Economics
The Rise of Nationalism Could Put Takeovers on Ice
The U.S. and European nations are building stronger defenses, primarily against Chinese investors.
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On the last day of July, a group of hedge fund managers met at Sakagura, a subterranean sushi restaurant in Manhattan. The bunker vibe was fitting, given that those assembled had just lost more than $1 billion combined. Worse, they’d done so on a sure thing.
Traders specializing in merger arbitrage had stacked up vast bets on NXP Semiconductors NV, a Dutch maker of chips that accepted a $44 billion buyout offer from U.S. rival Qualcomm Inc. The arb playbook is to buy shares in companies that have agreed to sell themselves but have yet to complete the transaction, taking advantage of a discount, or “spread,” that reflects the risk of the deal failing. The Qualcomm-NXP bet was, in hedgie-speak, a “layup.”