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Good points, Rob. There's no guarantee that this happens, and their public announcement is also a trial balloon to see how investors respond, I suspect.

And bonus points for referencing the Simpsons when it was good.

Awesome to hear that you liked Merger Masters. I love good investing war stories. I'm reading Barbarians at the Gate now, which is the story of the KKR takeover of RJR Nabisco. The first 60 pages were slow going, but it's picked up now. That takeover was iconic of the "corporate raider" moment of the 1980s. Now all the dollar amounts they're discussing just seem kinda small. Ha.

Jim
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Thanks, Rob. You know I like these situations where it looks like we're getting a business for free or even at a negative value. And with MTCH trading publicly, you can lock in the value of that stub. This looks pretty compelling, I think. They're floating a balloon publicly to gauge investor reaction, I reckon.

Jim
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Jim,
Of the options described - which do you prefer?
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Sorry, which options?

I think the pair trade with IAC and MTCH and ANGI looks pretty compelling if they're going to simply distribute the whole lot of shares to investors in a tax-free transaction. With IAC trading below the combined value of these two large holdings, it looks like investors are getting the stub IAC for less than free, aren't they?

I would say no one is buying IAC for its various other non-MTCH, non-IAC holdings, so there's a stub there that no one wants but that should have real value.

BTW, Rob made a nice call on the IAA/KAR spinoff. It's performed very nicely since the spin. And if you managed to buy in late 2018, you were getting a business for free at those knockdown prices.

It looks like you're getting stub IAC for better than free, and there's a way to create that now by going short MTCH and ANGI.

Jim
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·IAC disclosed its intention to explore the possibility of a distribution of its interests in Match Group and ANGI Homeservices to its shareholders.

(From the 8-K paired with the earnings release. https://www.sec.gov/Archives/edgar/data/891103/0001104659190... )

We might be early? The wishy-washiness of the bolded text reminds me of Bart Simpson: "I can’t promise I’ll try, but I’ll try to try." (Season 8, "The Canine Mutiny")

I've setup an RSS feed for filings by/on IAC at the SEC, so I hope to stay on top of this situation.

-Another Rob

(long IAC right now, the least risky choice available right now)

Also, I know Jim mentioned this book awhile back, Merger Masters: Tales of Arbitrage, and I want to say it's an excellent read! Although, it provides mostly historical anecdotes to merger arbitrage, those anecdotes show a lot about how they view risk, how they've learned to contain risk, etc.

First observation: Seems like "half of them" worked with (or talked to) Ivan Boesky in some form, and whistle past the graveyard while thanking their lucky stars!

Second observation: Everyone in this book took a bath when the DOJ nixed the Allergan/Pfizer inversion merger. None of them anticipated the government shutting the door so emphatically.

Third observation: Mergers-Arbitrage as a "field" is constrained on returns by the cost of money. With current interest rates so low, the spreads are quite small. They all work hard to not be involved in any deals that blow up, and they do a ton of background work to analyze deals for legal problems, financing problems, culture problems between the betrothed, etc. A single merger position is sized to be 1-3% of portfolio value, to contain risk. (Or, that's what they admit to.)
https://www.goodreads.com/book/show/40307468-merger-masters
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Good points, Rob. There's no guarantee that this happens, and their public announcement is also a trial balloon to see how investors respond, I suspect.

And bonus points for referencing the Simpsons when it was good.

Awesome to hear that you liked Merger Masters. I love good investing war stories. I'm reading Barbarians at the Gate now, which is the story of the KKR takeover of RJR Nabisco. The first 60 pages were slow going, but it's picked up now. That takeover was iconic of the "corporate raider" moment of the 1980s. Now all the dollar amounts they're discussing just seem kinda small. Ha.

Jim
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Seems like "half of them" worked with (or talked to) Ivan Boesky
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I recently started "Den of Thieves", and Ivan Boesky is mentioned early on in that book.

volfan84
who came to this board/thread after noticing that IAC's share price had been up considerable in recent times from its longer-term history

25-year history
https://invest.kleinnet.com/bmw1/stats25/IAC.html

16-year history
https://invest.kleinnet.com/bmw1/stats16/IAC.html
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I read Den of Thieves a few years ago. It's an interesting and readable analysis of one of the nodal 1980s moments. Similarly, I'm nearly done with Barbarians at the Gate, which details the takeover of RJR Nabisco in the late 80s, another nodal moment of that era. The first 70-80 pages are overwritten and much too long, but it picks up not long after that and then you see all the workings of a takeover in process from many different angles. There are some great details there, too.

Jim
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