Liquidity & Float Impact
The merger is now backed by well‑above the 57 % threshold—over 90 % of the 63 % of 180 Degree’s outstanding shares have voted in favour. Once the business combination closes (likely in the next 4‑6 weeks), the 180 D share structure will be re‑engineered: the target’s shares will be exchanged for the combined‑entity securities, and a portion of the existing float will be cancelled or transferred into a new corporate vehicle. Historically, SP‑AC‑type deals see a 10‑15 % contraction of the public float as holders of tender‑offer shares are forced out of the market and the surviving entity’s shares are listed on a single exchange.
In the short term this contraction will tighten daily trading volume and raise the bid‑ask spread, especially if a lock‑up period is imposed on insiders and the sponsor’s stake. The immediate effect is usually a price premium on the tender‑offer, followed by a modest sell‑off as the float shrinks and the market digests the new supply dynamics. For traders, the window of heightened volatility is the announcement‑to‑closing window; a buy‑the‑rumor approach can capture the premium, while a sell‑the‑news play may be appropriate once the tender is executed and the float settles at a lower level.
Actionable Take‑aways
- Monitor the tender‑offer filing – the exchange‑specified exchange‑ratio will set the effective premium and dictate how many 180 D shares will be retired.
- Expect a 10‑15 % reduction in float – this will compress liquidity, so position sizes should be modest to avoid slippage.
- Short‑term bias: bullish on the premium capture but prepare for a post‑closing pull‑back as the reduced float and higher spread pressure the price downward. A tight‑‑range, low‑‑volatility stop‑loss (≈ 2‑3 % below the tender price) can protect against the anticipated sell‑off.
Overall, the merger will likely shrink the tradable float, tighten liquidity, and create a brief period of elevated volatility that can be exploited with disciplined, short‑duration trades.