Table of Contents

About the Author xi

CHAPTER 1

Introduction 1

CHAPTER 2

What Is Risk Arbitrage? 9

CHAPTER 3

The Risk Arbitrage Industry 27

CHAPTER 4

Estimating the Return on a Risk Arbitrage Position 33

CHAPTER 5

Estimating the Risk of Arbitrage Transactions 61

CHAPTER 6

Estimating the Probability of a Transaction’s Occurrence 83

CHAPTER 7

The Risk Arbitrage Decision Process 107

CHAPTER 8

Hostile Takeovers 117

CHAPTER 9

Trading Tactics 149

CHAPTER 10

Portfolio Management 173

CHAPTER 11

The Exciting World of Risk Arbitrage 201

APPENDIX A: Tender Offer Document 215

APPENDIX B: Airgas/Air Products—Text of Court Decision 281

APPENDIX C: Whole Foods Markets—Excerpts from Proxy Statement 291

APPENDIX D: Straight Path Communications—Excerpts from Proxy Statement 299

APPENDIX E: Straight Path Communications—Excerpts from STRP’s 8-K Filed on April 13, 2017 329

Acknowledgments 337

Index 339

About the Author

KEITH M. MOORE heads up FBN Securities Event-Driven group. Prior to joining FBN Securities, Keith served as Kellner DiLeo & Company's Co-Chief Investment Officer, Portfolio Manager of the KDC Merger Arbitrage Fund and Director of Risk Management. In addition to being the author of Risk Arbitrage: An Investor's Guide, he has authored the Mergers & Acquisitions chapter for Corporate Finance, published by the CFA Institute as well as a number of academic journal articles. Keith's arbitrage career spans research, trading and portfolio management at Neuberger & Berman (1975-1983 and 1989-1996), Donaldson Lufkin & Jenrette (1983-1989) and Jupiter Capital (1997-2006). A former Assistant Professor of economics and finance at St. John's University and Adjunct Professor at the University of Rhode Island and New York University, Keith has earned numerous academic awards and honors. He holds a BS and a PhD from the University of Rhode Island and an MBA from New York University.