With both the DOJ and EU regulatory body blessing the transaction, Google’s (GOOG) purchase of spinoff Motorola Mobility (MMI) is finally close to fruition. No small feat given the recent failures of some other large deals such as ATT’s (T) takeout of T-Mobile and the NYX/Deutsche Boerse combo. Motorola’s hefty patent portfolio appears to have been the impetus behind the deal and the regulatory bodies insisted that they will be closely monitoring the situation in order to ensure the patents are used and licensed out appropriately. The deal still requires approval from various other countries in which Motorola operates, most notably in China, but the expectations are that the deal will close in the coming weeks. I don’t really partake much in merger arbitrage (for various reasons), but according to SINletter’s table, the deal is still offering a ~7% annualized return, assuming it closes by the end of March. The spread did tighten a bit after this news broke though.
While I imagine many investors have already dumped their shares, buyers of this spin have fared quite nicely as MMI opened at ~$25.60 on its first day of trading. Analysts often tout the potential to be acquired in more digestible pieces as a spinoff benefit. Typically, this requires some patience to realize though as certain tax-free benefits of a spinoff can be lost if bought out too quickly. Some other recent spins where analysts have highlighted potential takeovers include Ntelos (NTLS) and stainless steel company Aperam (APEMY). Any other ones on your radar?
Disclosure: Author holds no position in any stock mentioned.