Thursday, August 20, 2015

Tendered Receptos

I tendered all my shares in Receptos (Ticker: RCPT) and looking for this deal to be completed next week. I will likely let the short Put positions in Receptos expire in September as well. This was a really nice risk / reward opportunity and hoping to see another one like this soon.

I did initiate a starter position (~ 4.5% position) in WuXi Pharmatech (Ticker: WX) at $43.60. They primarily perform outsourced R&D projects for pharma / biotech companies. This company is being acquired for $46.00 in cash via a management / consortium of private equity investors. This is a Chinese based company so I expect a China discount. I see this as a reasonable risk / reward opportunity assuming this deal is closes by the end of the year. This is definitely not one of those all in plays, but I can see myself going up to a 10% position at some point. 

My merger arb positions have really dried up… Just being patient and let the next opportunity present itself.

On a side note: I unfortunately did get a few IPO shares in Amplify Snack Brands (Ticker: BETR) at $18.00 per share. I was expecting a pop up and not a pop down! Anyways, it was a little lesson not to get too greedy. Fortunately, this was a tiny / negligible position. So no damage, but still I don’t like losses…

EDIT: I added to my holding in WuXi Pharmatech amid the market weakness (currently ~ 11% position).


At August 21, 2015, Anonymous Anonymous said...

Is today the last day of trading for $RCPT?

At August 21, 2015, Anonymous Anonymous said...

I'm afraid of chinese play.

About RCPS expire monday the tender, do you think from tuesday will be already deleted or we can see quotes till few days like wednesday/thursday?

Interesting sector BETR, but I see in their website just popcorns? do they have diversified products?

At August 21, 2015, Blogger Money Turtle said...

I expect the last trading day for Receptos to be Monday, 8/24. Assuming everything goes as expected, the shares will be delisted the following day. If you have not tendered, I would do it immediately as it may delay the cash hitting your account.

At August 21, 2015, Anonymous Anonymous said...

My broker charges about $40 dollars for corporate action/tendering shares. not worth the money.
u pay the same?

At August 21, 2015, Blogger Money Turtle said...

My broker does not charge for participating in a tender offer.

At August 25, 2015, Anonymous Anonymous said...

Ok we finished with RCPT all good. Few money for us, you was smart.

What do you think of PCP Precision Carterparts / Berkshire deal?

There is pressure now and yeld is up...

now with market sell off I see few risks that shareholders are not so happy of the 235$ offer of Berkshire... they could pretende more.. before market collapse and probably long term bearish trend now.

So now, if they vot for NO, very few chance, they will get their shares to very low level seen the market bearishness.

So I think everybody will be smart and make the deal with berkshire.
Most of the shareolders can just take more cash.. with market collapsing and invest it in some other business with same growth. There isn't? I don't thing, and even if not, they should realize that market is collpsing.

So they can't just sell shares and says no thank you....because never happened with Berkshire deals.

What's your view on PCP / Berkshire? Ok volatility is scaring now on the market, but I bet on this one, since Altera was really scaring, this should be a deal approved by November 12 for what I read, so could be fast, around 2 months and half max.

At August 25, 2015, Blogger Money Turtle said...

The PCP deal with Berkshire is a very safe deal, but the spread is just too narrow for me at this point. You are looking at a Q1, 2016 close, which works out to a net gain of 2.88% including dividend (annualized return of only ~ 4.65%). I haven’t looked at the options, but those will probably give a better return depending how you play it.

At August 26, 2015, Anonymous Anonymous said...

Ok at least you consider it safe. You know, it's my unique deal now, and I won't put hands in other deal safe with this market collapsing I will be subject till the close to other panic sellings, on my view.

But for what I read in SeekingAlpha, the vote of shareolders should be 12 november, and the close could happen few days later, so I think that will be a surprise and will close before of Q1 2016. Can you investigate? like this could be more interesting for you also.

And HSR estimate is before end of september.

Let me know, thanks.

At August 26, 2015, Anonymous Anonymous said...

here, let me know, says 12 november, and could close before end of november so.

At August 26, 2015, Blogger Money Turtle said...

The company is guiding for a Q1, 2016 close from their press release and presentations. I believe the company may be factoring in an extended review by US regulators and I believe it also needs to file for anti-trust approval in other countries, which could push the closing to Q1. It's possible that this deal may close by year end.

At August 26, 2015, Anonymous Anonymous said...

Ok, by the way, apart WX the chinese deal where you are in, which is your list you monitor, I mean, PCP could be one of the quality deal at the moment, or you see some deal better? for the yeld and quality of buyer and PCP itself, i see this the unique play right now.
If even close in 5 months or 6 for me it's ok I will trade it more intraday and it's good, even better, but I wouldn't get heart attack with flash crashes intraday or market falling, just that.

At August 26, 2015, Anonymous Anonymous said...

When will WX close? Will it be delayed because of China meltdown? Thank You.

At August 27, 2015, Blogger Money Turtle said...

My only arb play right now is WuXi Pharmatech, which is ~ 15% position. WX is anticipated to close in Q4 and I don’t see any delays in this deal closing. The company has pretty good fundamentals and does a good amount of biz in the US. The company has committed equity and debt commitment from two major banks (Shanghai Pudong Development Bank and Ping An Bank).


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