Merger Masters: Tales of Arbitrage

by Kate Welling, Mario Gabelli

Overview

Merger Masters presents revealing profiles of monumentally successful merger investors based on exclusive interviews with some of the greatest minds to practice the art of arbitrage. Michael Price, John Paulson, Paul Singer, and others offer practical perspectives on how their backgrounds in the risk-conscious world of merger arbitrage helped them make their biggest deals. They share their insights on the discipline that underlies their fortunes, whether they practice the “plain vanilla” strategy of announced deals, the aggressive strategy of activist investment, or any strategy in between on the risk spectrum.

Merger Masters delves into the human side of risk arbitrage, exploring how top practitioners deal with the behavioral aspects of generating consistent profits from risk arbitrage. The book also includes perspectives from the other side of the mergers and acquisitions divide in the form of interviews with a trio of iconic CEOs: Bill Stiritz, Peter McCausland, and Paul Montrone. All three took advantage of M&A opportunities to help build long-term returns but often found themselves at odds with the short-term focus of Wall Street and merger investors. Told in lively, accessible prose, with bonus facts and figures for transaction junkies, Merger Masters is an incomparable set of stories with plenty of unfiltered lessons from the best managers of our time.

Product Details

ISBN-13:	9780231190428
Publisher:	Columbia University Press
Publication date:	11/06/2018
Series:	Heilbrunn Center for Graham & Dodd Investing Series
Pages:	408
Sales rank:	370,878
Product dimensions:	6.20(w) x 8.90(h) x 1.40(d)

About the Author

Kate Welling is the editor and publisher of Welling on Wall St., an independent financial journal. A well-known financial journalist, she was managing editor of Barron’s.

Mario Gabelli is the chairman and chief executive officer of GAMCO Investors, Inc. A merger master in his own right, he is one of the country’s leading money managers and investors.

Table of Contents

Acknowledgments ix

Abbreviations and Wall Street Terms xi

Introduction-Why This Book? Mario J. Gabelli 1

Part I The Arbs' Perspectives

Chapter 1 Guy Wyser-Pratte 19

Chapter 2 Jeffrey Tarr 37

Chapter 3 Martin Gruss 49

Chapter 4 Paul Singer 58

Chapter 5 Michael Price 74

Chapter 6 Peter Schoenfeld 89

Chapter 7 John Paulson 99

Chapter 8 Paul Gould 109

Chapter 9 George Kellner 116

Chapter 10 Roy Behren and Michael Shannon 127

Chapter 11 Karen Finerman 141

Chapter 12 John Bader 152

Chapter 13 Clint Carlson 164

Chapter 14 James Dinan 178

Chapter 15 Drew Figdor 190

Chapter 16 Jamie Zimmerman 202

Chapter 17 Keith Moore 217

Part II The View from the Other Side-The CEOs

Chapter 18 William Stiritz 231

Chapter 19 Paul Montrone 253

Chapter 20 Peter McCausland 272

Appendix I Risk Arbitrage Decision Tree 297

Appendix II Deals 301

Appendix III A Note on Methods 369

Index 373

Editorial Reviews

09/10/2018
This insular presentation from Welling, the publisher of the financial journal Welling on Wall St., and Gabelli, the CEO of Gamco Investors Inc., consists of a hyperfocused roundup of top merger investors. As the authors explain, arbitrage investors take the name for their field from the French, eschewing the English equivalent “scalpers”; they work in mediated mergers, trading securities involved in announced corporate events in order to manage the trader’s risk, should the event—which could be a merger, or a reorganization—fall through. This ensemble-cast portrait of both traders (“arbs”) and CEOs offers a glimpse into the backgrounds of successful financiers, including their career paths, successes, and failures. The authors have crafted profiles for such luminaries as Paul Singer, Jeffrey Tarr, and Guy Wyser-Pratte. Though the subjects’ experiences vary, one thing unites them: all 21 are white (and 19 are men). The authors missed a crucial opportunity to broaden the image of who a trader is, and the result is a disappointingly familiar dog-and-pony show of the 1%. (Nov.)

Publishers Weekly

Merger Masters is a rare combination of fascinating stories about legendary deal makers and battle-seasoned techniques for deal making. Reading the interviews will provide important lessons and invaluable, time-tested investment insights. There is no one better to draw out the lessons than Kate Welling and Mario Gabelli.

Paul Johnson

In this engrossing book, Welling and Gabelli explore the thinking of the mavens who arbitrage the big deals on Wall Street. Risk arb turns out to be an extreme form of value investing, with more precise valuation and risk selection, overlaid with game theory. A must-read for professionals.

Joel Tillinghast

Kate Welling, in her inimitable manner, has captured the individuals, articulated their talents and accomplishments, bringing her lifetime skills as a superb financial journalist to the task.

Louise Yamada

Raises the curtain on arbitrage strategy by profiling leading practitioners.

Regulation

Not the typical account of specific corporate combinations found in most books on merger. [The authors] look at corporate deals and risk arbitrage through the eyes of some of the most accomplished individual participants in this field.

Choice - F. A. Marino

The authors bring together into one publication excellent insight from the masters in the art of merger arbitrage. A strategy designed to yield the practitioner excellent profits. A very worthwhile read.

Leon G. Cooperman

I highly recommend this fascinating look into the world of risk arbitrageurs. Wall Street veterans Kate Welling and Mario Gabelli provide keen insights into a part of the investment business that has long been seen as mysterious. They skillfully pull back the curtain on the industry by talking to players on both sides—the “arbs” and the corporate managers, all of whom have interesting and valuable stories to tell. For anyone interested in learning about merger arbitrage from the key players, this is the book to read!

A. Gary Shilling

The authors bring together into one publication excellent insight from the masters in the art of merger arbitrage. A strategy designed to yield the practitioner excellent profits. A very worthwhile read.

Leon G. Cooperman Founder