Merger Arb Spreads

[stock777]

"The proposed merger was subject to one of the longest-ever running reviews at the FCC, becoming entangled with the struggle between Democrats and Republicans over the Hispanic vote. Univision Chairman and Chief Executive Jerrold Perenchio has been a major supporter of Republican candidates, while Spanish Broadcasting's Chief Executive Raul Alarcon tips slightly toward the Democrats."

Seems this arb was quite a bit like an option that either was worth $2 or some large negative amount. This was no lock.

 

[Sioux]

Quote from TheStudent:

I am interested in studying how merger spreads have behaved in deals past - both successful and failed.

It doesn't seem to be easy to get data though - as a result of delisting of acquirees.

Does anyone know of a source?

PS : I am NOT interested in traditional merger arb.

Ivan Boesky wrote a book in the 1980's titled "Merger Mania",
2 years before he went to the pokey.

 

[TheStudent]

Sioux and Joe Trader - thanks for your pointers.

I personally think there is a way to rethink the merger arb game - hence the interest in obtaining data. I'm yanking it out from a Bloomie one deal at a time, so not very efficient at all.

btw, just to give back - everyone interested in merger arb should read the Mitchell Pulvino paper (2001). The work there is quite definitive on traditional merger arbs.