For Two Huge Deals, Arbitrage Goes Out the Window
Traders face a conundrum when it comes to acquisitions by T-Mobile and Bristol-Myers Squibb.
Short-selling suddenly doesn't look so good.
Photographers: Alex Kraus/Bloomberg (T-Mobile); Drew Angerer/Getty Images (Bristol-Myers)
T-Mobile US Inc., the wireless carrier, and drugmaker Bristol-Myers Squibb Co. have something in common: Investors are more interested in them than the companies they’re trying to acquire. That’s unusual as far as M&A goes and creates a conundrum for traders who bet on deals.
T-Mobile is awaiting regulatory approval for its controversial $59 billion takeover of smaller rival Sprint Corp. to grab hold of its wireless spectrum and millions of customers. Bristol-Myers agreed last month to buy Celgene Corp. for about $88 billion to gain a blood-cancer treatment and other drugs in development. (Both totals include net debt.) They’re two of the largest and most closely watched transactions of the year, and if completed will create ripple effects throughout their respective industries.