Merger Arbitrage Mondays – February 20, 2017

Merger activity increased last week with five new deals announced and four deals closing. You can find all the active deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

With large gains last week, all three major indexes are near or at all time highs while volatility measured by the VIX is at historical lows. In this environment, it is not surprising to see value-oriented investors turn to strategies like merger arbitrage. The latest 13F filing for Berkshire Hathaway  revealed a new position of more than 8 million shares in Monsanto (MON), which is in the process of being acquired by Bayer AG. The deal sports a spread of 17.43% and potential annualized returns of 20.20% if the deal closes by the end of this year. The large spread indicates that the market thinks the risk of the deal falling apart or getting delayed on account of regulatory issues is high but Buffett appears to think otherwise.

Deal Statistics:

New Deals:

1. The acquisition of ZELTIQ Aesthetics (ZLTQ) by Allergan (AGN) for $2.475 billion or $56.50 per share in cash.
2. The acquisition of GigPeak (GIG) by Integrated Device Technology (IDTI) for $250 million or $3.08 per share in cash.
3. The acquisition of Fortress Investment Group (FIG) by SoftBank Group for $3.3 billion or $8.08 per share in cash. (link to original SEC)

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