InsideArbitrage January 2023 Mid-Month Update – iRobot Arbitrage Opportunity

  • January 16, 2023
Editor’s Note: When we discussed the 1Life Healthcare (ONEM) arbitrage opportunity in the August 2022 Special Situations newsletter the spread on the deal was almost the same as the spread for iRobot (IRBT), the other acquisition by Amazon.com. With the spread on iRobot increasing significantly in the last few months, I asked Frank to look into the opportunity for our mid-month update and the article below is his analysis of the situation. I agree with Frank that an options based play makes the most sense in this situation. Frank Moneymaker is a Boston-based Investment Analyst at LVS Advisory specializing in merger arbitrage research. He can be reached at frank@lvsadvisory.com. Summary: Heightened regulatory concerns regarding data privacy pose outsized risks beyond that of most arbitrage deals Multiple competition agencies are in the process of updating their enforcement policies regarding Big Tech mergers The market is implying a 50/50 chance that the deal breaks, creating an opportunity to profit from directional conviction and/or an extended regulatory process. The proposed merger between Amazon.com Inc. (AMZN) and iRobot Corp (IRBT) is one of the most contentious deals outstanding.Amazon announced its intentions to acquire iRobot in early August for $61.00 per share, valuing the home robotics company at $1.7...

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