At the end of September I wrote about Fortune Industries (PINK:FDVF) as a simple low-risk merger that should be completed at the end of November or the beginning of December. The deal was completed even a bit faster than expected, and today after the market close the cash hit my account. I bought the stock at $0.5572/share in September and received $0.586/share today which represents a return of 5.2% (more than 40% annualized). This is the kind of merger arbitrage I wish there were more of: simple, low-risk, fast and with a nice spread. Perhaps it could even be that a deal like this is better than for example Kahala or Glacier Water.
Author no longer has a position in Fortune Industries
So this was the real best deal of the year!
Thank you for the idea. It was almost a perfect deal. The almost part is due to the low liquidity – it was not easy to buy the shares and I got fewer than I wanted. Apart from simple, low-risk, fast, and with a nice spread, I would add decent liquidity to the wish list – just in case Santa Claus will be reading this :).
True, higher liquidity would have been even more perfect. Then again, the low liquidity is probably the only reason why this deal was so good in the first place.