- Magnachip Semiconductor Corporation agreed to be acquired by Wise Road Capital, a Chinese private equity firm, in return for $29 per share in cash.
- The merger needs both U.S. and South Korean approvals before the transaction can close. Given the doubts surrounding these approvals, there is currently a 29 percent risk arbitrage present.
- Despite the perceived risks, U.S. approval seems likely while South Korean approval is certainly a possibility, making MX a potentially rewarding investment opportunity.
- And even if the deal fails, the downside appears quite tolerable considering the business prospects for MX as well as the potential for another take-control acquisition.
For further details see:
Magnachip Semiconductor Corporation: Assessing The Regulatory Risks