Merger Arbitrage Blog

Out of the Time Warner trade

Late afternoon on 12th Jun 2018, Judge Leon ruled that AT&T ($T) will be allowed to buy Time Warner ($TWX) without any conditions. This ruling is long awaited and what I have expected long ago. It is just unfortunate that the DOJ tried to block a merger with very little tangible harms to the consumer, wasting taxpayer and investors’ time and money in a fruitless exercise for more than 7 months.


I had expected $T to drop a little or soar with $TWX now onboard to help with profits but the market is signalling otherwise. $T dropped 6% and $TWX only gained 1.8% to end the day at $98. I also saw rumors that DOJ is preparing for an appeal which will delay the closing time and hence, I quickly took action to close my trade at near $99.50.


It’s a shame that I will still lose overall in this trade which I opened since last September but I am happy to be right in the result and lose somewhat lesser money. I may initiate another trade if the DOJ appeals and cause the price to drop a little bit further.

Updated: June 14, 2018 — 8:00 am

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