Wednesday, November 19, 2008

Anheuser Busch = Done Deal, Next...

I’m glad that Anheuser Busch closed so soon and seeing the cash in my account today. This market is steam rolling everyone in its path. I’ll just continue to do what has been working for me and that is focusing on risk arb plays. Today I picked up some more Puget Energy (Ticker: PSD) at $26.89, which is being acquired by Macquarie Infrastructure Partners for $30 per share in cash. The fact that this stock ended up today says a lot. I’m starting to feel more and more confident in this merger. It’s waiting for one more approval from Washington Utilities and Transportation Commission. Here’s a quote from a recent press release:

“All federal regulatory and shareholder approvals required for the merger have been obtained. Puget Holdings has committed equity and debt financing in place to complete the merger and to provide significant capital for PSE's future needs.”

I also picked up some shares of SI International (Ticker: SINT) at $30.84, which I sold earlier. This should receive the CFIUS approval in early December and hopefully close right after. Serco is acquiring this company for $32 per share in cash.

Monday, November 17, 2008

Follow The Leader

It’s follow the whale time… This is when the hedge funds file with the SEC to report their largest holdings. One of the hedge fund managers I like to track is John Paulson of Paulson and Co. He does a lot of risk arb and is one of the very best in the biz. I just checked out his holdings in the 13F filing and here they are:

Affiliated Computer Svcs, Anheuser Busch Cos, Applied Biosystems Inc, Barr Pharmaceuticals Inc, BCE Inc, Boston Scientific Corp, Brocade Communications, Cheniere Energy Inc, DR Pepper Snapple Group, Equity Media Hldgs Corp, Equity Media Hldgs Corp, Genentech Inc, Hercules Inc, Kinross Gold Corp, Macrovision Solutions, Merrill Lynch & Co Inc, Mirant Corp, NRG Energy Inc, Philip Morris Intl Inc,
Rohm & Haas Co, Time Warner Cable Inc, Tronox Inc and Wrigley WM JR Co.

Of course, you cannot blindly buy what’s in his portfolio, but this is just a good starting point.

Friday, November 14, 2008

Getting Close With Anheuser Busch

We’re almost at the finish line with the closing of the Anheuser Busch (Ticker: BUD) merger with InBev. A lot of news reports are predicting a close next week. Today, the Justice Department gave their blessing to the merger pending a small divestiture of Labat. This was the last piece of the puzzle in closing this deal. The banks are all set in funding the deal next week. So hopefully, we’ll see the cash by the end of next week!

I also picked up a few shares of Puget Energy Holding (Ticker: PSD) at $25.09, which is being acquired by Macquarie Infrastructure Partners for $30 in cash. The company is waiting for the regulatory approval from Washington State. Speculation is that this approval is imminent so we’ll see soon. Once the approval is granted, the deal should close in two weeks. Obviously, there’s some risk here based on the wide spread.

Friday, November 07, 2008

More BUD

I closed out my arb play on SI International (Ticker: SINT) today at $30.48 generating a gain of 6.23% over a 7 day period. This is a very solid deal with a buyout price of $32, but I saw more rewards in Anheuser Busch (Ticker: BUD). I picked up more Anheuser Busch at $65.25 with a potential gain of 7.27% when it closes by the end of the year. Some arbs even believe this deal can close next week if they receive the regulatory approvals shortly.

The arb plays are getting more and more dangerous. I just dodged a bullet with I2 Technologies (Ticker: ITWO). I was fortunate to get out of this one before JDA (Ticker: JDAS) decided to renegotiate the buyout price. I learned my lesson with Foundry Networks and wasn’t going to take that kind of risk again.