Out of Illumina and More Motorola Mobility

Sometimes, merger arb plays don’t work in your favor. I folded my position in Illumina (Ticker: ILMN) today at $40.59 generating a net loss of 22.26% (including income from the covered calls). Roche basically walked away after Illumina refused to negotiate. Fortunately, I was aware of the risk and this was a relatively small position. I learned after my experience last year with Big Lots (Ticker: BIG) and Gen-Probe (Ticker: GPRO) not to go big in these special situation plays.

Motorola Mobility (Ticker: MMI) continues to look attractive here and I’ve been adding to my position. I believe there’s a good chance that MOFCOM will give their approval prior to May. We’ll see…

A Little Bit of Venoco, Inc.

I’m back in Venoco, Inc. (Ticker: VQ) at $9.91, which is in the process of a management buyout from the CEO for $12.50 in cash. This is only a small position at this point as this is a high risk merger arb play since there is no committed financing in place. I took a stab at it since the risk and reward is somewhat favorable. The Financial Times (Deal Reporter) had a little write up recently in which it stated that the CEO was in active discussions for financing for the deal.

Edit:

I sold my position today at $9.98 for a small gain...

Motorola Mobility Again

I added to my Motorola Mobility Holdings, Inc. (Ticker: MMI) position this morning at $38.94. I’m factoring a mid May closing, which will equate to a potential net gain of ~ 2.5% (annualized gain of ~ 20%) for the recently purchased shares. There’s a good chance that MOFCOM will announce a decision sooner. Hopefully it’ll be a positive decision for the Motorola Mobility shareholders.

Edit:

And a few more shares at $38.89...

Adding to Motorola Mobility

I added a few shares to my holding in Motorola Mobility Holdings, Inc. (Ticker: MMI) at $39.00 today. Right now, it’s just a waiting game for MOFCOM to make their decision. Hopefully, the extension of the second review does not go a full 60 days, but in any case I see this as a low risk trade.

Medco Health Solutions = Done Deal

It’s finally a done deal as the FTC gave the go ahead for Express Scripts (Ticker: ESRX) to complete its takeover of Medco Health Solutions (Ticker: MHS). Medco Health Solutions shareholders will receive $28.80 in cash and 0.81 shares of Express Scripts. I’ll probably hang onto the shares of Express Scripts as this merger will provide powerful synergies for the combined firm. I can see Express Scripts easily going to $60 plus with the takeover of Medco Health Solutions based on the fact that the FTC required NO divestitures from either company.