The Fresh Market Inc (TFM)

[Wildbilly]

You can get more than $28 if you sell now

$28.33 to be precise. This should help explain the deal.

Merger arbitrage
In merger arbitrage, an investor generally buys the stock of the company being acquired, short sells the relevant ratio of the acquirer’s stock if applicable, and waits for the deal to close. When the merger is complete, the investor exchanges the stock of the company being acquired for the amount agreed on in the deal.



Big deal in the consumer sector

On March 15, 2016, Apollo (APO) and The Fresh Market (TFM) announced that Apollo will buy The Fresh Market in a $1.3 billion deal. The deal will be a cash transaction set at $28.50 per share.

The companies expect it to close in 2H16. The deal is structured as a cash tender offer. Typically, a cash tender offer closes much quicker than deals that require a vote. There isn’t a need to get a proxy statement through the U.S. Securities and Exchange Commission. Also, there isn’t a waiting period after the mailing. Basically, the companies need to get approval under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, commence a tender offer period, and then close the deal if the minimum threshold is met.

The spread is trading at $0.19 gross or about 0.67%. If you annualize the spread out to a two or 2.5-month timeline, the spread is trading at 3.2%. This is a relatively narrow spread. The Fresh Market is allowed a 21-day “go-shop” period to solicit other bids.

Apollo Buys The Fresh Market in a $1.3 Billion Cash Tender Offer - Yahoo Finance
http://finance.yahoo.com/news/apollo-buys-fresh-market-1-110820022.html