Crispin Odey Returns To Merger Arbitrage and Gold As Struggles Persist

Yet Another Merger bet

Crispin Odey is also betting on Ingram Micro Inc. (NYSE:IM) being taken over, as his fund bought 1.96 million shares of the tech company. A provider of technology and supply chain services, Ingram Micro has agreed to a $6 billion takeover by Chinese conglomerate HNA Group. The deal was put on hold, though, after the Shanghai Stock Exchange initiated an in-depth review of the deal, after questions were raised regarding the compatibility of Ingram Micro Inc. (NYSE:IM) and HNA subsidiary Tianjin Tianhai, as well as some of the financial aspects of the deal. Both companies, however, are determined to go through with the merger and expect to close the deal during the second half of the year. While the Chinese conglomerate agreed to pay $38.90 for each share, Ingram Micro’s stock fell as low as $33.43 in May and is still offering a good arbitrage opportunity at the current price of $34.56 per share. Alec Litowitz and Ross Laser‘s Magnetar Capital also stands to gain if the deal is approved, as it held a little over 3.18 million shares of Ingram Micro Inc. (NYSE:IM) at the end of June.

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Still Bullish On Gold

Despite some signs of exhaustion for the demand for gold and silver, Mr. Odey has decided to bet on Kinross Gold Corporation (USA) (NYSE:KGC). At the end of the second quarter, his fund had amassed 15.5 million shares of the Canadian gold-mining company, a position valued at $75.7 million on June 30. In a recent letter to investors, Mr. Odey argues that sooner or later, investors will return to gold; “In a world where $13 trillion of bonds are negative yielding, where $4 trillion of investments are in ETF’s, is it wise that only $1.5 trillion of savings are invested to protect investors against a change in the weather?” reads the letter. So far this year, Kinross Gold Corporation (USA) (NYSE:KGC) has risen by 172%, but has been trading in a range since the end of April. Nevertheless, the stock is still not far from its all-time lows and the financial results in its most recent quarter surpassed analyst’s revenue expectations, so there could be plenty of room yet left to run for the stock. The company posted an adjusted loss of $0.01 per share on the back of $876.4 million in revenue for its latest quarter, up by 16% year-over-year. Analysts’ had projected $862 million in revenue and earnings of $0.01 per share.

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Big Bet On Entertainment

Whether times are good or bad, entertainment is always in demand. Amaya Inc. (NASDAQ:AYA), a provider of a wide range of gaming and interactive entertainment products, is Odey Asset Management’s new top dog, after the fund acquired approximately 9.98 million shares of the stock during the second quarter, worth an $152.9 million. Amaya Inc. (NASDAQ:AYA) has a market cap of $2.25 billion and does not pay a dividend. For the second quarter, the company posted a profit of $22.5 million or $0.46 per share when adjusted for non-recurring costs, topping analysts’ consensus estimate of $0.36 per share. Revenue came in at $285.9 million, also ahead of Wall Street’s expectations of $279.6 million. Shares are currently up by 25% this year, but are flat during the third quarter. Zach Schreiber‘s Point State Capital also holds a sizable stake in Amaya Inc. (NASDAQ:AYA), consisting of 8.06 million shares worth $123 million at the end of June.

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Disclosure: None