bardi quant

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Merger arbitrage, a strategy adopted by many hedge fund managers, involves simultaneously purchasing and selling the stocks of two merging companies to create low risk profits. A merger arbitrageur reviews the probability of a merger not closing on time or at all. In an all-cash merger, investors generally take a long position in the target firm. In a stock-for-stock merger, a merger arbitrageur typically buys shares of the target company's stock while shorting, or selling, shares of the acquiring company's stock.

 

Utilizing BCM’s proprietary selection method/model, the Investment Manager determines the target by:

  • Researching then utilizing public information to conduct a Market, Company, and Deal Analysis

  • Estimating the probability of government intervention and the outcome of such intervention

    • i.e. an antitrust investigation and enforcement action

  • Monitoring current and impending litigation

    • i.e. government, commercial, or private

  • Evaluating the likelihood of regulatory approvals

  • Mitigating potential deal risks

    • i.e. acquirer termination, deal delay, material adverse changes to either party, shareholder disapproval, tax obligations, and financing concerns

  • Assessing the target company’s anti-takeover defenses

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