Merger Arbitrage Limited produces a constantly updatedlist of the largest pending cash based merger arbitrage spreadsin excel format. The top 20 list, (known as T20 Portfolio) highlights investability and profitability for the trader. Inclusion in the list is subject to thescreening process. Each week we archive this list for future reference.
Finding arbitrage deals that work for you can be a painstaking process. That is why we created our customised Mergers & Acquisitions news feed. Scroll through the latest headlines from theUSA, Canada, UK, India, Australia, Chinaand more to stay one step ahead of the competition with the latest merger news stories from around the globe. We also publish adedicated news feed focussing on the spread tracker listreferred to above.
In relation to ourSpread Tracker Listof largest merger arbitrage spreads, Merger Arbitrage Limited also produces a weekly performance commentary of the spread tracker list constituents from the previous week. We review key news announcements and significant stock movements alerting the trader topotential trading opportunities.
Understanding how merger arbitrage works is vitally important. Merger Arbitrage Limited producesFREEevergreen content covering a range of topics related to the advancement & understanding of trading merger arbitrage. Topics includehidden sources of riskin merger arbitrage, a guide to using Interactive Brokers Arbitrage trading tool, practical examples and more.
Merger Arbitrage Limited produces an array of tools to assist the arbitrageur. These include areading listof Event Driven Investment related books and anacademicresource list. There are numerous calculators including aFREEexcel basedspread calculatoravailable for download for stock based merger arbitrage spreads which can also be used in a stat arb or pairs trading strategy. We also have aMerger Arbitrage Forumwhere traders can initiate and discuss the latest topics of spreads in merger arbitrage.
Merger arbitrage is anevent driven investment strategyand a mainstay of the hedge fund industry. A trader employing this strategy is an arbitrageur. Arbitrageurs review the merger particulars after the announcement of a deal and calculate the probability of the merger closing successfully or unsuccessfully.
There are various financing structures used in Mergers & Acquisitions. In order to purchase the target companys stock, the acquirer can offer its own stock as payment or use cash. However, occasionally, the acquirer will use a combination of stock and cash to finance the deal.
Typically, the stock price of the target company trades at a slight discount to the acquisition price following theannouncement of the deal. The discount, orspread, exists because of deal closing uncertainty and market inefficiencies. Subsequently, the arbitrageur looks to take a position in the target stock having forecasted a successful conclusion to the merger. As the deal moves towards a successful close, the spread narrows and the arbitrageur makes a profit.
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