M&A gathers announced deals to buy or combine companies: tender offers (a public offer at a fixed price) and mergers (cash, stock or mixed consideration). After the announcement the target trades below what is offered for as long as completion is in doubt; that discount is the spread, and capturing it — buying after the announcement and waiting for the close — is merger arbitrage.
It concentrates the deal flow: there is almost always live M&A to analyse, with published dates and conditions that make the risk measurable. The natural entry point to special situations — and where our radar detects today.
Live deals are shown with your account, according to your plan.
The mechanics, step by step.
Step 1
The deal is announced: the target rises but settles below the offered price or exchange ratio.
Step 2
You buy in the market after the announcement; the discount to the consideration is the spread.
A company announces a cash tender offer at €50.00 a share. The stock trades at €48.00 and closing is expected in six months.
If the deal closes you capture the gap. If it breaks, the stock can fall back to its pre-announcement price: that is the risk you are buying.
Hypothetical figures to explain the mechanics. Not a real case and not a recommendation.
Step 3
The deal progresses: acceptances or shareholder votes, antitrust and regulatory clearances.
Step 4
At the close you receive the consideration; the annualized return depends on how long it took.
Step 5
If the deal breaks, the share falls back toward its undisturbed price: that drop is the risk the spread pays for.