Tag Archives: ITSI

International Lottery & Totalizator Systems merger arb

International Lottery & Totalizator Systems (ITSI) announced today that it has entered a merger agreement with Berjaya, the majority shareholder of the company. The company will cash out shareholders at $1.33/share using a 9,245,317-for-1 reverse split after which Berjaya will be the only remaining shareholder. The merger seems to be more or less a done deal since it’s already approved by the majority shareholder, and apparently the vote of minority shareholders isn’t required under Delaware law.

I managed to pick up some shares at $1.15 at the start of trading, but I do think the merger arbitrage is also attractive at the current price of $1.25: it’s still possible to make a 6.4 percent absolute return. Not bad for what is probably a very low-risk deal.