IRBT new 52 lo

IRBT new 52 low

LOL!!!! Jim Cramer says sell IRBT and it's green.

UGGGHHHH, shoulda known better. Let's hope for positive earnings next time or buyout by someone like Amazon (again)

I think I got it at the right time this morning!

IRBT 10Q 2/26

All out buy Short squeeze Rally possible. Back to high 20s. Just don’t know. We shall see.

I don't think it's seen the end of that one yet.

More lows to come?

IRBT new 52 week low

Amazon's abandoned acquisition leaves iRobot in Carlyle debt straightjacket

Greg Roumeliotis
Wed, January 31, 2024 at 4:04 AM MST·3 min read
https://finance.yahoo.com/news/amazons-abandoned-acquisition-leaves-irobot-110459021.html

(Reuters) - The collapse of iRobot's $1.4 billion sale to Amazon will test the cash-strapped robot vacuum cleaner maker's ability to repay a $200 million loan it took from private equity firm Carlyle Group last year.

The Roomba vacuum maker said on Monday it would lay off 31% of its roughly 1,130 employees and cut costs to save $150 million or more, as the deal's demise in the hands of European antitrust regulators left it confronting plunging revenue and soaring losses.

Regulatory filings shed light on how the terms of the Carlyle loan that iRobot accepted last July to tide itself over during the deal's regulatory review are weighing on its finances and have added to the pressure to cut costs.

The Bedford, Massachusetts-based company said on Monday its agreement with Carlyle requires it to set aside $75 million out of a $94 million deal break-up fee it will receive from Carlyle towards repaying the loan.

The loan runs to July 2026 and charges iRobot an annual interest rate of as much as 9% plus the Secured Overnight Financing Rate (SOFR), totaling 14.3%, the filings show.

Private equity firms like Carlyle charge more than banks to lend to companies, because they are more open to negotiating custom terms and willing to take on more risk. Yet even by that measure, Carlyle's loan is pricey.

Its spread of 900 basis points compares to an average spread of 599 basis points in direct lending deals of private equity firms with large companies, Loan Pricing Corporation data showed.

To ensure a sweet deal, Carlyle negotiated a minimum guaranteed return, so that even if iRobot prepays the loan, the private equity firm will have made 1.4 to 1.7 times the loan's principal, the filings show.

Carlyle also restricted iRobot's ability to spend money before the loan is repaid. The loan terms require iRobot to maintain a minimum of $250 million in cash, accounts receivable and inventory, the filings show.

The company had double that amount in hand as of the end of September, according to its most recent earnings disclosure. But it also said losses grew to $241 million in the first nine months of 2023 from $202 million in the year-ago period.

An iRobot spokeswoman said the company had no comment beyond its public disclosures. A Carlyle spokeswoman declined to comment.

The iRobot loan is one of several direct lending deals that private equity firms jumped on last year as banks retrenched amid underwriting losses caused by the rapid rise in interest rates.

While most direct lending deals pertain to leveraged buyouts, Carlyle, which managed $150 billion in credit assets as of the end of September, has carved out a niche for lending to non-private equity owned businesses. Its recent loan deals include Park County, the intellectual property owner of media franchises South Park and Book of Mormon.

iRobot's shares soared during the COVID-19 pandemic as stay-at-home consumers splashed out on its fancy vacuum cleaners. But as the novelty fizzled and inflation soared, sales dropped and its finances deteriorated. The stock ended at $14.25 on Tuesday, its lowest since 2009, giving iRobot a market value of about $400 million.

iRobot, whose Chief Executive Colin Angle stepped down on Monday and was replaced on an interim basis by Chief Legal Officer Glen Weinstein, has said that the cost cuts, together with improvements in its marketing strategy and product offerings, will help it return to profitability.

iRobot Announces Operational Restructuring Plan to Position Company for the Future

iRobot Corporation
29 Jan, 2024, 08:31 ET

https://www.prnewswire.com/news-releases/irobot-announces-operational-restructuring-plan-to-position-company-for-the-future-302046345.html

Announces Leadership Transition

Provides Preliminary Fourth Quarter Results; Schedules Conference Call for February 27, 2024

BEDFORD, Mass., Jan. 29, 2024 /PRNewswire/ -- Today, iRobot Corporation (NASDAQ: IRBT), a leader in consumer robots, announced that it will implement an operational restructuring plan designed to position the Company for stabilization in the current environment, while focusing on profitability and advancing key growth initiatives to extend its market share in the mid-tier and premium segments. This plan was approved following iRobot's and Amazon's mutual decision to terminate their previously announced merger agreement. That announcement can be found here.

Concurrent with the implementation of its operational restructuring plan, the Company today also announced a leadership transition whereby Colin Angle, Chairman of the Board of Directors and CEO, has stepped down as Chairman and CEO. Glen Weinstein, iRobot's Executive Vice President and Chief Legal Officer, has been appointed Interim CEO, and Andrew Miller, lead independent director of the Board, has been appointed Chairman of the Board.

iRobot's immediate priority in undertaking the operational restructuring plan is to more closely align its cost structure with near-term revenue expectations and drive profitability, including through the following financial and strategic initiatives:

Achieving margin improvements and generating approximately $80-$100 million in savings on equivalent volumes through the execution of agreements with joint design and contract manufacturing partners on more attractive terms that provide significant reductions in cost of goods sold;

Reducing R&D expense by approximately $20 million year-over-year through increased offshoring of non-core engineering functions to lower-cost regions;

Centralizing global marketing activities and consolidating agency expenditures to reduce sales and marketing expenses by approximately $30 million year-over-year while seeking efficiencies in demand generation activities to drive sales more cost effectively;

Rightsizing the Company's global real estate footprint through additional subleasing at its corporate headquarters and the elimination of offices and facilities in smaller, underperforming geographies; and
Focusing iRobot's product roadmap on core value drivers and pausing all work related to non-floorcare innovations, including air purification, robotic lawn mowing and education.

These actions will also result in a reduction of approximately 350 employees, which represents 31 percent of the Company's workforce as of December 30, 2023, with the majority of notifications taking place by March 30, 2024. As part of this workforce reduction, iRobot expects to record restructuring charges totaling between $12 million and $13 million, primarily for severance and related costs, over the first two quarters of 2024, with the majority of the restructuring charges anticipated in the first quarter of 2024.

Jeff Engel, a highly regarded turnaround expert, has been appointed Chief Restructuring Officer to oversee these initiatives and lead the implementation of the operational restructuring plan and will report directly to the Board and Mr. Weinstein.

The Company will continue executing key strategic activities to support iRobot's return to profitability, including increasing its brand recognition, driving product innovation and redesigning its go-to-market strategy. Enhancements to the Company's go-to-market playbook will focus the business on iRobot's most profitable customers, geographies and channels, including its growing direct-to-consumer channel, while rebalancing the Company's spending mix between price, promotion and demand generation to optimize returns.

Andrew Miller, Chairman of the Board, said, "iRobot is a pioneer of the consumer robot field and beloved by its customers around the world. With a legacy of innovation and a foundation of creativity, the Board and I believe that iRobot can – and will – grow its presence and continue to build a cutting-edge suite of robotic floorcare solutions that help consumers make their homes easier to maintain and healthier places to live. To do this successfully, however, we must rapidly align our operating model and cost structure to our future as a standalone company. Though decisions that impact our people are difficult, we must move forward with a more sustainable business model, and a renewed focus on profitability. We are confident that the actions we are announcing today will enable us to chart a new strategic path for sustainable value creation."

Leadership Transition

Concurrent with the implementation of its operational restructuring plan, the Company today also announced the following leadership changes:

Colin Angle has stepped down as Chairman of the Board and CEO. Mr. Angle will continue to serve on the iRobot Board of Directors until his current term expires in May 2024, and has agreed to remain with the Company as a senior advisor for up to 12 months, to ensure a smooth transition.
Glen Weinstein, iRobot's Executive Vice President and Chief Legal Officer, has been appointed Interim CEO, and the Board has initiated a search process for a permanent CEO supported by a leading executive search firm. Mr. Weinstein originally joined iRobot in 2000 as General Counsel and was promoted to General Counsel and Senior Vice President in 2005, prior to being appointed Executive Vice President and Chief Legal Officer in 2012.

Tonya Drake has been promoted to Executive Vice President and General Counsel.

The Board has appointed Andrew Miller, lead independent director of the Board, as Chairman of the Board. Mr. Miller has served on the iRobot Board since 2016. From 2015 until 2019, Mr. Miller was the Executive Vice President and Chief Financial Officer of PTC, a computer software and services company focused on accelerating transformation through digital technology. From 2008 to 2015, Mr. Miller was the Executive Vice President and Chief Financial Officer of Cepheid, a global leader in molecular diagnostics. Prior to Cepheid, Mr. Miller held a variety of financial leadership roles at Autodesk, MarketFirst Software and Silicon Graphics.

"On behalf of the Board, I would like to extend my sincerest gratitude to Colin for more than 33 years of leadership in building a company that has changed the world," continued Mr. Miller. "Simply put, Colin revolutionized the robotics industry and under his tenure, iRobot has pioneered the intersection of robotic technology and consumer needs. We are grateful for his visionary leadership, relentless focus on R&D and commitment to our global team. I particularly appreciate Colin's support of this transition. We are also grateful to Glen for stepping up to guide our Company through this important period. As the search for our next CEO progresses, I know we will benefit from Glen's deep knowledge of our business, having been an integral member of iRobot's leadership team for over 20 years."

Mr. Angle said, "When I founded iRobot more than three decades ago, having more than 50 million of our products in homes worldwide was beyond my wildest imagination. I am incredibly proud of what our team has accomplished over the years. From the development of the first Roomba in 2002 to our latest generation, they have been relentless in building and delivering new and iconic ways for consumers to clean and live. At the same time, I know there is a lot of work to do to map iRobot's next chapter. Given the nature of the challenges facing the Company, the Board and I have mutually decided that iRobot will be better served by a new leader with turnaround experience. I would like to sincerely thank our team members around the world for their commitment to our mission of helping people do more. I know iRobot has the talent and passion to succeed in continuing to build the world's most thoughtful and intelligent home innovations for years to come."

Financial Update

The Company today also announced certain preliminary fourth-quarter results. iRobot anticipates reporting full-year 2023 revenue of $891 million, a 25% reduction as compared to the same period last year, a GAAP operating loss of between $265 and $285 million, and a non-GAAP operating loss of approximately $200 million. The Company ended fiscal year 2023 with $185 million in cash and cash equivalents, funded primarily from its previously announced three-year $200 million credit agreement with The Carlyle Group, which matures on July 24, 2026.

Under the terms of the merger agreement, Amazon will pay iRobot a $94 million termination fee. After payment of financial advisor fees of approximately 20% of the termination fee, the Company shall apply $35 million dollars of the termination fee immediately to repay the term loan, and the remainder of the termination fee will be set aside to be used for future repayments of the term loan subject to limited rights of the Company to utilize such amounts for the purchase of inventory.

"We are disappointed with the Company's 2023 performance – but our focus turns now to the future," said Mr. Miller. "Along with the restructuring actions announced today, and with a refreshed turnaround-focused leadership team, we see a clear path to reinvigorating our outstanding brand, product performance and underlying technology. In addition to rightsizing our cost structure, innovation remains our most exciting growth opportunity. We look forward to reigniting growth of the brand with future launches of both new entry and premium floorcare solutions that will provide even smarter and more powerful ways for our customers to clean."

The Company will provide additional information on the Company's restructuring efforts and go-forward business plans at its fourth-quarter 2023 earnings call, scheduled for February 27, 2024.

About iRobot
iRobot is a global consumer robot company that designs and builds thoughtful robots and intelligent home innovations that make life better. iRobot introduced the first Roomba robot vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 50 million robots worldwide. iRobot's product portfolio features technologies and advanced concepts in cleaning, mapping and navigation. Working from this portfolio, iRobot engineers are building robots and smart home devices to help consumers make their homes easier to maintain and healthier places to live. For more information about iRobot, please visit?www.irobot.com.

Amazon and iRobot Agree to Terminate Pending Acquisition

https://www.businesswire.com/news/home/20240128042393/en/

Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation.

January 29, 2024 08:30 AM Eastern Standard Time

SEATTLE & BEDFORD, Mass.--(BUSINESS WIRE)--Today Amazon (NASDAQ: AMZN) and iRobot (NASDAQ: IRBT) announced that they have entered into a mutual agreement to terminate their previously announced acquisition agreement, originally signed on August 4, 2022, under which Amazon would have acquired iRobot for cash consideration. This deal would have allowed Amazon to invest in continued innovation by iRobot and support iRobot in lowering prices on products customers already love. The companies released the following statements today about the decision:

“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love.”

“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality. This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics. Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.”

“iRobot is an innovation pioneer with a clear vision to make consumer robots a reality,” said Colin Angle, Founder of iRobot. “The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love.”

The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Amazon paying iRobot the previously agreed upon termination fee.

💲Oversold & ready to bounce.💲

Moooovin' on UP!🚀

And it was around 40 before the Amazon acquisition was announced. It fell way too far due to that recent EU news. Bounce imminent imo.

Amazon's iRobot deal faces EU antitrust veto, sources say
9:56 AM ET, 01/19/2024 - Reuters
By Foo Yun Chee

BRUSSELS, Jan 19 (Reuters) - Amazon's $1.4 billion acquisition of robot vacuum maker iRobot will be blocked by EU antitrust regulators, three people familiar with the matter said on Friday, as enforcers beef up scrutiny of Big Tech deals.

The U.S. online retail giant defied a European Commission's warning that the deal could restrict competition in the market for robot vacuum cleaners by declining to offer remedies to address such concerns last week.

The Commission, which is scheduled to decide on the deal by Feb. 14, and Amazon declined to comment.

The regulator's main concerns were that Amazon may thwart iRobot rivals on its online marketplace, especially in France, Germany, Italy, and Spain.

While these could be addressed by newly enforced EU tech rules known as the Digital Markets Act, the Commission feels that the lengthy enforcement process and the fact that the new legislation has not been challenged in court means that it is better to block the deal now, one of the people said.

A veto would raise the bar for future Amazon acquisitions for online rivals with EU antitrust enforcers who will likely demand major remedies in exchange for their green light.

iRobot shares were down 30% in late trade. (Reporting by Foo Yun Chee, Editing by Louise Heavens)

IRBT Stock was 40$ a few days ago 15.30$ Now Buying upside calls Amazon AMZN Can easily appeal ruling or any positive news and we can see a sharp reversal to the upside like we saw with SAVE Today https://press.aboutamazon.com/2022/8/amazon-and-irobot-sign-an-agreement-for-amazon-to-acquire-irobot

Yep. The Brief is the EU commission intends to Block it

Wallstreet Journal and behind a paywall for me - so I have to wait to find an article on it.

Something leaked

Amazon may walk away from deal to buy iRobot, but there’s still hope for a tech M&A revival this year

Story by Therese Poletti

https://www.msn.com/en-us/lifestyle/shopping/amazon-may-walk-away-from-deal-to-buy-irobot-but-there-s-still-hope-for-a-tech-m-a-revival-this-year/ar-AA1mPZzo


MARKETWATCH FIRST TAKE

The current scrutiny of anti-competitive business tactics by Amazon.com Inc. by both U.S. and European Commission regulators has put its pending acquisition of Roomba maker iRobot at risk, but there are hopes that tech M&A will come back this year nonetheless.

This week, Amazon missed a deadline to file concessions to the EU that would allay any concerns the regulators have about its pending $1.4 billion acquisition of iRobot Corp. IRobot makes the popular Roomba robotic vacuum cleaner, which sells for about $225 on Amazon.

In September, the U.S. Federal Trade Commission filed a vast lawsuit against Amazon, alleging that the company is a monopolist and harms consumers by favoring its own products over those by third-party sellers on its giant e-commerce site. It did not mention the iRobot deal in its 172-page complaint, but it did note Amazon’s expansion through acquisitions.
After opening an investigation into the deal in July, in late November the EC said it wanted assurances that Amazon would not harm competition while offering iRobot’s Roomba and other products on its website by engaging in “foreclosing strategies.” The deal has been approved by regulators in the United Kingdom.

“I think the larger issue is the FTC antitrust suit that was filed in September, along with 17 state attorneys general,” said Ben Rose, president and founder of Battle Road Research in Lexington, Mass. “The lawsuit is general commentary about Amazon’s third-party relationships. …So that aspect is clearly right in the crosshairs of what iRobot is, and what it would bring to Amazon and its quiver of smart-home products.”

Some analysts believe that instead of spending the reduced sum of $1.4 billion, down from $1.7 billion as previously negotiated, Amazon may just let the deal lapse. The companies agreed to a lower price in July,

“It’s a lot of speculation, but it could be they are willing to walk away,” said Dan Newman, president of Futurum Research. “Amazon doesn’t have a robotic vacuum product, but a robot with telemetry can be built. Amazon may ultimately believe there may be another way to capture this market.”

Shares of iRobot jumped 4.4% on Thursday, ending a five-day selloff that saw the stock fall 19%. Shares are down 35% over the past 12 months.

Rose, of Battle Road Research, said the robotic vacuum market that iRobot pioneered is now cluttered with at least a dozen competitors, one of the key reasons for the company’s falling sales in the past several quarters. He believes Amazon was more interested in iRobot’s navigation and mapping abilities to create a map of a consumer’s home, if the customer gave permission — data that would meld with its vision of a smart home.

“Amazon’s interest lies in this smart navigation/mapping that can be used in a variety of areas, as opposed to ‘we are going to buy the market-dominant home-cleaning robot,'” Rose said. Amazon has a home security and monitoring robot with mapping abilities called Astro, now available by invitation-only for $1,600, but it is not mapping as many homes as the Roomba.

But even if Amazon’s deal for iRobot ultimately collapses, it is not necessarily a sign of another terrible year for tech M&A deals. Ted Smith, the president and co-founder of Union Square Advisors in New York, said 2023 saw a 50% plunge in deal values, to about $264 billion. Regulatory scrutiny may now be focused on Big Tech, but he said other companies are beginning to look for deals.

“For the biggest companies — Big Tech, the Magnificent Seven — doing deals of a meaningful size will be difficult,” Smith said. However, “there are a lot of buyers out there returning to M&A in a meaningful way.”

This week’s news that Hewlett-Packard Enterprise agreed to buy Juniper Networks for $14 billion could be a sign of similar deals to come. The conviction among many that the Federal Reserve will start to ease interest rates later this year could also contribute to better deal flow, as will the need for private equity to provide returns to their investors.

“All those are factors will embolden the traditional acquirers to come back into the game,” Smith said, adding that companies like Adobe Inc. Salesforce.com Inc. and IBM Corp. to name a few, will likely return to M&A.

IRobot could face the future alone, but Rose isn’t worried about the company, which currently has no Wall Street coverage because of the pending Amazon deal. “They have been through tough times before in their history. They know how to run a tight ship, when a tight ship needs to be run,” he said.

IRBT rumor causing that drop on IRBT?

iRobot plunges to session lows amid Politico Pro story on Amazon deal

https://www.msn.com/en-us/money/companies/irobot-plunges-to-session-lows-amid-politico-pro-story-on-amazon-deal/ar-AA1mLPb0

iRobot (NASDAQ:IRBT) dropped to session lows, plunging 19%, amid a report about the planned sale to Amazon (NASDAQ:AMZN).

Amazon (AMZN) skips settlement offer with European Commission for iRobot deal, according to a posting on X from Politico Pro.

The drop comes as Wednesday is the deadline for the parties tp submit remedies to the European antitrust regulator for the planned purchase is Wednesday.

The maker of the Roomba robot vacuum and its planned buyer, Amazon (AMZN) have until Wednesday to submit remedies to the European Commission to try to get the authority to approve the deal.

An Amazon (AMZN) spokesperson declined to specifically comment on the EC remedy.

"We’re working cooperatively with the relevant regulators in their review of the merger," the Amazon spokesperson told Seeking Alpha in an emailed statement.
The European Commission warned in November, in a statement of objections, that it was concerned about the robot vacuum maker's $1.4 billion sale to Amazon (AMZN). The EC has until Feb. 14 to make a final decision on the transaction.

The European antitrust regulator announced in July that it opened an in-depth review into Amazon's (AMZN) purchase of the robot vacuum cleaner. The UK's antitrust regulator approved the transaction in June.

iRobot (IRBT) received a second request from the Federal Trade Commission last September to do a more in-depth review of the Amazon (AMZN) deal. Amazon in June confirmed it filed substantial compliance with the FTC's second request.

IRBT currently at 34.02 down $3.04 ( - 8.20%) and on above ave. volume.

Amazon to defend iRobot buy at Dec 18 EU hearing, source says

Foo Yun Chee
Tue, December 12, 2023 at 6:37 AM MST·1 min read

https://finance.yahoo.com/news/amazon-defend-irobot-buy-dec-133702497.html


BRUSSELS (Reuters) - Amazon will defend its $1.4 billion purchase of robot vacuum maker iRobot at a closed EU hearing on Dec. 18, a person with direct knowledge of the matter said, three weeks after EU antitrust regulators said the deal may squeeze out rival robot cleaners on its online marketplace.

Companies usually take the opportunity to plead their case before senior officials from the European Commission and national regulators as well as lawyers.

The EU competition enforcer last month sent Amazon a charge sheet laying out its concerns about the deal, after its lawyers revised their initial position against sending a document because they did not see any anti-competitive harm in the deal.

Amazon declined to comment and reiterated comments issued after it got the EU charge sheet, namely that it can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.

The company may have to offer remedies to address competition concerns.

Message to the clueless fools selling Jan 19 $55.00 calls at $0.05 you will most likely end up looking like a moron doing that.

Here's the Latest on Amazon's Acquisition of iRobot at the End of 2023

https://www.fool.com/investing/2023/12/03/heres-the-latest-on-amazons-acquisition-of-irobot/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

By Collin Brantmeyer – Dec 3, 2023 at 8:36AM

KEY POINTS
Amazon offered $61 per share for iRobot over a year ago.
The deal is facing regulatory scrutiny, and the buyout price has changed to $51.75 per share.
The spread between the new terms and iRobot's current share price create a merger arbitrage opportunity.

Price as of December 1, 2023, 4:00 p.m. ET
$36.78

It's unclear whether Amazon's bid to buy iRobot will win all the necessary regulatory approvals.

It has been well over a year since Amazon (AMZN 0.64%) announced it would acquire iRobot (IRBT 1.85%), the consumer robot company best known for its Roomba line of robot vacuum cleaners. The acquisition has stalled over regulatory concerns, and its initial terms have been amended. Nonetheless, iRobot shares are currently trading 43% below the updated acquisition price, creating a significant merger arbitrage opportunity.

Let's explore what happened since the acquisition bid was announced and how investors could capitalize on this situation.

A brief timeline of Amazon's proposed acquisition of iRobot

In Aug. 2022, Amazon announced its intention to acquire iRobot in an all-cash deal for $1.7 billion at a buyout price of $61 per share. Almost a year later, in July 2023, that deal was amended to a buyout price of $1.4 billion, or $51.75 per share, after iRobot took on $200 million in new debt to fund its ongoing operations.

Generally, for an acquisition deal to go through, it must meet two requirements. First, shareholders of the target company need to vote in favor of the deal. Second, the deal must be approved by regulators, and if it's a cross-border business, regulatory bodies from multiple nations will need to approve it.

The amended agreement cleared the first hurdle on Oct. 12, 2023, when iRobot's shareholders approved it at a special meeting.

The second hurdle has proven more complicated. The U.K.'s Competition and Markets Authority approved the original deal in June 2023, but the U.S. Federal Trade Commission (FTC) and the European Commission have yet to hand down their decisions. As of this writing, the FTC is still investigating the deal after formally requesting additional information in Sept. 2022. Notably, the proposed acquisition wasn't included in the FTC antitrust lawsuit against Amazon from a few months ago.

Meanwhile, the European Commission sent a statement of objections to Amazon this month detailing its concerns. However, that doesn't mean the deal will fail as Amazon will likely have the chance to offer remedies or better address specific issues to secure unconditional clearance for it.

Similarly, Microsoft needed to make concessions for its recent acquisition of video game giant Activision Blizzard, but the buyout price did not change from what the parties originally agreed to.

What's a merger arbitrage?

With a potential buyout planned at $51.75 per share but iRobot stock trading near $36 as of this writing, investors may see an opportunity, one commonly referred to as merger arbitrage.

Merger arbitrage is a short-term investing strategy that involves buying shares of a company for which a buyout has been proposed while the stock trades below the expected acquisition price. Though Warren Buffett is famously a proponent of long-term investing, he has frequently participated in merger arbitrage, most recently around Microsoft's purchase of Activision Blizzard and IBM's acquisition of Red Hat.

In Buffett's 1988 annual shareholder letter, he outlined the questions to ask before investing in a bid to take advantage of a merger arbitrage situation:

To evaluate arbitrage situations, you must answer four questions: (1) How likely is it that the promised event will indeed occur? (2) How long will your money be tied up? (3) What chance is there that something still better will transpire -- a competing takeover bid, for example? And (4) what will happen if the event does not take place because of antitrust action, financing glitches, etc.?

In the case of the iRobot deal, for the first point, both the FTC and European Commission have expressed serious antitrust concerns. Second, the European Commission has a Feb. 14 deadline to decide on the deal, meaning prospective investors' money likely won't be tied up too much longer. Third, a competing bid seems unlikely, given that the agreement was announced roughly 15 months ago and no such offer has emerged. Finally, through the first nine months of 2023, iRobot's revenue is down 29% year over year to $583 million, and the company's net losses widened 19% to $241 million. Between its significant top- and bottom-line declines and its recent move to take on $200 million in additional debt, iRobot does not look like an appealing investment as a stand-alone company.

Is iRobot a merger arbitrage buy?

iRobot stock closed on Nov. 30 at $36.11 per share, creating an unusually high "spread" -- the percentage between the stock's trading price and buyout price -- of roughly 43%. The market seems to be pricing iRobot as if the deal is unlikely to go through.

That doesn't mean the deal is dead, but let's circle back to Buffett's thoughts on merger arbitrage. In his 1989 letter to Berkshire Hathaway shareholders, he wrote, "We will engage in arbitrage from time to time -- sometimes on a large scale -- but only when we like the odds." Not only are the odds in dispute when it comes to this particular deal, but iRobot likely doesn't meet all of Buffett's prerequisites.

Keep an eye out for more news from the FTC and European Commission, but in the meantime, the merger arbitrage opportunity with iRobot stock looks too risky for most investors.

Amazon’s $1.4 Billion iRobot Deal Gets EU Warning on Competition
Samuel Stolton
Mon, November 27, 2023 at 1:17 PM MST·3 min read

https://finance.yahoo.com/news/amazon-1-4-billion-irobot-180000158.html

(Bloomberg) -- Amazon.com Inc.’s $1.4 billion deal for Roomba maker iRobot Corp. risks being derailed unless the firms fix a list of competition concerns highlighted by the European Union’s antitrust arm.

The European Commission in Brussels issued a so-called statement of objections on Monday, warning how Amazon’s proposed deal could hurt the market for the manufacturing and supply of robot vacuum cleaners, and allow the ecommerce giant to strengthen its position in the market for online marketplaces and in other data-related services.

Shares of Bedford, Massachusetts-based -Robot fell as much as 25% on the news, the biggest intraday drop in nearly three years. Shares had jumped last week after a Reuters report suggested the deal would be cleared unconditionally.

The EU’s warning listed concerns including that Amazon could demote other robot vacuum cleaners on its platform and could use labels for its own products such as “Amazon’s choice” or “Works With Alexa.” The commission also said Amazon may find it “economically profitable” to shut out rivals.

While getting a statement of objections signals the EU has serious concerns with a transaction, most merging companies avoid a veto by addressing competition issues. Companies also have the right to challenge the preliminary findings of regulators in writing or at a hearing.

“Given the intense competition that iRobot faces, we are disappointed the EC has issued a Statement of Objections on the grounds that the proposed merger would restrict competition, Colin Angle, iRobot’s chairman and chief executive officer, said in a statement. He said the company continues to cooperate with the EC and other regulators.

An Amazon spokesperson said that the company is focused on addressing the European Commission’s concerns.

When Amazon announced its intention to buy iRobot last year, the acquisition was seen as a way for the e-commerce giant to expand its presence in the burgeoning market for smart-home gadgets. Besides baking its Alexa voice assistant into multiple devices, the company has fielded a personal robot named Astro, which has failed so far to resonate with consumers. Amazon now plans to sell a version of the robot as a rolling security guard for businesses, Bloomberg reported earlier this month.

IRobot’s sales surged during the pandemic as housebound families looked for faster ways to clean their residences. But demand for its products has since waned. Meanwhile, rivals have been rolling out their own robotic cleaning machines, prompting the company to file patent infringement lawsuits. In July, Amazon cut its offer by 15% to $51.75 a share to account for fresh financing taken out by iRobot as the merger review drags on.

The EU opened an in-depth probe into the deal in July, noting that it could thwart other robot vacuum cleaners and make it “more difficult for rival marketplace providers to match Amazon’s online marketplace services.”

Monday’s move puts the commission at odds once again with Britain’s Competition and Markets Authority, which gave the deal the green light after concluding that iRobot has a modest market power.

The US Federal Trade Commission has been eyeing the transaction since September 2022 over competition concerns and critiques by privacy activists that the deal would give Amazon too much control over the smart-home device market and valuable data about American’s homes.

Failure to remedy the European Commission’s concerns could mean that Amazon’s deal for iRobot faces the same fate as Booking Holdings Inc.’s €1.6 billion ($1.7 billion) deal for Sweden’s Etraveli Group, which was blocked by the EU in September. More recently, the EU raised concerns over Adobe Inc.’s $20 billion buyout of Figma Inc.

The commission currently has a deadline of Feb. 14 to decide whether to approve the iRobot deal with concessions, or to block it.

--With assistance from Spencer Soper and Leah Nylen.

(Updated with iRobot CEO comment in sixth paragraph.)

UPDATE 1-EU antitrust regulators say Amazon's iRobot deal may restrict competition

Mon, November 27, 2023 at 11:27 AM MST·1 min read

By Foo Yun Chee
https://finance.yahoo.com/news/1-eu-antitrust-regulators-amazons-182728199.html

BRUSSELS, Nov 27 (Reuters) - EU antitrust regulators said on Monday Amazon's $1.4 billion acquisition of robot vacuum maker iRobot may squeeze out rival robot cleaners on its online marketplace.

Amazon announced the deal in August last year amid increased regulatory scrutiny around the world of Big Tech acquiring smaller rivals and accumulating troves of data that could boost their market dominance or help them expand into other markets.

"Amazon may have the ability and the incentive to foreclose iRobot's rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs on Amazon's online marketplace and/or at degrading their access to it," the European Commission said in a statement.

The EU competition enforcer said Amazon's online marketplace is an important channel for robot vacuum cleaners (RVCs) in France, Germany, Italy and Spain.

It sent a statement of objections to the company detailing its concerns. While such a charge sheet puts pressure on companies to offer remedies, they also give companies the chance to better address specific issues and even secure unconditional clearance.

Amazon said it was working with the Commission to address its concerns.

"iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products. We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers," the company said.

Amazon can request a closed door hearing to argue its case.

Reuters reported last week that the deal would win unconditional clearance. The Commission's deadline for a decision is Feb. 14. (Reporting by Foo Yun Chee; editing by David Evans)

So, it hasn't been approved yet, it's just expected to be approved?

Market Chatter: Amazon.com to Receive Unconditional EU Approval for iRobot Deal
6:06 AM ET, 11/24/2023 - MT Newswires
06:06 AM EST, 11/24/2023 (MT Newswires) -- Amazon.com (AMZN) is poised to receive unconditional EU antitrust approval for its proposed acquisition of iRobot (IRBT), Reuters reported Thursday, citing unnamed sources with knowledge of the matter.

The European Commission, the bloc's competition watchdog, is expected to decide on the $1.4 billion deal by Feb. 14, after warning Amazon in July that the agreement could reduce competition in robot vacuum cleaners and bolster the company's dominant position as an online marketplace provider, Reuters reported.

The European Commission declined to comment on the news in an emailed statement sent to MT Newswires. Amazon and iRobot did not immediately respond to requests for comment by MT Newswires.

Amazon shares were up 0.2% and iRobot shares were up nearly 34% in premarket activity Friday.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

$IRBT iRobot shares soar on report Amazon deal is set to win EU approval
https://finance.yahoo.com/news/irobot-shares-soar-report-amazon-064612747.html

Right! $51.75/share

Amazon to win unconditional EU nod for iRobot deal: sources

(The original article)

Thu, November 23, 2023 at 2:45 AM MST·1 min read

https://finance.yahoo.com/news/exclusive-eu-approve-amazons-irobot-094503258.html

BRUSSELS (Reuters) — Amazon (AMZN) is set to win unconditional EU antitrust approval for its $1.4 billion acquisition of robot vacuum maker iRobot, three people familiar with the matter said on Thursday.

Antitrust enforcers around the world have stepped up scrutiny of Big Tech acquiring smaller rivals, concerned about the accumulation of troves of data by a few companies and big players leveraging their dominance into new markets.

The European Commission, which acts as the EU's competition watchdog, warned Amazon in July that the deal could reduce competition in robot vacuum cleaners and reinforce the U.S. company's dominant position as an online marketplace provider.

The Commission, which is due to decide on the deal by Feb. 14, declined to comment. Amazon did not respond immediately to a request for comment.

The UK antitrust agency cleared the deal unconditionally after a preliminary review.

(Reporting by Foo Yun CheeEditing by Mark Potter and David Goodman)

Was that at $51.75 per share?

Exclusive: Amazon to win unconditional EU nod for iRobot deal -sources
iRobot takeover going through

EU regulators set new Feb 14 deadline on Amazon/iRobot deal
Reuters
Mon, October 30, 2023 at 4:41 AM MDT·
https://finance.yahoo.com/news/eu-regulators-set-feb-14-104127001.html

PARIS (Reuters) - European Union (EU) antitrust regulators will decide by February 14 next year on whether to clear Amazon's $1.4 billion acquisition of robot vacuum maker iRobot, according to a regulatory filing.

In August, the EU's competition enforcer temporarily halted its investigation into the deal while it awaited more information. Its previous deadline for its decision on the deal was December 13.

The EU's competition watchdog has previously warned Amazon that the deal may reduce competition in robot vacuum cleaners and also reinforce the U.S. company's dominant position as an online marketplace provider.

Big ideas, bold decisions.

In July, Amazon cut the price it would pay for iRobot by about 15% to around $1.42 billion after iRobot, which makes Roomba vacuum cleaners, incurred more debt.

bought some 41.80 for a bounce

Amazon $AMZN and iRobot $IRBT announced they have agreed to amend the existing terms of their merger agreement

Under the new terms, Amazon will pay $51.75 per share revised down from $61.00 per shareAmazon $AMZN and iRobot $IRBT announced they have agreed to amend the existing terms of their merger agreement

Under the new terms, Amazon will pay $51.75 per share revised down from $61.00 per share

$irbt 41.40

Does this close by the end of the year? I can use the cash.

Amazing product growth should continue

Nice day, I-Robot !!

Cleaning up !!!!

$$ IRBT $$

Pulling back a bit, started a small position.

The companies growth has been impressive.

Kind of quiet here lately, anyone still watching this one?

Back over $55 soon.

$IRBT

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Got this from IRBT - About to Buy Penny Stocks? Look at These 3 Companies First

Did you add more?

Anybody home here

Nice gain!! :)

Just bought 17 more at 61.20 averaging my 86 shares to $72 each

69 shares Averaged @ $75.77 not bad

Last month I had 6 IRBT shares and I felt good about it. Now I’m sitting at 64 shares and feel GREAT! My position for 35 of em is averaged at $68 per share and 34 of em are averaged at $83 a share.

iRobot (IRBT -3.18%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James with a 12-month target price of $75.

Perfect chance for me to jump in.

$IRBT is not going to dive any lower.