Taking advantage of merger disruptions.
Occasionally a publicly announced takeover/merger runs into trouble either due to anti-trust issues or authorities needing a few questions answered. This has the effect of the shares of one or both the entities pulling back creating a short-term buying opportunity. In most cases the transactions are never in real danger.
Take the case of Wellpoint - Anthem merger that was blocked by California (and the not-so-powerful state of Georgia). Investors who bet that the merger will ultimately go through would have made a neat profit if they had jumped in when the shares pulled back.
There were other transactions (think GE/Invision, PNC/Riggs) that created similar profit windows.
There are ofcourse those that drag on like the Oracle/Peoplesoft battle, but so far cases like that seem to be an exception. Most get resolved favorably.
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