Back in RDA Microelectronics
I’ve started nibbling back into RDA Microelectronics (Ticker: RDA) (picked some up today at $17.67), which is being acquired by Tsinghua Unigroup for $18.50 in cash ($18.45 if you factor in the $0.05 ADR fee). This deal was announced in November 2013 and has dragged on quite a bit. I believe we’re approaching a more favorable risk reward time for this merger arb play. PDST originally made a bid for the company, but Tsinghua came in at the last minute and offered a more compelling price. PDST went through the formal channels by obtaining the “road pass”, which allowed PDST to make a bid for RDA Microelectronics. When Tsinghua Unigroup made the counter bid, they did not obtain a “road pass”. The Chinese regulators have held up the approval because of this issue. PDST original road pass was obtained on 11/05/13 and is valid for 6 months. The 6 months is coming up (05/05/14) and at that point Tsinghua Unigroup can formally apply for the “road pass” since only one “road pass” can be granted at a time. The regulatory approval for out bound deals has also been relaxed (no "road pass" required) starting in May 2014 for deals under $1 billion, which applies to this transaction so we should be hearing soon on the status.