Tag Archives: Special situation



Analysis of Split-off Trading Strategies

Split-Offs proved to be very lucrative in generating low risk arbitrage returns.  Just last week yet another split-off (ECL/APY) closed successfully with $2,100 ‘riskless’ return for hedged trades (c. +11%), while at at the same time unhedged positions delivered $10,000 (c. +50%-70%) in a month. The difference in pay-offs is clearly very material; however, higher returns seemingly come with higher risks (exposure to share price fluctuations).

     

CRA International (CRAI) – Odd Lot Tender Offer – 5% potential upside

Current Price – $18.88

Offer Price – $18.00- $19.75

Upside – potentially 5% or $90 (if the upper pricing limit is used)

Expiration date –  21 March 2016

No proration for odd lot holders

SEC Filling

Summary:

We are conducting the tender offer through a procedure commonly called a modified “Dutch Auction.” This procedure allows you to select the price per share (in increments of $0.25) within a price range specified by us at which you are willing to sell your



Nationstar Mortgage (NSM) – Odd Lot Tender Offer – minimal upside currently

Current Price – $9.05

Offer Price – $8.2 – $9.4

Upside – potentially 3% or $35 (if the upper pricing limit is used)

Expiration date –  11 March 2016

No proration for odd lot holders

Some thoughts: With the recent market volatility there is a good chance that better buying opportunities will appear before expiry of the offer

SEC Filling

Summary:

Nationstar Mortgage Holdings Inc., a Delaware corporation, is offering to purchase shares of its common stock, par value $0.01 per share



Fortress Investment Group (FIG) – Odd Lot Tender Offer – 9% potential upside

Current Price – $4.36

Offer Price – $4.25 – $4.75

Upside – potentially 9% or $40 (if the upper pricing limit is used)

Expiration date –  4 March 2016

No proration for odd lot holders

SEC Filling

Summary:

Fortress Investment Group LLC, is offering to purchase for cash up to $100,000,000 of its Class A shares representing Class A limited liability company interests, no par value (the “Shares”), pursuant to auction tenders at prices specified by the tendering shareholders of not greater than

 

Siliconware Precision Industries (SPIL) – Tender Offer with Odd lot provision – 9% upside

Current Price – 7.55

Offer Price – 8.22

Upside – 9% ($134 guaranteed return for odd lots)

Odd lots – shareholders who own less than 200 shares will be bought out on priority basis.

Expiration date (to tender shares) –  11 February 2016

Tender document

This is a hostile tender offer carried out by ASX, and as such is has a higher risk of being cancelled than other tenders presented on this site. Moreover, the tender is subject to regulatory approval. However,



Franklin Covey (FC) – Dutch Auction with Odd Lot provision – 9% potential upside

Current Price – $16.29

Offer Price – $15.5 – $17.75

Upside – 9% or $140 (if the upper pricing limit is used)

Expiration date –  12 January 2016

SEC Filling

Summary:

We are offering to purchase up to $35,000,000 in value of shares in the Offer. On the terms and subject to the conditions of the Offer, we will determine a single per share price, not greater than $17.75 per share nor less than $15.50 per share, net to



Willis Lease Finance Corp (WLFC) – Odd Lot Tender Offer – minimal upside currently

The share price shot up right after the announcement but might reverse during the course of the tender.

Current Price – $17.39;

Offer Price – $15.5 – $18;

Upside – $60 or 3.5% (if the upper pricing limit is used);

Expiration date –  16 December 2015;

No proration for odd lot holders;

SEC Filling

Summary:

Willis Lease Finance Corporation is offering to purchase for cash up to 516,129 shares of its outstanding common stock, pursuant to auction tenders at prices specified by



Fly Leasing (FLY) – Expected Dutch Tender Offer

This is a possibility to start position before the tender offer details are revealed.

Fly Leasing announced last week, that the company will start Dutch tender offer for $75m. No further details on pricing or timing have been announced yet (expected early this week).

From historical experience, these Dutch tenders tend to have odd-lot provision and quite often price jumps upon pricing announcement (quite often arbitrage disappears after trading announcement.. Keeping in mind that FLY is currently trading at 12-month



NCR Corporation (NCR) – Odd Lot Tender Offer – $250 upside

Current Price – $27;

Offer Price – $26 – $29.5;

Upside – $250 or 9% (if the upper pricing limit is used);

Expiration date –  11 December 2015;

No proration for odd lot holders;

SEC Filling

Summary:

NCR Corporation, a Maryland corporation invites our shareholders to tender shares of our common stock, par value $0.01 per share, pursuant to auction tenders at prices specified by the tendering shareholder of not less than $26.00 and not greater than $29.50 per Share. We are offering