Merger Arbitrage Spread Performance – 11 November 2018

This week’s star performer was KTWO gaining 2.92%. Following the formality of a shareholder vote in favor of the takevoer on November 7th the stock immediately jumped to the offer price of $27.50. The necessary documentation was filed Friday morning and the stock ceased trading. Last weeks 2nd best performer is again in the number two spot. RCII, up 1.83% (an almost identical increase to last week) announced better than forecast results on Monday beating analysts forecasts by $0.04 per share. This immediately sent the stock up almost 1%. In third place also showing a strong performance is NXTM 1.51% which was last weeks best performer. The stock continues to creep towards its offer price as completition of the deal becomes more certain. HIFR traded high above its offer price on broker reratings (strange, in light of the current takeover bid) and one unsubstantiated rumor of a large stake being amassed. At one stage the stock was more than 4% above its offer price (as observed in one of our tweets) but finished the week trading at a 1.25% premium. Solid gains throught the week were also recorded by RHT 0.88%, AVA 0.63% & DNB 0.46%.