Williams-Energy Transfer, Staples-Office Depot Lead List Of Large M&A Spreads

According to the latest spreads by Sin Letter, there are currently some huge M&A arbitrage opportunities in the market. However, the bigger the spread, the bigger the risk – and a large spread is often an indication of market skepticism that the deal will ultimately go through.

The largest spread in the market Monday is the 171 percent spread in the price of Williams Companies Inc WMB, which agreed to a buyout at $43.50 by Energy Transfer Equity LP ETE, expected to close by the end of June.

Related Link: Has Buyout Rumor Buying Broken Mead Johnson Out Of Its Bearish Trading Pattern?

Clearly, the massive spread indicates that the market has its doubts about the deal’s completion. So far in 2016, there have been 41 M&A deals closed and just two that have been terminated.

The biggest M&A news this past week was the termination of the deal between Vivint Solar Inc VSLR and Sunedison Inc SUNE, originally expected to close by the end of March.

In addition to the Williams-Energy Transfer deal, Staples, Inc. SPLS's potential buyout of Office Depot Inc ODP, Halliburton Company HAL's potential acquisition of Baker Hughes Incorporated BHI, Excelon Corporation EXC’s potential buyout of Pepco Holdings, Inc. POM and Anthem Inc ANTM’s potential deal for CIGNA Corporation CI round out the top five largest M&A spreads in the market currently.

Disclosure: The author is long Halliburton.