Merger Masters: Tales of Arbitrage

479 Pages·2018·3.27 MB·English

by  Kate Welling

Merger Masters

Columbia University Press Publishers Since 1893
New York Chichester, West Sussex cup.columbia.edu
Copyright © 2018 Kate Welling and Mario Gabelli All rights reserved E-ISBN 978-0-23154891-5
Library of Congress Cataloging-in-Publication Data Names: Welling, Kate, author. | Gabelli, Mario,
author.
Title: Merger masters : tales of arbitrage / Kate Welling and Mario Gabelli.
Description: New York : Columbia University Press, [2018] | Includes index.
Identifiers: LCCN 2018022551 (print) | LCCN 2018025255 (e-book) | ISBN 9780231548915 (e-
book) | ISBN 9780231190428 (hardback : alk. paper) Subjects: LCSH: Arbitrage—Case studies. |
Consolidation and merger of corporations—Case studies. | Investments—Case studies.
Classification: LCC HG4521 (e-book) | LCC HG4521 .W38765 2018 (print) | DDC 338.8/30922—
dc23
LC record available at https://lccn.loc.gov/2018022551
A Columbia University Press E-book.
CUP would be pleased to hear about your reading experience with this e-book at cup-
[email protected].
Cover design: Noah Arlow
Contents
Acknowledgments
Abbreviations and Wall Street Terms
Introduction—Why This Book? by Mario J. Gabelli
Part I: The Arbs’ Perspectives
CHAPTER ONE
Guy Wyser-Pratte
CHAPTER TWO
Jeffrey Tarr
CHAPTER THREE
Martin Gruss
CHAPTER FOUR
Paul Singer
CHAPTER FIVE
Michael Price
CHAPTER SIX
Peter Schoenfeld
CHAPTER SEVEN
John Paulson
CHAPTER EIGHT
Paul Gould
CHAPTER NINE
George Kellner
CHAPTER TEN
Roy Behren and Michael Shannon
CHAPTER ELEVEN
Karen Finerman
CHAPTER TWELVE
John Bader
CHAPTER THIRTEEN
Clint Carlson
CHAPTER FOURTEEN
James Dinan
CHAPTER FIFTEEN
Drew Figdor
CHAPTER SIXTEEN
Jamie Zimmerman
CHAPTER SEVENTEEN
Keith Moore
Part II: The View from the Other Side—The CEOs
CHAPTER EIGHTEEN
William Stiritz
CHAPTER NINETEEN
Paul Montrone
CHAPTER TWENTY
Peter McCausland
Appendix I: Risk Arbitrage Decision Tree
Appendix II: Deals
Appendix III: A Note on Methods
Index
Acknowledgments
KATE WELLING
THE IMPETUS AND inspiration for this book were all Mario J. Gabelli.
The concept is Mario’s, he convinced me to write it, and he made sure
that the not-inconsiderable resources of GAMCO Investors were behind
my efforts. For the experience, I’m forever in Mario’s debt. The principles
of value investing are well known today, in large part because Warren
Buffett’s monumental success has emblazoned them in the zeitgeist.
Think of this volume, as I do, as my old friend Mario’s way of highlighting
the principles and practices of the other crucial arrow in his investment
quiver, merger arbitrage, which has allowed him to translate Wall Street’s
addiction to deals, deals, and more deals into low-risk, consistent, and
non-market-correlated compound returns for clients. The how, once
shrouded in mystery, is today both accessible and pretty much infinitely
adaptable, as these profiles illustrate. Opportunities are multiplying, even
as I write.
This volume would not have been possible, what’s more, without the
generous cooperation of the arbitrageurs and industrialists profiled. All
extraordinary—and extraordinarily different—individuals, they took the
time necessary to school me in their own perspectives on deal investing,
and I thank them.
I also owe very special thanks to Regina Pitaro, for demystifying risk
arbitrage; and to Paolo Vicinelli, Ralph Rocco, Willis Brucker, and the
Gabelli merger-arb team for constant and congenial support. Also to
Christopher P. Bloomstran, a great friend and better value investor, for
constructive commentary on the manuscript.
If I know anything about the craft of financial journalism or the art of
writing, it’s to the credit of my mentor—columnist and editor—the
incomparable Alan Abelson. Any mistakes are my own.
Finally, without the unwavering love and support of my husband of the
past forty years, Don Boyle, and our sons, Brian and Tom, I doubt I’d
have penned a word.