[Thremp]

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Shoe,

I think the problem was the arbitrage title you made when in fact it wasn't an arbitrage at all (and the sole reason I opened this thread since I was like "Oh Oh I know what that is..."). However, it has proved very informative. Sometimes you gotta sift through it all though.

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Technically, it is called Merger Arbitrage, but is obviously not pure arb [as Thremp noted] since there is always some low level of risk in even the easiest deal [which this was not.]

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From what I gathered from reading through this, a merger arbitrage requires you to short the other stock to lock in the spread. Am I errant?

From what I gathered, he was making a value play based that he thought the deal was more likely to go through than the market. If he had shorted Whole Foods, it would have been a Merger Arb. Am I incorrect?

I'm just trying to learn the basics on this front.