Merger Arbitrage Blog

Sold $ALR, $WGL, $FGL. Bought $CST. Added $ANF

alere SOLD ALERE: This trade turns out to be a winner. I was waiting for Alere to release their audited financial statements and as promised, Alere filed its Form 10-K, Reports Fourth Quarter and Full Year 2016 Financial Results and the share price prompted rose 2% to $50. I sold all my holdings generating 137% returns on a per annum basis.  I left the remaining 2% spread on the table while the deal with Abbott is awaiting completion in Q3 2017.

SOLD WGL, FGL:  Sold these two minor positions for a small profit as I am unwilling to hold on for several more months. Will return when there is a better entry point.

BOUGHT CST Brands: This is a short term high probability play. CST Brands is awaiting regulatory approval from its phase 2 review from FTC for its merger with rival Alimentation Couche-Tard Inc, parent of Circle K convenient shop chain. I believe there are enough competition left in the convenient shop chain sector including 7-11 so the merger party will only have to make some minor concessions for approval. The management had guided the merger completion to be end of June (about 22 days left) so the returns is about 6.5% on an annualized basis.

ADDED Abercrombie & Fitch: Added more as the price continued to slide. The suitors should be still bidding, even before factoring in the low merger price, the dividend yield of 6% is still good returns.

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