Exited the American Farmland merger arb

Today I sold the remaining piece of my stake in American Farmland. I had already sold the majority of my stake last year since the spread quickly collapsed after I entered the trade. It started with a juicy 13.2% spread while now just 2.6% is remaining. Since I was only long American Farmland without a corresponding short position in Farmland Partners I didn’t capture the whole shrinkage of the spread. I bought American Farmland at $7.45 and sold my last shares today at $7.98 for a 8.0% return (taking into account a $0.0625/share dividend). If this would be a cash deal I would have tried to capture the last remaining percentage points since this deal will probably close very soon, but since I’m not that thrilled to own Farmland Partners I’m happy to leave a little bit of money on the table.

Disclosure

No position in AFCO or FPI

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