Buy: Symbion Health

The ACCC (Australian Competition Commission) approved the merger of Symbion Health (SYB.AX) and Healthscope (HSP.AX) today. Yet Symbion's share price is languishing below the implied value post takeover. Healthscope's price would have to fall considerably to make Symbion's current price a fair value. I guess people are concerned about just that and whether the whole deal will fall through in the current credit constrained environment. Another potentially disturbing factor is the stake that Primary (PRY.AX) has been building in Symbion. Anyway, I decided to do a bit of merger arbitrage and double my position in Symbion. At this point this is shaping up to be my worst month in terms of investment return since April 2005 when I suffered an 8.6% loss. That event got me to be more proactive again in investing in trading after letting things ride for a while. It was a great ride in the two years up to that point but this loss was a reminder that risk hadn't gone away. Apart from the generally negative direction of the markets I am being hit by the fall in the Australian Dollar and by the debacle in quantitative long-short fund strategies which is affecting several of my holdings directly or indirectly. In Australian Dollar terms this month is not particularly bad so far (but still negative).