Playing Sun Microsystems

My next arb play is Sun Microsystems (Ticker: JAVA). I'm just about finished building a decent position in this stock. So far the average cost for my holdings is $9.19. It's a pretty good risk / reward risk arb play. You're looking at ~ + 20% annualized return with an end of August closing. Oracle (Ticker: ORCL) has the cash already to pay for this deal. Just need to wait for the US and EU regulators to give their blessing. There shouldn't be any issues, but you never know. Regulators can behave irrationally at times...

Which Risk Arb Play Now?

With the closing of Nova Chemicals (Ticker: NCX), I started nibbling at another risk arb play. I picked up a few shares of Hiland Partners (Ticker: HLND), a gas limited partnership. This limited partnership is going private at $7.75 per unit (share). The downside for this stock is that it is very thinly traded. It took me several days just to build a small position. Definitely use limit orders with this stock. In any case, this deal is expected to close by the end of Q3 so you're looking at an annualized return of ~25%.

Nova Chemicals = Done Deal

Finally!!! Today, IPIC received the approval from Investment Canada to complete the acquisition of Nova Chemicals (Ticker: NCX). The deal is scheduled to close on Monday, July 6th. This initially started off as a small arb play and evolved into a big position. It'll be a nice little pay day! I'm still looking for some new risk arb plays, but there's nothing out there to get excited about. That's about it for now...

Almost Done Deal FOR REAL With Nova Chemicals / IPIC

So there’s a small delay in the closing of the Nova Chemicals (Ticker: NCX) / IPIC deal. Nova Chemicals issued a press release stating that they expect Investment Canada to issue their decision on July 6th. It’s not a big deal, but time is money!

I’ve been nibbling at some Sun Microsystems (Ticker: JAVA) recently. I picked up some shares at $9.16 on June 23rd and $9.05 on June 26th. This is a very solid deal with the $9.50 per share offer from Oracle (Ticker: ORCL). I just have a small position right now, but will probably increase with the right price.

Legacy Reserves LP = No Deal

Yesterday, Legacy Reserves LP (Ticker: LGCY) rejected the going private proposal from Apollo Management. Apollo Management made the proposal in April for $14 per share adjusted for distribution pay outs. I picked up a few shares in April for $13.10 per share. I received one pay out of $0.52 per share, which equates to a cost basis of $12.58. The stock gapped down on the news, but closed strong. Today, the stock continued to rally to close at $13.00 per share. Apollo Management was clearly trying to get this on the cheap, when the price of oil was depressed. Now that the oil has rebounded, the company put in some nice hedges. The payout of $0.52 per share / quarter will continue...Not a bad yield. Now you can see why the shares are rallying. I'm going to hang on to this one for now.

Investment Canada is really taking their time to give the ok for IPIC to purchase Nova Chemicals (Ticker: NCX)... What's up with that!? Anyways, we should hear any day now.

A Bit More Nova Chemicals

I’ve continued to nibble on more Nova Chemicals (Ticker: NCX). IPIC just raised ~ $5.5 billion from the sale of Barclays. They have the cash on hand to close this deal. Just waiting for the government approvals. Here are the recent nibbles:

6/2/09 Bought .1X @ $5.85
6/2/09 Bought .3X @ $5.85
6/4/09 Bought .6X @ $5.84

Wait Almost Over for Nova Chemicals

It's been really quiet... I'm just waiting on the close of Nova Chemicals (Ticker: NCX) before I make my next move. I've done some trading in Nova Chemicals early on, but now holding for the close. Nova Chemicals is being acquired by International Petroleum Investment Company (IPIC) for $6.00 per share. The closing is expected in June.

Here are my trades so far:

Account #1:

4/14/09 Bought .5X @ $5.84
4/22/09 Sold .5X @ $5.89
4/28/09 Bought .5X @ $5.77
5/1/09 Sold .5x @ $5.81
5/4/09 Bought .5X @ $5.75
5/6/09 Sold .5X @ $5.78
5/7/09 Bought .5X @ $5.75
5/15/09 Bought .5X @ $5.68
5/21/09 Bought .1X @ $5.71
5/26/09 Bought .4X @ $5.79

Account #2:

4/2/09 Bought .6X @ $5.84
5/12/09 Bought .07X@ $5.69
5/12/09 Bought .1X @ $5.70
5/13/09 Bought .2X @ $5.68
5/20/09 Bought .1X @ $5.73