Merger-Arbitrage Funds See Tide Turning After FTC’s Microsoft-Activision Loss
- Traders emboldened to bet against Lina Khan’s antitrust agenda
- Spreads on some big pending deals have narrowed this week
The US Federal Trade Commission headquarters in Washington, DC.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
Merger-arbitrage investors say the tide is turning in their favor after the Biden administration’s antitrust push suffered a huge legal blow this week, boosting the funds’ returns and emboldening bets on deals in regulators’ crosshairs.
After one of the roughest stretches of performance in several years, this corner of Wall Street got a major shot in the arm Tuesday when a US court ruled that Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. could proceed despite objections from the Federal Trade Commission. The agency has been pursuing an aggressive trust-busting agenda under Chair Lina Khan.