Next in line is NXP Semiconductors NV (NASDAQ:NXPI) of which Dinan held some 4.09 million shares valued at $312.22 million in his fund’s portfolio at the end of the fourth quarter. NXP entered into a definitive merger agreement on March 2 with Freescale Semiconductor Ltd (NYSE:FSL), under which the latter will receive $6.25 in cash and 0.3521 of an NXP share for each of its own ordinary shares. The transaction is expected to close in the second half of 2015, and assuming an early October close, the annualized arbitrage returns stand at about 21%.
Among the billionaires that we track, eight had invested a total of $1.12 billion in the company. David Tepper of Appaloosa Management LP was one such billionaire, as his fund held some 2.35 million shares valued at $179.75 million according to the latest 13F filing. NXP Semiconductors NV (NASDAQ:NXPI) has benefited considerably from the overwhelming success of Apple Inc. (NASDAQ:AAPL)’s iPhone 6, as it provides the $726 billion company with high performance solutions relating to radio frequency.
Dinan initiated a stake in DIRECTV (NASDAQ:DTV) during the third quarter after the announcement in May last year that the company was going to be acquired by AT&T Inc. (NYSE:T) in a cash and stock transaction that valued DIRECTV at $95 per share at that time. The price included $28.50 in cash per share and a collar agreement which could pay between 1.724 and 1.905 of AT&T shares, depending upon AT&T’s price at the closing of the deal. Although expected to close within 12 months at the time of the announcement, it could take the deal significantly longer as the FCC paused the 180 day “shot clock” in mid-March to evaluate if sensitive information regarding the two merging companies should be shared with the other media companies taking an active role criticizing the marriage of these two companies. The annualized arbitrage returns stand at 17% assuming the $95 closing price and the deal reaching completion by this May.
DIRECTV (NASDAQ:DTV) was held by 63 hedge funds at the end of the fourth quarter among those that we track, with an aggregate investment of $10.66 billion, as compared to 57 funds with $9.67 billion invested a quarter earlier. Warren Buffett’s Berkshire Hathaway held the highest stake among these with 31.35 million shares valued at $2.72 billion. The company was also among the top picks of billionaire Tom Sandell at the end of 2014.
The Comcast Corporation (NASDAQ:CMCSA) – Time Warner Inc(NYSE:TWX) merger has met the same fate in terms of FCC intervention. Comcast is set to acquire TimeWarner in a stock for stock transaction that valued the latter at about $158.82 per share based on the stock prices at the time of the announcement. The deal was expected to close towards the end of 2014, yielding annualized merger arbitrage returns of nearly 199%, but has been marred by delays owing to regulatory reviews.
Paul Ruddock and Steve Heinz’s Lansdowne Partners held a significant stake in the media and technology company amounting to 24.77 million shares valued at $1.44 billion, according to its latest 13F filing. York Capital also held some 3.74 million shares of Comcast Corporation (NASDAQ:CMCSA) valued at $216.97 million towards the end of the fourth quarter.
Family Dollar Stores, Inc. (NYSE:FDO) was another of Dinan’s risk arbitrage picks. The company is set to be acquired by Dollar Tree, Inc. (NASDAQ:DLTR) in a cash and stock transaction that values Family Dollar at approximately $76.50 per share. Family Dollar shareholders approved the merger in January and the deal could close this month, but it is still awaiting the FTC’s approval. Based on Family Dollar Stores, Inc. (NYSE:FDO)’s current price, the annualized arbitrage returns stand at about 34%. Nelson Peltz’s Trian Partners and Paul Singer’s Elliot Management are two other significant stock holders of Family Dollar, with their respective stakes standing at 8.37 million shares valued at $662.70 million and 8.10 million shares valued at $641.78 million respectively.
Disclosure: None
