Tender Offer Arbitrage in the Stock of Avexis $AVXSHave you subscribed to my podcast yet? If not, you can click the buttons below to subscribe:Main Topic: Tender Offer Arbitrage in the Stock of Avexis $AVXSEpisode 122 is about a currently live arbitrage opportunity in the stock of AveXis, Inc. Hopefully this spread is still available when I release this episode, unlike the spread in Juno Therapeutics that was episode 116.Our goal with arbitrage is to minimize our holding period and to maximize our actual return of 1% or more and a weighted average annualized return of 20% or more. Another goal is to realize at least $100 for every $10,000 invested.On April 6, 2018, AveXis, Inc. announced that they would be acquired by Novartis AG in a tender offer. The deal price would be $218 per share, increasing to $225 per share if the tender offer was extended in certain circumstances.Because there is always a delay between the announcement of the deal, and the start of the tender offer, there was an opportunity to get into this arbitrage before the announcement.After doing my due diligence and filling out my checklist, I started accumulating a position with a spread of around 2.5%.The tender offer commenced on April 17, 2018 and is set to expire May 14, 2018 at midnight.Keep in mind that the last business day to tender your shares will be a full 2 business days before the tender expiration date. In this case, you will have to tender your shares by May 10, 2018.Let's take a look at how the checklist checks out. Remember to DO YOUR OWN DILIGENCE on this deal.checkAll cash consideration - PASS - $218 per share or $225 per sharecheckBig fish swallowing a little fish - PASS - $8B deal price versus $200B Novartis enterprise valuecheckFair price - PASS - Huge premium of 83% in the deal, plus possible upsidecheckLittle fish profitable or valuable - PASS - AVXS is not profitable, but other bidders took part in the process, backstopping the value. checkBoards approved - PASScheckMajor shareholders supportive - PASS - about 11% of the shares outstanding will be voted in favor of the dealcheckLow threshold for a successful tender offer - PASS - 50% threshold and 11% are already voting for the transaction, plus the attractive premium should convince the major fund holders to tender their shares.checkNo financing or abnormal contingencies - PASS - Huge paragraph of events related to the companies research and development products are excluded from a possible Material Adverse Change trigger. Deal has no financing contingencycheckLow risk of regulatory intervention - PASS - The size difference between the entities, the nature of the industry, and other factors lead me to believe the risk of a regulatory block that results in a failed transaction is fairly low.checkLow competition for the stock - FAIL - The bid/ask spread is fairly wide in this stock, so it was not easy to accumulate a large position without moving the stock. checkAt least a 1% actual return and 20% annualized return - PASS - The actual return, at the time of this writing, is about 2.5 - 3.5%, and the annualized return, assuming the tender closes on May 14, is greater than 60%.Here is a link to the tender offer document. Be sure to read everything put out by both companies related to this transaction.https://www.sec.gov/Archives/edgar/data/1114448/000104746918002888/a2235311zex-99_a1a.htmDISCLOSURE - LONG AVXS as an arbitrageAsk JB: Are REITS safe?Dave asks: I am almost 60% invested in a wide variety of high dividend (avg. 6%) REITS. I consider REITS a safe investment because the valuations are relatively low and because dividends would allow me to continue to build my portfolio even if there is a prolonged bear market. The companies have reasonable debt loads and are making money. This is unconventional, but why isn't it safe?JB Says: You will have to listen to the episode to hear my answer!Tax efficient investments vs. tax advantaged accounts (self.