1st Edition
by Lionel Melka (Author), Amit Shabi (Author), Michael Zaoui (Foreword)
A wave of corporate mergers,
acquisitions, restructuring, and similar transactions has created
unprecedented opportunities for those versed in contemporary risk
arbitrage techniques. At the same time, the nature of the merger wave
has lent such transactions a much higher degree of predictability than
ever before, making risk arbitrage more attractive to investors.
Surprisingly, there is little transparency and instruction for investors
interested in learning the latest risk arbitrage techniques. Merger Arbitrage – A Fundamental Approach to Event-Driven Investing helps readers understand the inner workings of the strategy and hedge funds which engaged in this investment strategy.
Merger
arbitrage is one of the most commonly used strategies but paradoxically
one of the least known. This book puts it in the spotlight and explains
how fund managers are able to benefit from mergers and acquisitions. It
describes how to implement this strategy, located at the crossroad of
corporate finance and asset management, and where its risks lie through
numerous topical examples.
The book is split into three parts.
The first part, examining the basis of merger arbitrage, looks at the
key role of the market in takeover bids. It also assesses the major
changes in the financial markets over recent years and their impact on
M&A. Various M&A risk and return factors are also discussed,
alongside the historical profitability of merger arbitrage, the
different approaches used by fund managers and the results of academic
studies on the subject. The second part of the book deals with the risk
of an M&A transaction failing in terms of financing risk,
competition issues, the legal aspects of merger agreements and
administrative and political risks. The third part of the book examines
specificities of M&A transactions, comprehensively covering hostile
takeovers and leveraged buyouts. Each part contains many recent examples
and case studies in order to show how the various theories and notions
are put into practice.
From researching prospects and determining
positions, to hedging and trading tactics, Lionel Melka and Amit Shabi
present the full complement of sophisticated risk arbitrage techniques,
making Merger Arbitrage a must read for finance and investment
professionals who want to take advantage of the nearly limitless
opportunities afforded by today's rapidly changing global business
environment. The book builds on its authors’ diverse backgrounds and
common experience managing a merger arbitrage fund, providing readers
with an enriching inside view on M&A operations.
