It's no surprise that Republican administrations in general are seen as more friendly towards mergers than Democrats, and since the election, arbitrage spreads (the difference between a target's deal price and its current price) have tightened to the 8-9% range from 11%.
However, on an annualized basis, there are still plenty of deals out there offering double-digit returns.
Merger-arb shop WallachBeth Capital is fan of Harman International Industries (NYSE:HAR), which earlier this month drew a cash bid from Samsung for $112 per share vs. its close Friday of $109.74. Another pick is B/E Aerospace (NASDAQ:BEAV) which closed at $59.79 and has a cash and stock deal in hand from Rockwell Collins (NYSE:COL) for $62 per share.
Lutetia Capital likes Cabela's (NYSE:CAB), which closed the week at $62.50 vs. Bass Pro Shops' $65.50 bid.
The Merger Fund's Roy Behren is confident Qualcomm's (NASDAQ:QCOM) bid for NXP Semiconductors (NASDAQ:NXPI) will pass regulatory muster. NXP's close yesterday of $99.51 is a full 10.5% below the $110 cash offer. If the deal closes in nine months, it's an annualized return of 12.6%.
Another deal with maybe overblown antitrust concerns is Danone/WhiteWave Foods (NYSE:WWAV). The spread is just 2%, but a close early next year would mean an annualized return over 10%.
Seeking Alpha contributor Chris DeMuth stays on top of merger arb spreads with his M&A Daily.