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Billionaire Mario Gabelli Made Large Moves In Several Merger Arbitrage Plays Going Into 2017

Harman International Industries Inc (NYSE:HAR)

– Shares Held By GAMCO Investors (as of December 31): 851,325

– Value of Holding (as of December 31): $94.63 Million

GAMCO Investors made one of its most bullish moves during the fourth quarter in Harman International Industries Inc (NYSE:HAR), upping its holding in the company more than eleven-fold. Like CLARCOR, Harman International Industries Inc (NYSE:HAR) also agreed to be acquired nearing the end of 2016, which sent its shares soaring. In this case, South Korean behemoth Samsung agreed to acquire the auto-focused connected products manufacturer for $112 per share in November, paying a near 40% premium from the $80-levels the stock was trading at prior to the announcement of the deal. According to both companies, the deal is expected to be completed in the middle of 2017. On January 26, Harman International declared a quarterly dividend of $0.35 per share, which was in-line with the previous dividend.

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Mondelez International Inc (NASDAQ:MDLZ)

– Shares Held By GAMCO Investors (as of December 31): 3.17 Million

– Value of Holding (as of December 31): $140.79 Million

Confectionary giant Mondelez International Inc (NASDAQ:MDLZ), which has been trying to undergo a transformation for several quarters now, became even more appealing to GAMCO Investors during the fourth quarter; the fund increased its holding in the company by 19% during that time. While Mondelez International Inc (NASDAQ:MDLZ)’s stock is currently trading close to its lifetime high, it has mostly been range-bound since the second-half of 2015. For its most recent quarter, the company failed to beat analysts’ EPS and revenue estimates. However, it provided some relief to shareholders by reaffirming its 2017 guidance and 2018 margin targets. Some analysts think that if one takes into account Mondelez’s present and projected financials, the stock would be a bargain at levels around $40 due to the forward yield it sports, which presently stands at 1.75%.

Chemtura Corp (NYSE:CHMT)

– Shares Held By GAMCO Investors (as of December 31): 4.57 Million

– Value of Holding (as of December 31): $151.87 Million

Chemtura Corp (NYSE:CHMT) is another merger arbitrage play that GAMCO Investors held at the end of 2016. However, unlike the other two stocks we discussed previously, in this case GAMCO Investors chose to lower its holding in the company, by 15%. The announcement that Chemtura Corp (NYSE:CHMT) will be acquired was made near the end of the third quarter of 2016 and after the initial spike its stock has been hovering close to the $33 level. Chemtura will be acquired by German-based specialty chemical company Lanxess for approximately $2.5 billion in an all-cash deal. At the time of the announcement, Laxness said that the deal will help it expand its business activities in additives for lubricants and flame retardants.

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Disclosure: None

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