Risk Arbitrage

APPENDIX C

Active ArbitrageInitiatives

Wyser-Pratte activist initiatives comprise two separate and distinctive styles. One style—“active arbitrage”—is described in Chapter 7. It is a corporate governance-type of activism in which the activist must overcome an entrenched management that is reluctant to accept a proposed or contemplated takeover offer to shareholders, even at a substantial premium.

The second style of activist initiative is called “pro-active” or “operational” activism. Here the activist seeks to change the strategy, blend of assets, management, capital structure, or local contrivances such as “double voting rights” for the purpose of maximizing shareholder value.

Since 1991, the author has engaged in 65 activist initiatives, both active arbitrage and pro-active activism. Appendix C delineates 23 of the former category that projects the fusion of arbitrage and activism. Each example is comprised of a graphic illustration or chart of the share price evolution of the target company with concomitant annotations marking key events during the course of each initiative. This is followed by Section II, which highlights the key financial characteristics of the company. Section III presents the chronology of events over the course of the initiative and includes the financial results of the activist initiative undertaken by Wyser-Pratte on a “ticket-in, ticket-out” basis. It also includes returns from the commencement of the activist initiative through to its completion. ...