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A systematic approach to risk arbitrage techniques that work in today's market
Both the growth in hedge funds and the changing nature of the merger and acquisition business have affected the process of risk arbitrage and the techniques used to participate in the business.
Risk Arbitrage, Second Edition goes to great lengths to reflect these changes with case studies on new mergers, information on new legal changes that affect merger interactions, and details about the rise of computers and trading systems, which have had a major effect on an individual's ability to compete with professionals in managing risk arbitrage portfolios.
* Completely updated to include new trends and strategies in this field
* Examines how you can apply risk arbitrage in real-world situations
* Follows in the footsteps of the first edition, which is considered to be the definitive text on risk arbitrage
* Discusses how you can effectively compute spreads and determine risk
Insightful and engaging Risk Arbitrage, Second Edition is the book you need to succeed in today's turbulent financial markets.
List of contents
About the Author xi
CHAPTER 1
Introduction 1
CHAPTER 2
What Is Risk Arbitrage? 9
CHAPTER 3
The Risk Arbitrage Industry 27
CHAPTER 4
Estimating the Return on a Risk Arbitrage Position 33
CHAPTER 5
Estimating the Risk of Arbitrage Transactions 61
CHAPTER 6
Estimating the Probability of a Transaction's Occurrence 83
CHAPTER 7
The Risk Arbitrage Decision Process 107
CHAPTER 8
Hostile Takeovers 117
CHAPTER 9
Trading Tactics 149
CHAPTER 10
Portfolio Management 173
CHAPTER 11
The Exciting World of Risk Arbitrage 201
APPENDIX A: Tender Offer Document 215
APPENDIX B: Airgas/Air Products--Text of Court Decision 281
APPENDIX C: Whole Foods Markets--Excerpts from Proxy Statement 291
APPENDIX D: Straight Path Communications--Excerpts from Proxy Statement 299
APPENDIX E: Straight Path Communications--Excerpts from STRP's 8-K Filed on April 13, 2017 329
Acknowledgments 337
Index 339
About the author
KEITH M. MOORE heads up FBN Securities Event-Driven group. Prior to joining FBN Securities, Keith served as Kellner DiLeo & Company's Co-Chief Investment Officer, Portfolio Manager of the KDC Merger Arbitrage Fund and Director of Risk Management. In addition to being the author of
Risk Arbitrage: An Investor's Guide, he has authored the Mergers & Acquisitions chapter for
Corporate Finance, published by the CFA Institute as well as a number of academic journal articles. Keith's arbitrage career spans research, trading and portfolio management at Neuberger & Berman (1975-1983 and 1989-1996), Donaldson Lufkin & Jenrette (1983-1989) and Jupiter Capital (1997-2006). A former Assistant Professor of economics and finance at St. John's University and Adjunct Professor at the University of Rhode Island and New York University, Keith has earned numerous academic awards and honors. He holds a BS and a PhD from the University of Rhode Island and an MBA from New York University.
Summary
The definitive guide to risk arbitrage, fully updated with new laws, cases, and techniques Risk Arbitrage is the definitive guide to the field and features a comprehensive overview of the theory, techniques, and tools that traders and risk managers need to be effective.
