Do you invest in Special Situations?

Join like-minded investor community and discover new investment ideas

We focus on special situation investment and risk arbitrage ideas with short term catalysts. All investment opportunities are tied to some specific corporate action or event and are expected to generate returns in the near future with lower risk. Unbiased and high quality research is provided for each case.

Sign Up today and get access to Active Ideas. Previous ideas are free to view for all visitors, however currently actionable ideas are restricted to members only. 

If you come across any actionable special situation opportunities, feel free to reach out and get FREE Membership.

Login to see active ideas

Inactive ideas



Advanced Emissions Solutions (ADES) – Tender Offer + Expected Dividend – 20%+ upside

Current Price –$9.85

Expected Price - $12

Upside – 20%+

Expiration Date - June 2017

This is a two part special situation. The first one is a simple dutch tender with odd-lot provision. The second part comes from general undervaluation of the company where expected dividend (yet to be announced, but already communicated by management) could serve as a catalyst. At the same time the company is trading below contractually secured cashflows in the RC segment and has significant upside optionality from other business segments.



Reaves Utility Income Fund (UTG) – Mean Reversion – 5% upside

Current Price – $31.5

Expected Payout – $33.4

Upside – 5%

Expiration Date – 4th of October 2017

UTG is closed-end fund investing in utility sector. The fund issued transferable rights to subscribe to new common shares. For every three rights held, a holder of rights may buy one new common share of the Fund at 5% discount to 5 day average closing prices preceding the expiration date (October 4th). This created an arbitrage play whereby the buyers/holders of rights were shorting UTG common stock



OCB Bancorp (OJCB) – Merger Arbitrage – 10% uspide

Current Price – $12.75

Acquisition Price – $14

Upside – 10%

Expiration Date –  Q4 2017

This is straight forward merger arbitrage opportunity in nanocap land. Liquidity is very low – thus limit orders and lots of patience are needed to accumulate the position. I consider current spread (10%) to be attractive as I see limited risks of this deal falling apart. Low liquidity is likely the main reason for the spread to exists.



Essex Rental (ESSX) – Liquidation – 67% potential upside

Current Price – $0.21

Expected Payout – $0.17 – $0.35

Upside – 67% (at high end of the expected range)

Expiration Date – TBD

Essex Rental was a struggling and over-leveraged crane equipment rental company. Over the last year the company has liquidated/agreed to sell both of its operating divisions and shareholders approved plan of dissolution on the 5th of June. The proceeds for equity holders are expected to be in the range of $0.17 – $0.35 per share.



White Mountains Insurance (WTM) – Odd Lot Tender – $1200 upside (unlikely)

Current Price – $863

Offer Price – $825 – $875

Upside – $1200 (for odd lot holders if priced at the upper limit)

Expiration Date – 14th of September, 2017

This is a short note as situation is straight forward and most of the members already have familiarity with odd-lot tenders. I am mostly flagging this due to high potential upside in dollar terms (percentage wise it is only 1.3%). Risk/reward is unfavorable and I have no position at the moment.



Ferronordic (FNMA-PREF.ST) – Preferred Redemption – 12% upside

Current Price – SEK 1070

Expected Price – SEK 1200

Upside – 12%

Expiration Date – Q3-Q4 2017

Ferronordic  preferreds are very likely to be redeemed by the company at 12% premium to current market price. Recent communication by the company hints that this is likely to happen before the next dividend payment (Oct 2017). Preferreds trade in Stockholm and it is possible to buy then through IB.



Prospect Japan Fund (PJF.LON) – Merger Arbitrage – 44% upside

Current Price – $1.26

Expected Buyout – $1.81

Upside – 44%

Expiration Date – expected in H1 2017

Prospect Japan Fund trades below its NAV and received a non-binding all-stock buyout offer from the related party. This offer values the fund at $2.15/share – equivalent to 70% upside. The merger is very likely to go through. The biggest risk is market price of the acquirers shares which affects not only the eventual payout (no possibilities to hedge) but also the NAV of PJF.



Tropicana Entertainment (TPCA) – Tender Offer – 5.5% expected upside

Current Price – $42.6

Offer Price – $38 – $45

Upside – 5.5% (if priced at the upper limit)

Expiration Date – 2nd of August, 2017

This tender offer seems to be a step towards Carl Icahn taking the company private. Icahn’s IEP already owns 72.5% of the outstanding shares and will have 80%-95% after the tender. Due to this reason I believe that tender pricing at the upper limit is very likely (thus low risk 5.5% upside). After the tender Icahn will



Destination Maternity (DEST) – Merger Arbitrage – 34% upside

Current Price –$3.49

Offer Price - $4.6

Upside – 34%

Expiration Date - Q3 2017 (expected)

Destination Maternity is due to merge with french Orchestra Premaman (KAZI) and the spread is 34%. The main official rationale for the merger is revenue synergies as both companies are selling complimentary products in different geographies.



AP alternative Assets (AAA:AMS) – Liquidation/Arbitrage – 8% upside

Current Price –$35.5

Offer Price - $38.5

Upside – 8%

Expiration Date - Q1 2018 (or earlier)

8% in a year might not sound overly attractive at first, but I consider this arbitrage opportunity to be close to risk free. The partnership will gradually distribute its only asset (which is ATH shares – large cap health insurer) to unitholders and then liquidate. AAA trades in Amsterdam and it is possible to purchase units using Interactive Brokers.



Rite Aid (RAD) – Merger Arbitrage – 77% upside

Current Price –$3.67

Expected Price - $6.5

Upside – 77%

Expiration Date - Dec 2017

This is my second look at the pending WBA/RAD merger – I was spectacularly wrong the first time and the only consolation is that market was wrong as well – the spread narrowed to 3% before the deal started collapsing. The merger agreement has been adjusted – instead of $9/share WBA is planning to acquire RAD at $6.5-$7/share (77% upside) and higher number of stores will be divested



China Digital TV (STVVY) – Ex-dividend day – 70% potential return

Current Price –$1.4

Expected Price - $0.35 (if today is the ex-dividend day)

Upside – 70%

Expiration Date - May 26th, 2017

This is a quick message, as this is a timely situation and I did not have time to do a full write-up. Shares at current prices are either a good short (if today is ex-dividend) or a good long (if today is not ex-dividend), so if anyone manages to figure out which way it is, you stand to make a ton of

 

Qiwi PLC (QIWI) – Tender Offer – 13% upside

Current Price – $24.28

Acquisition Price – $28

Upside – 13%

Expiration Date –  TBD

Otkritie Holdings announced intention to commence tender offer to purchase additional 45%-55% of class B shares of QIWI at $28/share., which is 13% premium to the current price.