My first of many write-ups on Seeking alpha. Feel free to comment/add/discuss
Summer is essentially over. That means football, school, the fall and September. Our 9th month of the year is historically the worst for stocks. But deal stocks do their own thing. And with a typically quiet August in arb land it seems almost every arb stock I own has news in the coming month.
DELL-Sept 12 shareholder vote. With Icahn losing in court, a change in the voting by-laws disallowing the uncast votes and the new record date which gives all the arb funds a vote this should be a formality. Michael Dell beat Icahn. That alone makes me want to invest in his company going forward though I can't. Even when Icahn loses he makes tens of millions. Must be nice. Still 11 cents on the table.
DOLE- Sept 12 go shop period ends. 13.50 deal from Dole founder Murdock is solid but at least four other interested parties are snooping around. Stock trading between 15 and 30 cents above deal price. Are the buyers above 13.50 smart money or gamblers? I hope smart money as I am one of them. If one isn't convinced we will see a higher bid he could sell the Dole 14 Put and take in 45 cents premium. I did this on Friday. If an overbid announces itself I make 45 dollars per contract (assuming deal closure) and if not I would lose 5 dollars per contract.
IN-If anyone is involved in this arb and it feels like this has been going on forever...well it has. Honeywell is paying 10 bucks here. Last we heard back in June the companies once again pushed back the closing timeframe to as soon as possible in the 3rd quarter. Well that didn't happen. They've been working with the FTC and all that's left of the 3rd quarter is September. 1 1/2 percent left. If anyone was really scared of this not going through I would think we would see some put buying. But three of the four option months have a total of 2 put contracts in the open interest column. IN hasn't closed below 9.85 since before the 4th of July.
SFD-Shareholder meeting September 24th. Closing about a month later. Plenty of issues. Starboard is an activist involved here. Selling out to a Chinese company initially caused a political uproar though it has quieted down considerably. We could see some more noise as we get close to the finish line. Spread has tightened though the 32 PUT is still bid more than a dollar. Earnings Friday.
RUE-Sept 19 shareholder meeting. Stock had been beaten up recently probably due to other teen clothing stocks poor results. It traded almost 5 percent lower than deal price but recovered half of that.
TSRX-Sept 11 tender will expire unless extended. No HSR issues. CVR can be had for 16 cents with a chance to make 1 or 2 dollars. The milestones are not far apart so it is probable that if the first one is met (125 million tedizolid sales) the second one will kick in on a pro rata basis (125-135 million). The CVR will not trade publicly
PVD-Tender ends Sept 27. Seems like the possible additional dividend will not be paid. Still 75 cents on the table but in percentage terms not too much.
ALCS-September may bring holders another bump or a final resolution. Stock has been trading 30 cents above the offer (14.60 vs 14.30 offer)
LVB-Same as ALCS. Another bump? Or is 40 really best and final. These possible continued overbids come down to entry price. Two days ago LVB could have been had for approx 40.05. It traded at that price. 5 cents for a shot at 20 or 40 times that would have been a risk/reward almost anyone could live with.
BMC-CFIUS review may be done in Sept. But if not shouldn't be too much longer. 25 cents still in spread
SPRD-Tuesday shareholder meeting. May get update. 74 cents in spread. Spread has tighened gradually since deal announced in mid July. Often Chinese deals trade wider than US ones so the 'highish spread' doesn't overly concern me.
CTB-Vote Sept 30. Lot going on here. CTB's last quarter stunk. Chinese strikers at plant in China. Special review in India. David buying Golliath. Financing in a few weeks. Thing is all is coming to a head in September. I have never understood the Texas type spread. I get why it wouldn't be Rhode Island but still.
Additional disclosure: I am also short Puts on some of the stocks mentioned above