Investing
More on Pending Merger Arb Spreads (FRK, LEND, ACXM, DJ, NWS, VMC, APPB, IHP)
Published:
Last Updated:
Earlier today, we sent out a couple pieces discussing some of the pending mergers and spreads still having wide ranges. This can be indicative of a deal at risk, but some will close and will offer significant opportunities for those willing to tread where others fear. Our first list included some of the larger names out there (ACS, URI, FDC, CCU) and then we covered a second batch (TXU, TRB,SLM, CEN). We’ll be sending out some specific calls to subscribers of our Special Situation Investing Newsletter ahead of Labor Day.
The Dow Jones (NYSE:DJ) buyout by Rupert Murdoch’s News Corp (NYSE:NWS) isn’t aprivate equity transaction, but it might as well be. With a $60.00buyout, the current $58.70 price does not signal much perceived risk inthis deal closing. Rupert wants it and he has won the deal. There isa reason Murdoch made the list of entrenched leaders, and the fact that he gets his way is the largest part of it.
Florida Rock (NYSE:FRK) shareholders have already agreed to the buyoutby Vulcan Materials (NYSE:VMC), but at $61.00 this is well under the $68.03cash and stock deal. This was at a large 40+% premium, so the VMCshare price being lower not act as a hurdle and that old price and thisone should be expected to close.
Acxiom’s (NASDAQ:ACXM) $27.10 buyout offer from SilverLake and Value Actcurrently has only a $23.25 price, giving it a 14% discount to thebuyout price, or actually a 16.5% return from the current price for themerger-arbs.
Accredited Home Lenders Holding Co. (NASDAQ:LEND) is still a deal completelyat risk as the Lone Star buyout has been extended and no one expectsthat $15.10 price to be done. LEND is suing Lone Star to close thedeal, but if this one gets done at all it would be only logical that itwould close at a far lower price.
We still view the old Applebee’s (NASDAQ:APPB) acquisition by IHOP (NYSE:IHP) being a takeunder, and we didn’t see much premium value when that had spiked up earlier this year in hopes of a deal.
This is a mere sample of pending mergers we are covering to look for opportunities in the Special Situation Investing Newsletter our paid subscribers access. We will be covering some of these and others with exact plays ahead of the Labor Day holiday.
Jon C. Ogg
August 20, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
