5 Merger Arbitrage Opportunities in 2023

1. Microsoft Corp (NASDAQ:MSFT)’s $69B Acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI)

Consideration: $95 a share
Spread: 5.5%
Main Risk: Regulatory approval

Microsoft Corp (NASDAQ:MSFT) has inched closer to completing its proposed $69 billion acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI). Judge Jacqueline Scott Corley, at the U.S. District Court, has ruled in favour of the deal even as the FTC insists that the deal is anti-competitive. The regulator is worried that the Xbox maker might make some of Activision Blizzard’s Games, including Call of Duty, only available on its game consoles.

With Activision Blizzard, Inc. (NASDAQ:ATVI) trading for about $90 a share, there is tremendous value to unlock in arbitrage trading, given that Microsoft Corp (NASDAQ:MSFT) is offering $95 a share on its $69B deal. The $5 arbitrage spread translates to the prospect of making about 5.5% if the deal was to close at current levels.

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get  the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on Larry Robbins’ Net Worth, Performance and Portfolio and Billionaire Investor Who Returned 51% in 2022 is Selling These 12 Stocks in 2023.