Merger Arbitrage: How to Profit from Global Event-Driven Arbitrage

ISBN-13: 9781118736357 / Angielski / Twarda / 2016 / 528 str.

Thomas Kirchner

Opis

Mitigate risk and increase returns with an alternative hedge fund strategy Merger Arbitrage: How to Profit from Event-Driven Arbitrage, Second Edition is the definitive guide to the ins and outs of the burgeoning merger arbitrage hedge fund strategy, with real-world examples that illustrate how mergers work and how to take advantage of them. Author Thomas Kirchner, founder of the Pennsylvania Avenue Event-Driven Fund, discusses the factors that drove him to invest solely in merger arbitrage and other event-driven strategies, and details the methods used to incorporate merger arbitrage into traditional investment strategies. And while there is always a risk that a deal will fall through, the book explains how minimal such risks really are when the potential upside is factored in. Early chapters of the book focus on the basics of the merger arbitrage strategy, including an examination of mergers and the incorporation of risk into the arbitrage decision. Following chapters detail deal structures, financing, and legal aspects to provide the type of in-depth knowledge required to execute an effective investment strategy. The updated second edition stresses new, increasingly relevant information like:

• Worldwide legal deal regimes
• UK takeover code
• UK takeover code global offspring
• Regulators around the world

The book provides clear, concise guidance on critical considerations including leverage and options, shorting stocks, and legal recourse for inadequate merger consideration, allowing readers to feel confident about trying a new investment strategy. With simple benefits including diversification of risk and return streams, this alternative hedge fund strategy has a place in even the most traditional plan. Merger Arbitrage: How to Profit from Event-Driven Arbitrage, Second Edition provides the information that gives investors an edge in the merger arbitrage arena.

Spis treści

Preface vii

Acknowledgments xi

PART ONE The Arbitrage Process 1

CHAPTER 1 Introduction to Merger Arbitrage 3

CHAPTER 2 The Mechanics of Merger Arbitrage 18

CHAPTER 3 The Role of Merger Arbitrage in a Diversified Portfolio 50

CHAPTER 4 Incorporating Risk into the Arbitrage Decision 103

PART TWO Pitfalls of Merger Arbitrage 141

CHAPTER 5 Sources of Risk and Return 143

CHAPTER 6 Deal Structures: Mergers and Tender Offers 188

CHAPTER 7 Financing 217

CHAPTER 8 Legal Aspects 250

CHAPTER 9 Management Incentives 293

CHAPTER 10 Buyouts by Private Equity 328

CHAPTER 11 Minority Squeeze–Outs 341

PART THREE Investing in Merger Arbitrage 361

CHAPTER 12 Government Involvement 363

CHAPTER 13 Four Ways to Fight Abuse of Shareholders in Mergers 409

CHAPTER 14 Investing in Arbitrage 435

Notes 475

About the Author 483

Exercises 485

Index 497

O autorze

THOMAS F. KIRCHNER is a portfolio manager of the Quaker Event Arbitrage Fund, a mutual fund that uses merger arbitrage as one of its investment strategies.

Blurb

The Ultimate Guide to Risk Arbitrage Fully Revised and Updated for Global Investors

Merger Arbitrage: How to Profit from Global Event–Driven Arbitrage, Second Edition is the newly revised, authoritative guide to the ins and outs of the explosive merger arbitrage hedge fund strategy.

Designed with the serious investor in mind, this expanded edition sheds light on the most important issues in the field worldwide, with an international collection of examples illustrating the practical realities of mergers and the ways the best in the field are profiting from these event–driven transactions. Brand–new coverage in this much–needed update includes:

• A relevant, global perspective on this specialized approach to investing
• A thorough examination of the United Kingdom′s Code on Takeovers and Mergers and similar regulations in other countries
• An expanded toolkit of knowledge and techniques for entering the global market with a distinct advantage

In a global marketplace of volatility and unpredictability, investors need a cornerstone of low risk and high–probability returns in their portfolios, and Merger Arbitrage, Second Edition has the perfect way to get it.