Yuanxi Zhang
Long/short equity, value, special situations

NTS Realty Holdings: Settlement Paves Way For 8.5% Arbitrage Return

Editors' Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Executive summary

  • NTS Realty Holdings' new merger agreement leads to 8.5%-15.0% upside if closed.
  • Lack of financing condition and favorable termination clause deserves higher odds to close than the current market price implies.
  • The transaction will be processed on an expedited process. We expect the deal to close in late May.
  • I recommend a long position in the stock.

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Thesis

NTS Realty Holdings (NYSEMKT:NLP) announced that it has reached a preliminary settlement with plaintiffs regarding its go-private deal. A conspicuous change in the merger...

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