Merger Arbitrage Mondays – ‘To Be Or Not To Be?’ – The Twitter Musk Trial

  • October 10, 2022

Merger activity remained steady last week with three new deals announced and nine deals completed.

The Final Stretch in the Twitter (TWTR) and Elon Musk Saga

Negotiations and litigation between Elon Musk and Twitter have been going on for months, starting before the deal was officially announced in April this year. On October 4, 2022, Elon Musk stated in a court filing that he was working to finance a deal to complete the acquisition of Twitter on the original agreed terms and asked to delay the trial that was scheduled to start on October 17, 2022. This news caused Twitter’s stock to jump over 20% on Oct 4. Twitter opposed the motion but the judge granted a stay of the trial and gave both the parties time until October 28 to complete the deal.

The biggest issue now is Mr. Musk’s ability to raise the debt needed for the deal. I think the deal is in the final stretch and added to my position last week.

I wrote the following last week, in an article on Seeking Alpha article, titled ‘The Twitter Fiasco And The Case For Increased Activism

The court case between Twitter (TWTR) and Elon Musk aired a lot of dirty laundry and a particular exchange of texts between Mr. Musk and Jack Dorsey made me realize that Jack Dorsey had no business being the CEO of Twitter, let alone two different public companies.

CEOs sitting around in their ivory towers of idealism need a reality check. I am certainly glad Elliott Management got involved in Twitter in early 2020, got a board seat and replaced Jack Dorsey with Parag Agarwal in 2021.

The specific text messages I am referring to are given below,

Jack Dorsey and Elon Musk Text Messages 1


Jack Dorsey and Elon Musk Text Messages 1


I have reviewed and followed over a thousand mergers during the last decade and I don’t think I have ever seen a saga as crazy as Elon Musk’s on again/off again acquisition of Twitter. The drama started even before a definitive merger agreement was inked where Mr. Musk wanted to purchase Twitter but Twitter was not interested in selling itself and adopted a poison pill provision.

Other deals facing regulatory hurdles include the acquisition of TEGNA (TGNA) by Standard General and the acquisition of Activision Blizzard (ATVI) by Microsoft Corporation (MSFT). Last week House Speaker Nancy Pelosi urged the FCC to scrutinize Tegna’s takeover, citing concerns that the transaction could lead to less local news and journalism job cuts. Microsoft’s acquisition of Activision Blizzard continues to face an in-depth probe in the UK, with EU antitrust regulators wanting to know whether Microsoft will block rivals after the deal.

The FCC has requested additional information from Tegna and Standard General and the company’s responses are due by October 13th. According to a M&A journalist I was communicating with last week,

The FCC has received and continues to receive a ood of lings in both support and opposition to the transaction.
A former FCC ofcial believes the transaction will be a good thing for the industry, local news, and diversity and

does “not see any harm in this deal.

The “ticking fee” with four escalating tiers that kicks in if the deal is delayed past next month will offset some of the impact from the deal getting delayed.  The four tiers are,

i) $0.05 per month if the closing occurs between the 9- and 12-month anniversary of signing

ii) increasing to $0.075 per month if the closing occurs between the 12- and 13-month anniversary of signing

iii) $0.10 per month if the closing occurs between the 13- and 14-month anniversary of signing and

iv) $0.125 per month if the closing occurs between the 14- and 15-month anniversary of signing.

I continue to remain long both Tegna and Activision Blizzard.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.

Merger Arbitrage

Deal Statistics:

Total Number of Deals Closed in 2022152
Total Number of Deals Not Completed in 20225
Total Number of Pending Deals
Cash Deals49
Stock Deals18
Stock & Cash Deals2
Special Conditions8
Total Number of Pending Deals77
Aggregate Deal Consideration$1.07 trillion

New Deals:

  1. The acquisition of LogicBio Therapeutics (LOGC) by Alexio, AstraZeneca Rare Disease. Under the terms of the agreement, Alexion, through a subsidiary, will initiate a cash tender offer to acquire all outstanding shares of LogicBio for $2.07 per share.
  2. The acquisition of Poshmark (POSH) by Naver Corp. for $1.2 billion or $17.90 per share in cash.
  3. The acquisition of First Eagle Alternative Capital BDC (FCRD) by Crescent Capital BDC (CCAP) for $145.6 million or $4.86 per share in cash.

Deal Updates:

  1. Umpqua Holdings Corporation (UMPQ) announced that its Board of Directors approved a quarterly cash dividend of $0.21 per common share. The dividend is payable on October 28, 2022, to shareholders of record as of October 14, 2022.
  2. On October 4, 2022, UK’s antitrust regulator set a deadline of March 1 to decide on Microsoft’s (MSFT) planned $69 billion acquisition of Activision (ATVI).
  3. October 4, 2022: According to The Wall Street Journal, Elon Musk has offered to close his $44 billion deal to buy Twitter (TWTR) on the terms he originally agreed to.
  4. On October 6, 2022, Spirit Airlines (SAVE) announced that independent proxy advisory firms Institutional Shareholder Services and Glass, Lewis have recommended that Spirit stockholders vote FOR the merger agreement with JetBlue Airways Corporation (JBLU).
  5. On October 6, 2022, Nielsen (NLSNannounced expiration and results of cash tender offer.
  6. Activision Blizzard (ATVI) announced that Lulu Cheng Meservey will assume a newly created role as Executive Vice President, Corporate Affairs and Chief Communications Officer.
  7. Enerflex (EFX.TO) announced that it continues to advance towards its pending acquisition of Exterran Corporation (EXTN) by securing its committed financing. The Transaction is on track to close early in the fourth quarter of 2022.


  1. F-star Therapeutics (FSTX) and invoX Pharma cleared UK’s National Security and Investment Act (“NSIA”).
  2. Sierra Wireless (SWIR) and Semtech Corporation (SMTCreceived approval from the Canada Business Corporations Act.
  3. On October 5, 2022, Brazil’s antitrust regulator CADE approved Microsoft’s (MSFT) takeover of Activision (ATVI).
  4. Terminix Global Holdings (TMX) – announced shareholders approval (Press Release)
  5. TransGlobe Energy Corporation (TGA) – announced shareholders approval (Press Release)


  1. Independent proxy advisory firm Glass, Lewis recommended that Avalara (AVLRshareholders vote against the company’s proposed sale to Vista Equity Partners.
  2. October 5, 2022: According to Reuters, Apollo Global Management (APO) and Sixth Street Partners, which had been looking to provide financing for Elon Musk’s proposed buyout of Twitter (TWTR), are no longer in talks with the billionaire entrepreneur.
  3. October 6, 2022: House Speaker Nancy Pelosi Commerce Chairman Frank Pallone (D-NJ) sent a letter to the Federal Trade Commission to express their concerns about the proposed purchase of Tegna (TGNA). In response, Standard General issued a statement regarding its pending acquisition of TEGNA (TGNA), stating that the proposed TEGNA transaction complies with all FCC rules without the need for any waivers, divestitures, or special treatment.
  4. October 6, 2022: According to The Wall Street Journal, a Delaware judge has postponed the trial, giving both Elon Musk and Twitter (TWTR) until 5 PM on October 28th to close the deal.
  5. October 6, 2022: According to Reuters, EU antitrust regulators are asking games developers whether Microsoft (MSFT) will be incentivized to block rivals’ access to Activision Blizzard’s (ATVI) best-selling games.

Shareholders Meeting Schedule

  1. VMware (VMW) – November 4, 2022
  2. Stealth BioTherapeutics (MITO) – November 15, 2022
  3. Yamana Gold (AUY) – November 21, 2022

Closed Deals:

  1. The acquisition of Change Healthcare (CHNG) by UnitedHealth Group Incorporated (UNH) on October 3, 2022. It took 635 days for this deal to be completed.
  2. The acquisition of Duke Realty Corporation (DRE) by Prologis (PLD) on October 3, 2022. It took 112 days for this deal to be completed.
  3. The acquisition of Hanger (HNGR) by Patient Square Capital on October 3, 2022. It took 74 days for this deal to be completed.
  4. The acquisition of Biohaven Pharmaceutical Holding Company (BHVN) by Pfizer (PFE) on October 3, 2022. It took 146 days for this deal to be completed.
  5. The acquisition of Global Blood Therapeutics (GBT) by Pfizer (PFE) on October 5, 2022. It took 58 days for this deal to be completed.
  6. The acquisition of Bluerock Residential Growth REIT (BRG) by Blackstone Real Estate on October 6, 2022. It took 290 days for this deal to be completed.
  7. The acquisition of Infrastructure and Energy Alternatives (IEA) by MasTec (MTZ) on October 7, 2022. It took 74 days for this deal to be completed.
  8. The acquisition of Convey Health Solutions Holdings (CNVY) by TPG Capital on October 7, 2022. It took 108 days for this deal to be completed.
  9. The acquisition of Randolph Bancorp (RNDB) by Hometown Financial Group on October 7, 2022. It took 193 days for this deal to be completed.

Weekly Spread Changes:

The table below shows weekly spread changes between September 30, 2022, and October 7, 2022.

Company Quote
Last Week
Spread Change
ELSE4.5Mobile X Global, Inc. (N/A)7.33%-4.55%11.88%All Cash
SAVE18.48JetBlue Airways Corporation (JBLU)6.6181.28%78.00%3.28%All Cash
SIMO64.37MaxLinear, Inc. (MXL)34.2265.94%62.90%3.04%Cash Plus Stock
ROG236.3DuPont de Nemours, Inc. (DD)52.3617.22%14.52%2.70%All Cash
EMCF32.83Farmers National Banc Corp. (FMNB)12.59-17.55%-20.16%2.61%All Stock
LOTZ0.2832Shift Technologies, Inc. (SFT)0.63956.18%61.53%-5.35%All Stock
TGA3.55VAALCO Energy, Inc. (EGY)5.310.62%9.44%-8.82%All Stock
TWTR49.18Elon Musk (N/A)10.21%23.63%-13.42%All Cash
MITO0.3101Stealth Parent Limited (N/A)6.42%22.58%-16.16%All Cash
FSTX6.13invoX Pharma (N/A)16.15%39.06%-22.91%All Cash
Top 10 deals with the largest spreads:

Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.

SAVE07/28/2022JetBlue Airways Corporation (JBLU)$33.50$18.4806/30/202481.28%47.09%
SIMO05/05/2022MaxLinear, Inc. (MXL)$106.82$64.3706/30/202365.94%91.17%
LOTZ08/09/2022Shift Technologies, Inc. (SFT)$0.44$0.283212/31/202256.18%247.04%
VMW05/26/2022Broadcom Inc. (AVGO)$142.50$109.8104/30/202329.77%53.53%
ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$73.3506/30/202329.52%40.81%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$85.00$66.0206/30/202328.75%39.75%
FCRD10/04/2022Crescent Capital BDC, Inc. (CCAP)$4.79$3.9603/31/202320.96%44.22%
SJR03/15/2021Rogers Communications Inc. (RCI)$29.48$24.6912/31/202219.41%85.36%
TSEM02/15/2022Intel Corporation (INTC)$53.00$44.802/15/202318.30%51.79%
ROG11/02/2021DuPont de Nemours, Inc. (DD)$277.00$236.312/31/202217.22%75.74%

Deals In The Works

Four new potential deals were added to the ‘Deals In The Works‘ section last week.

  1. On October 6, 2022, Reuters reported that Berry Corporation (BRY) is exploring strategic options that could result in a sale.
  2. On October 6, 2022, Engine Gaming and Media (GAMEcommenced a process to explore and evaluate strategic options to enhance and preserve shareholder value.
  3. On October 7, 2022, Bloomberg reported that Brookdale Senior Living (BKD) is exploring options including a potential sale.
  4. On October 7, 2022, PureTech Health (PRTC confirms receiving a non-binding proposal from Nektar Therapeutics (NKTR).


  1. On October 3, 2022, Engine Capital investor in Light & Wonder (LNW) (formerly known as Scientific Games Corp.) and its subsidiary Sciplay (SCPL) is urging the gaming companies to merge in an effort to improve value for their shareholders.
  2. On October 4, 2022, DXC Technology (DXC), confirmed that management has been approached by a financial sponsor regarding a potential acquisition of the company.
  3. On October 5, 2022, Republic First Bancorp (FRBK) received anticipated Nasdaq notice of delisting; plans to appeal determination.
  4. On October 6, 2022, Griffon Corporation (GFF) said that its strategic alternatives process is active and ongoing.
  5. On October 6, 2022, Atlas (ATCO) disclosed that the consortium (that previously announced a proposal to acquire all of the outstanding common shares of Atlas) has made meaningful progress in negotiation of a potential transaction at a per share cash price of $15.50, plus payment of all ordinary course third quarter and fourth quarter 2022 dividends regardless of the timing of any closing.

SPAC Arbitrage

There was one new SPAC IPO filed, five new SPAC combinations announced and one terminated last week. You can find new SPAC IPO announcements in our SPACs tool here.


  1. Aquaron Acquisition Corp. (AQUNU) announces pricing of $50 million IPO on October 3, 2022.
  2. On October 5, 2022, Plutonian Acquisition Corp. filed its S-1 for a $50 million IPO as the first SPAC to file for an IPO in October thus far.

New Business Combinations

  1. Estrella Biopharma, a preclinical-stage biopharmaceutical company focusing on cancer therapeutics, and TradeUP Acquisition (UPTDentered into a definitive business combination agreement.
  2. Complete Solaria and Freedom Acquisition I Corp. (FACT) announced a definitive agreement for a business combination.
  3. Pathfinder Acquisition Corporation (PFDR) and Movella, a full-stack provider of sensors, software, and analytics that enable the digitization of movement, entered into a definitive business combination agreement.
  4. American Oncology Network, a network of community-based oncology practices, and Digital Transformation Opportunities Corp. (DTOCentered into a definitive business combination agreement.
  5. ClimateRock (CLRC) and E.E.W. Eco Energy World PLC announced the signing of a definitive business combination agreement.


  1. Austerlitz I (AUS) and Austerlitz II (ASZ) both filed proxies stating that their sponsors are seeking shareholder approval to liquidate early.
  2. Atlantic Avenue Acquisition (ASAQintends to dissolve and liquidate, effective as of the close of business on October 6, 2022.
  3. On October 4, 2022, Tekkorp Digital Acquisition Corp. (TEKK) announced that it will no longer pursue an extension of the date by which it must complete an initial business combination.
  4. Avanti Acquisition Corp. (AVAN) announced that its board of directors has determined to redeem all of its outstanding Class A ordinary shares, effective as of October 20, 2022, because the company will not consummate an initial business combination.
  5. Vy Global Growth (VYGG) liquidated
  6. Atlantic Avenue Acquisition (ASAQ) liquidated
  7. On October 7, 2022, Sarissa Capital Acquisition Corp. (SRSAU) announced that it will not consummate a business combination and will instead liquidate its trust, effective as of October 31, 2022.
  8. On October 7, 2022, Orion Acquisition Corp. (OHPAU) filed a proxy for a shareholder vote to liquidate early.
  9. On October 7, 2022, Lux Health Tech Acquisition Corp. (LUXA) announced that it will not consummate a business combination and will instead dissolve and liquidate its trust, effective as of the close of business on October 29.


  1. Goldenstone Acquisition Limited (GDST) entered into a joint agreement to terminate its combination with blockchain-based payments company, Roxe Holding.

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I have long positions in Spirit Airlines (SAVE), Atlas Air Worldwide (AAWW), Biohaven Pharmaceutical (BHVN), Twitter (TWTR), First Horizon (FHN), Tower Semiconductor (TSEM) and TEGNA (TGNA). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.