How to track merger arbitrage deals, from spreadsheet to system

Every merger arbitrage desk starts in a spreadsheet. It is fast, familiar, and for the first dozen situations it works. The problems begin when the book grows, the team grows, or the regulator asks a question the spreadsheet cannot answer.

What the spreadsheet version looks like

The typical setup is one row per deal: target, acquirer, offer price, current price, spread, expected close. A second tab holds notes. A third holds the positions. It captures the numbers but loses three things that matter:

• History. When terms change, the old value is overwritten. Six months later nobody can reconstruct what the desk believed on the day the position was sized.
• Evidence. The offer document, the regulatory filings, the analyst notes live in inboxes and folders, disconnected from the row they support.
• Consistency. Every analyst computes the spread slightly differently. One includes the dividend, one forgets the withholding tax on it, one annualises over calendar days and one over trading days.

What a deal record actually needs

A live situation is more than a price pair. A usable deal record carries the offer terms (price, dividend treatment, withholding tax), the timeline (announcement, acceptance period, expected settlement), the regulatory path (which merger control and FDI reviews apply, in which jurisdictions, with what deadlines), the assessment (upside, downside, implied probability, expected value), and the documents behind all of it.

The arithmetic should be computed, not typed. Upside from offer terms including dividends and their withholding tax, gross spread, annualised yield, and the implied success probability the market is pricing: if the system computes these the same way every time, the numbers in the Monday meeting are the numbers in the model.

When to move off the spreadsheet

Three signals, any one of which is enough: a second analyst joins and you need shared, reviewable records; a regulator or investor asks for an audit trail; or a stale value costs money, for example an upside that nobody recomputed after the offer was raised.

What the system version looks like

FPM keeps each situation as a structured record with computed assessment math, the regulatory path per jurisdiction, and the documents filed against the deal. Reviews are signed off by name, changes are logged, and the history survives the analyst who wrote it. If that sounds like the step your desk is ready for, start with the merger arbitrage software overview or see how it runs inside your own Microsoft 365 tenant.