Merger arbitrage experiences resurgence

There is growing investor appetite for merger arbitrage in the context of rising M&A activity but also a structural decrease in deal spreads

biba-iib-merger-jigsaw

After several years of underwhelming corporate activity, mergers and acquisitions (M&A) is predicted for a comeback in 2014, with new deals evidencing a resurgence in arbitrage opportunities as the year looks set to be a strong one for takeovers.

Arbitrageurs buy shares of the firm being acquired and short the shares of the acquirer. But a downturn in deals saw many hedge funds exit the strategy, and also witnessed large outflows from other merger arbitrage products. According to financial data

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here