Welcome to the Crackdown issue of M&A Daily
Russia banned LinkedIn (NYSE:LNKD) because it does not store users' data on Russian-based servers. They also threatened both Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) with potential bans. According to LinkedIn:
LinkedIn's vision is to create economic opportunity for the entire global workforce. We are starting to hear from members in Russia that they can no longer access LinkedIn. Roskomnadzor's action to block LinkedIn denies access to the millions of members we have in Russia and the companies that use LinkedIn to grow their businesses. We remain interested in a meeting with Roskomnadzor to discuss their data localization request.
Russia might not like LinkedIn, but from an investment perspective, I like them both. The Microsoft (NASDAQ:MSFT)-LinkedIn's $2.49 arb spread offers a 16% IRR if the deal closes in December. It has secured antitrust approval in the US and it awaits clearance in the EU. I am also a Russia bull; one of my favorite ways to get Russian exposure is via shorting the Direxion Daily Russian Bear 3x ETF (NYSEARCA:RUSS).
Russia is among the world's cheapest country markets with a CAPE of 5.1. It trades at an average of 0.9x book value and has an average dividend yield of over 4%.
The EU Phase II deadline for the ChemChina acquisition of Syngenta (NYSE:SYT) was extended by ten business days to March 29. The parties are committed to their deal. The $18.50 arb spread offers a 66% IRR if the deal closes by April.
Today is the HSR, FCC and PUC application filing deadline for the GTCR acquisition of Inteliquent (NASDAQ:IQNT).
Today is the HSR filing deadline for the Windstream (NASDAQ:WIN) acquisition of EarthLink (NASDAQ:ELNK). The $0.38 arb spread offers a 12% IRR if the deal closes by July. More to come in future editions of M&A Daily…
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Disclosure: I am/we are long LNKD, SYT.
Additional disclosure: Chris DeMuth Jr and Andrew Walker are portfolio managers at Rangeley Capital. We invest with a margin of safety by buying securities at discounts to their intrinsic value and unlocking that value through corporate events. To maximize returns for our investors, we reserve the right to make investment decisions regarding any security without notification except where notification is required by law. This post may contain affiliate links, consistent with the disclosure in such links. We manage diversified portfolios with a multi-year time horizon. Positions disclosed in articles may vary in sizing, hedges, and place within the capital structure. Disclosed ideas are related to a specific price, value, and time. If any of these attributes change, then the position might change (and probably will).