TXNM Energy (TXNM): $56.72
Market Cap: $5.26 B
Deal Value: $11.5 B
Regulators and the macro environment of a deal define the kind of path it has to take in order to complete the merger. Such is the case with the merger of U.S. Steel (X) and Nippon Steel, which finally received the green light from the Trump administration, giving hope that the deal might finally close. The spread immediately collapsed from over 28% profit to just 5.75% after President Trump’s Truth Social post announcing a partnership between the two steelmakers.
Just days before this post, the famous hedge fund manager Dan Loeb of Third Point tweeted that “You could actually drive a Cybertruck through the Nippon/US Steel spread.” This 5.75% spread is still quite attractive for arbs if the deal closes in the next month or two. The reason it exists is because of the on-again, off-again policies by the Trump administration and worries that the deal could still get derailed.