First Horizon (FHN), mcap=$11.4bn, price $21.22 vs $22.25

Arb pitch:
– Large-cap bank merger with 18% spread.
– Getting acquired by
TD at $25/share.
– Expected closing in early 2023, similar recent mergers took 6-13 months to close.
– Regulatory approval/delay is a key risk.
– Merger would create the 6th largest U.S. bank.

Valuation: 18% upside to acquisition offer of $25/share. In case the merger fails, 20% downside to $15-16/share.

Exp. gain: +18% to $25/share.

Full FNH arb write-up (free guest account required):


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