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nnayyar

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About nnayyar

  • Birthday 08/16/1980

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  1. The RDA deal suddenly got very hairy after a dealreporter article citing 'sources' saying NDRC approval might not be given. I have some updated thoughts but I think at current prices it looks like a very attractive risk/reward situation: valuecaptrader.wordpress.com
  2. SPRD deal closed. A similar transaction is taking place in RDA - being bot by the same acquirer. It traded 17.75 and has an 18.50 cash offer. Only PRC approval is needed however there has been some delay. Similar to SPRD it seems timing is uncertain but it is high probability to close IMHO.
  3. Deal closed at price. Wild one! If anyone else does riskarb would love to discuss CTB situation! http://finance.yahoo.com/news/funds-advised-apax-partners-complete-170000765.html
  4. $RUE is giving you 0.70 at 96% odds right now. 1.7% gross and 45% annualized. Solvency agreement is left which is provided by CFO of Rue21. DR had an article that the deal would close no later then the 19th of this month.
  5. Although this article seems to be the opposite, I've wondered for a while about how good gamers would be at value investing. Take Diablo 3 for example, where there is an auction house. There are lots of "flippers" who go and buy items that are far too cheap for their worth, and then immediately put it up for sale at the "rational" price. In fact, most of them are far better at doing this than I am, which is pretty annoying. It is amazing how hard it is to deal with an opaque and relatively more inefficient market, found in games. Sometimes I feel like telling the gamers they could do the same thing with companies, but then, why introduce more competition? Can you give an example? How does one know an object in Diablo 3 is "far too cheap"? Very interesting.
  6. Well this deal got hairy in a hurry, after releasing further declines in SSS the spread jumped to over 6%+. Dealbook had an interesting article (ahem hit job) today: http://dealbook.nytimes.com/2013/09/30/how-the-deal-for-rue21-could-fall-apart/?_r=0 The article has a negative bias but it's always good to understand the opposite view. I disagree in the following way: 1) APAX stands to lose much more then the $68MM termination fee. APAX/SKM currently own 30% of the equity in RUE which is likely close to completion, i.e. the point of time where a PE fund winds down and performance fees are calculated. If the deal was to break SKM/APAX is set to lose 7MM shares or around 70-100MM in value (and any associated performance fees) 2) Each example given by the author of a broken deal occurred in 2008. Right before Lehman brothers collapsed. Um...exactly a great time for the banks. I should point out that the author does make a very good point on the insolvency clause. But i think the author was looking for fodder to pitch points made in his book. Though to be honest, I am obviously talking my book as well.
  7. Sorry for the slightly sloppy post but RUE is offering 2.8% gross and likely 15% annualized. Closing is expected in early October. The spread is due to risk of financing, 800MM between 3 banks that had trouble on initial marketing but is now being re-marketed with higher incentive fees, close to 68MM: http://uk.finance.yahoo.com/news/bankers-market-struggling-rue21-buyout-133734995.html If the financing can't be placed, the banks have take down the debt. Now 800MM split between 3 banks is around 300MM each, which doesn't sound like a completely unreasonable sum to me? But more importantly, changing of the terms and increasing incentive fee, i have a feeling they will be more persuasive in placing it. Initially there were fears of declining business at RUE21 however the company has identified this before the deal was announced and expect improvement into holiday season. The buyers, APAX also seem to agree as they voted for the $42 deal as is without alterations. Not to mention they are opening a new PE fund and need deals to start charging fees!! I probably missed some facts but feel free to ask questions, i wanted to get this out and this represents one of the most attractive and quickest deals out there...
  8. I'll throw in some others: efinancialcareers.com leverageloan.com
  9. Posted on blog but i thought might be of interest here as well, the links work on blog posting: valuecaptrader.wordpress.com Short and quick writeup on a definitive merger, SPRD is semi-conductor company in Shanghai that is being acquired by a Tsinghua Holdings for $31.00 cash per ADR. The current deal offers the following terms: Completely and Privately funded by Tsinghua Holdings, therefore no financing condition. 75MM termination fee (4% of the 1.78B offer) MAC clause Shareholder Approval required PRC government approvals required The economics of the deal based on a $30.30 last price are as follows: 2.3% gross yield, 6.59% annualized based on 90 day closing * Market implied 94% probabiltiy * As the shareholders voted in favor of the deal as of September 9th, the final hurdle to closing is PRC approval, which could happen much earlier then 90 days. At 30 days, the annualized return shoots up to 28%! One potential reason for a quick closing is shareholder resentment of a low ball offer, with a company growing aggressively some shareholders were disappointed by the purchase price. At this point the valuation is probably mute as shareholders, controlled by the CEO and Board, have already voted in favor. As of now it is just PRC approval, here is the relevant information from the proxy: “Required Approvals” means certain overseas investment approvals, including the approvals of or filings with, as applicable, (i) the National Development and Reform Commission of the PRC or its competent local counterparts and Ministry of Commerce of the PRC or its competent local counterparts with respect to the consummation of the Merger, (ii) the Ministry of Education and/or the Ministry of Finance of the PRC with respect to the consummation of the Merger (if applicable) and (iii) the State Administration of Foreign Exchange of the PRC or its competent local counterparts in connection with the consummation of the Merger, including approvals for conversion of RMB funds into U.S. dollar funds and transfer of U.S. dollar funds to Merger Sub or the holders of Shares or ADSs or other interests pursuant to or in connection with the Merger Agreement and the guarantee from Tsinghua Holdings in which Tsinghua Holdings committed to guarantee the funding of Parent in order to enable Parent to fulfill its obligations under the Merger Agreement (to the extent that funding in U.S. dollars is required thereunder), and, if necessary, clearance under the PRC Anti-Monopoly Law approving the Merger. The rest of the proxy is here. Also since PRC is the biggest risk, it should be noted that Tsinghau is also a state owned enterprise! I find the current spread somewhat surprising despite being a Chinese takeover, because it is hard to see the risk, comments definitely appreciated!
  10. FNB has opened a HQ location in Baltimore, expected move in before end of 2013! http://finance.yahoo.com/news/f-n-b-corp-establishes-123855263.html Just a question of timing now...
  11. New York City. Anyone passing through or living here please feel free to reach out to grab a drink!
  12. Just listened to FNB call, the company has stated that they are hiring people in Maryland and Baltimore which is a good sign. Sounds like leadership and some IT solutions in place. Management seemed to be impressed with the caliber of talent, mentioning it a few times. Still no word on exactly on timing of proxy etc. I am embarrassed to miss this, I had an error on my excel spreadsheet, but better to catch it now then later; FNB pays a 0.12 dividend quarterly, so if we think 6 months, this reduces the spread by 0.24. This reduces gross to 5.7% and ~10% annualized. Keep in mind i include 0.31 in margin expense (2.5% borrow rate since using leverage) so adjust your return assumption accordingly. Rookie mistake!
  13. Wellmont, Thanks for the follow. Send me a message or DM if you like? Constructive, I did some quick work on the two arbs you mentioned and they both like high probability. MFLR is about 32MM so might be even too small for my account. VCBI is very intriguing, they are located about an hour away from Baltimore in VA, basically a DC suburb. BTW, DC and its suburbs are now one of the richest places in America (government contracting pays well!) VCBI - Going through the filings, I can't seem to find the date of the Shareholder meeting to vote on the merger. I see they had a meeting in April the merger was not on the proxy. And as of last quarter report, they company is still aiming for Q3 close. Which leaves ~2 months to file the proxy, amend, vote, and close. Any thoughts on the timeline? I think the biggest risk to BCSB is delay in timeline. Also, on a small note, the spread on both legs of VCBI is pretty wide when I checked, 0.10 and not a lot of posted liquidity. My strategy in BCSB was to post a bid for some notional size (500 or 1,000) when hit, quickly hit the bid on FNB for correct ratio as FNB traded at tight spread and ample liquidity for small chunks. Unfortunately our front end does not have spread trading orders but that's another story. Thanks for pointing these out, would have probably missed it.
  14. Hi wellmont, I'm actually trying to figure out a 'social media strategy' so to speak. I've gotten some great ideas and met very smart people via twitter and blog. I post under @largecaptrader1 on twitter. As for the blog, I actually don't know how to subscribe via RSS but it's something I'll have to look into! I believe on wordpress sites there is a 'follow' button which should alert you on any new post.
  15. I tend to look at some of the 'hairy' deals such as NXY and DELL but if I'm always open to them. I don't like to tie up too much capital unless there is a decent spread and I understand the risks. The MFLR deal looks a little bit small, 1/2 the size of BCBS. The VCBI looks far more interesting and in an article i skimmed it looked like they already laid off some people due to the merger so another high probability one. Let me dig into this and read the documents, thanks for pointing it out as well as the link! I'm glad i posted now lol. Perhaps we should start a new thread with interesting risk arb spreads?
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