Under the Radar's: Round-Up
This month's roundup explores event-driven opportunities that could send stocks soaring.
This month’s roundup delves into event-driven trades, where catalysts like mergers, litigation, and asset sales can unlock significant value in specific companies.
Updates on M&A
Liberty Media SiriusXM: We closed our position in Liberty SiriusXM for a 36% return in 3 months. To potentially mitigate risk, we suggested hedging the position (check out Liberty Hedging Strategies for more details). Those concerns seem to have been realized, as the discount has now narrowed considerably to 9%.
Paramount Global: Apollo recently emerged with an $11 billion offer for Paramount Studios. A 37.5% premium to Paramount’s total market cap of $8 billion. Apollo’s offer is only for Paramount studios and excludes TV networks and Paramount+. In September 2023 “PARAMOUNT’s “ASSET PLAY”, we argued that PARA could be worth $25 to $52 in a breakup of the business vs its current share price of $11. A 120% to 360% upside from today’s share price.
Tapestry/Capri Holdings: The Tapestry/Capri deal is trading at a very wide spread. If the deal closes as planned, the upside is 27% from here. The EU regulator has set a deadline for deciding whether the deal needs a phase II investigation on 15-4-2024. China has approved the deal. Take a look at Cedar Grove Capital Management’s view on the deal.
Updates on Litigation
Odyssey Marine: Long-lasting litigation saga with Mexico. Resolution is expected in 2H 24. ICSID recently informed OMEX that the final decision regarding Odyssey Marine case against the Mexican government is expected in Q2 2024.
Ambase Corp: Ambase has completed an $8.8 million equity offering at $0.20 per share. The offering is backstopped by ABCP’s CEO, which suggests optimism about the company’s litigation outcome. This private placement strengthens the alignment of incentives between the management and its minority shareholders. See an updated analysis on ABCP here: AmBase Mispriced Penthouses.
Silver Bull Resources: The company entered into a litigation funding agreement with Bench Walk. On June 28, 2023, the company commenced international arbitration proceedings against Mexico for violating company assets.
Bankruptcy Chapter 11 & 7
Yellow Corp: Currently in bankruptcy proceedings. However, Yellow asset sales could unlock hidden value for shareholders. Despite the Chapter 11 liquidation, Yellow Corp shareholders are banking on a significant payout after all debts are paid. We break down the risks associated with how this could play out for equity investors in Yellow Corp: Lemons or Lemonade?
Update on Other Special Situations
Silver Lake agrees to buy Endeavor Group in $13B deal - Press Release
SLB to buy ChampionX in an all-stock deal valued at ~$7.8B - Press Release
Nuvei confirms $34 a share sale to PE firm Advent International- Press release
US Steel dips amid report Senators concerned over Nippon Steel ties to China - FT
General Electric completed its split into three public companies yesterday. GE Vernova, the energy spinoff, began trading on the New York Stock Exchange using the ticker symbol “GEV.”
Disclaimer:
The information and opinions expressed on this blog are for informational and educational purposes only and should not be construed as financial advice, investment recommendations, or solicitations to buy or sell any securities.
I went in on ABCP in Feb, seeing some nice gains :)
Still possible to see major gains?
Great update! look forward to seeing how these progress