Merger Arbitrage

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Merger Arbitrage

In the context of hedge funds, a style of management that involves the simultaneous purchase of stock in a company being acquired and the sale of stock in its acquirer.

Merger Arbitrage

A strategy in which a hedge fund buys shares in two companies that are in the process of merging and sells the shares after the merger is complete. Merger arbitrage can be profitable because stock prices often decline in the process of a merger because of the possibility that the merger negotiations will fail. They then go to a higher price after the merger is complete. Because this phenomenon is so consistent, the hedge fund using merger arbitrage effectively makes a riskless profit.

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We note here that merger arbitrage (also known as risk arbitrage) is a substrategy in the event-driven style discussed earlier.

Hedge funds: an industry in its adolescence

Merger arbitrage specialists, which aim to profit from the spread between a target group s share price after a takeover announcement and the closing price at completion of the deal, have seen $841m in net inflows since January

United States : Merger arbitrage funds eye takeover revival

Credit, merger arbitrage and special situations funds in the event-driven subindex gained 0.5%, well behind the HFRX event-driven index return of 1.6%.

Liquid Alts Trailed Hedge Funds in February

Omega has expressed its support right after other Sprint shareholders did so, including US hedge fund manager John Paulson and merger arbitrage company Westchester Capital, Reuters said.Country: USASector: TelecommunicationsTarget: Sprint Nextel CorporationBuyer: DISH Network Corporation, SoftBank CorporationVendor: Omega Advisors Inc, John Paulson, Westchester CapitalDeal size in USD: 25.5bn, 20.1bnType: Corporate acquisitionFinancing: Cash & StockStatus: Agreed, BiddingComment: The USD25.5bn price refers to DISH's offer.

Omega shows support for Dish's bid for Sprint

HEDGE FUND REPLICATION ETFs ASSETS * TOTAL RETURN ASSETS CURRENT EXPENSE FUND NAME/TICKER (MLNS) 1-YEAR 3-YEAR PRICE RATIO IQ Hedge Multi- 113.0 2.6 NA 27 1.08 Strategy Tracker ETF/QAI Credit Suisse 45.0 NA NA 20 0.55 Merger Arbitrage Liquid Index/CSMA IQ Merger Arbitrage 23.0 -3.1 NA 25 0.75 ETF/MNA Credit Suisse 23.0 NA NA 22 0.45 Long/Short Liquid Index/CSLS Data through 12/23/10 except VDE, through 12/27.

Replication offers ETF investors hedge fund exposure

Associated Capital Group operates as diversified financial services and investment management business with three core pillars of operations; a principal strategies group which invests the firms proprietary capital in new and existing businesses; an asset management business that emphasizes event driven value and merger arbitrage oriented alternative investment portfolios for institutions and high net worth investors; and institutional research services business, publishing research as Gabelli & company, and was founded in 1976.

Associated Capital names interim CFO

The event-driven sub-index of credit, merger arbitrage and special situations funds gained 0.3% in September, outperforming its HFRX counterpart by 22 basis points.

Liquid Alts Underperformed Hedge Funds in September

GAMCO Investors said that its advisor subsidiary, Gabelli Funds has launched GAMCO Merger Arbitrage, a sub-fund within the GAMCO International SICAV.

Gabelli Funds launches merger arbitrage UCITS

Various factors will affect the level of the Fund's income, such as its asset mix and use of merger arbitrage strategies.

The GDL Fund declares third quarter distribution of USD 0.16

Special situations, credit and merger arbitrage funds in the liquid alternative event-driven sub-index gained 0.6% in August, 11 basis points behind the HFRX event-driven index.