not limited to) minimum price trading volume. Unlike some data providers dividends, which can have a dramatic effect on the value of a spread have been included in the return calculation.
The Past
- There was 1 closed deal from last weeks T20 list. NxStage Medical (NXTM)
- There were NO failed deals from last weeks list.
- Along with NxStage Medical (NXTM), InfraREIT, Inc. (HIFR) drops out of the list due to the spread now trading at a premium to the offer price.
The Present
- There are no T20 existing replacements this week
- Immune Design (IMDZ) was the only new cash deal 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 8.55%. This follows a increase of $0.24 during the week. Redhat (RHT), which increased by an impressive $1.85 during the week sees its spread narrow to 3.92%. Tribune Media Company (TRCO) which declined on Friday sees it’s spread move up to being the third largest at 1.19% if ONE dividend payment is included.
- The average spread for the positive portion of the T20 list is a 0.93% return. This return is lower than last week primarily due to the closure of NXTM. The T20 list now has only 16 constituents. To maintain consistency we have instigated (in line with the rules) four parts of cash in the vacant arbitrage spaces. Holding a cash position as part of the T20 portfolio also avoids the over reliance and weighting on the existing positions whose volatility may have had an outsized effect on the portfolio. The level of return continues to 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. Traders are advised to take some money of the table where possible.
- Speculating on the outcome of trade negotiations is not within the sphere of merger arbitrage. Even if the is a satisfactory resolution to this issue, merger arbitrage cash spreads now have even less room to run. 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
- Belmond (BEL) reports earnings on Wednesday
- Investment Technology Group (ITG) goes ex-div on Tuesday
- Any deal announcements relating to this weeks T20 list will be announced in real time, most often via out twitter feed @MergeArbLimited.
