Takeover arbitrage: watch the conditions

I love a good takeover arbitrage situation. If you have some spare cash, buying stock in companies that have agreed to be acquired can generate much better returns than leaving your money in the bank. Provided you get your probabilities right, of course. Over the years, Intelligent Investor has recommended a number of takeover arbitrage situations in the Ideas Lab. So far they have worked out pretty well. A few have been minor disappointments but some have been very successful—the Centrebet takeover in particular springs to mind. And yes, I am aware of the expression ‘picking up pennies in front...

I love a good takeover arbitrage situation. If you have some spare cash, buying stock in companies that have agreed to be acquired can generate much better returns than leaving your money in the bank. Provided you get your probabilities right, of course.

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