Arbitrage premium now approaching 6.5%. ANSS Stock is up 21+% in just over 2 months.
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Looks like this deal may be caught up in the China-US trade war.
Market Chatter: Synopsys-Ansys Deal Approval Postponed by China Antitrust Regulator
MT Newswires
5:36 AM ET Jun-13-2025
05:36 AM EDT, 06/13/2025 (MT Newswires) – China’s State Administration for Market Regulation has postponed its approval of a proposed merger between Synopsys (SNPS.NaE) and Ansys (ANSS.NaE) , the Financial Times reported, citing two people with knowledge of the matter.
The deal had already entered the last stage of the antitrust regulator’s approval process and was likely to be completed by the end of June, the unnamed sources told the publication.
The delay comes amid a recent decision by the White House to ban chip design software sales by US companies, including Synopsys (SNPS.NaE), to China, according to the report.
The deal approval could still come through if Synopsys (SNPS.NaE) can submit solutions that address the SAMR’s concerns, the FT reported, citing a person familiar with the matter.
Another source reportedly said that the extended approval timeline stems from the deal’s complexity rather than direct links to the ongoing trade war.
Synopsys (SNPS.NaE) and Ansys (ANSS.NaE) did not immediately respond to MT Newswires’ requests for comment.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
I like that last sentence…
Ooh, that’s a real snag!
Thankfully, the lesson was learned prior to pulling the trigger. The lesson being to evaluate the stocks on a standalone basis and be comfortable with them individually even if the deal didn’t close.
So far so good. ANSS is at the same level it was in January. SNPS is maybe 4% lower, but I believe this has more to do with restrictions placed on its activities in China than the deal being held up. A different reason, but still related to the trade war.
Vinnie G
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Arb premium is still around 6.75% - not much change from before the news broke.
Good news, bad news…
China has approved the deal and the arb premium is near nothing as of this morning.
However, analysts’ expectations of FCF have been cut substantially to the point where I am not sure I want to watch this play out. My reverse DCF model now says the stock price today assumes over 30% FCF growth in the near term and upper 20s growth thereafter over the next 10 years.
Sheesh.
Vinnie g
PS - Sold all my SNPS and ANSS at the close
Bumping this to see what’s going on over here. Monroe is getting back down close to 11.
Vinnie G
I’m just waiting for TFSL to go back down to buy price so I can load up again.
We have a couple new thrift IPOs being announced last month. They won’t come out into the new year, though.
I’m still trying to find a split-off transaction this year (like the Cummins-Atmus one last year)
Jim
I have been sitting on the sidelines as well and it looks bleak for a drop any time soon, no? Maybe if Stefanski updates his picture in the next quarterly report?
Vinnie G
Oh, we’ve seen it cycle between, say $12.50 and $14 a fair bit over the last few years. I just sit and wait for it.
Jim
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With rate cuts maybe coming, wouldn’t it seek a new higher range? The dividend really represents the total return of this stock for the most part. When rates were lower years ago, it traded in the 17-20 range. Or is that faulty reasoning?
What if the lower rates are coming because of economic troubles? What happens to their loan book in such environment? How much provisions they have to make, how much will be the write-off???
It’s not unreasonable to think that lower rates lead to a higher stock price, all else equal. But a weakened economy may lead to loan losses, etc etc. We did see them hit $21+ in 2021.
Jim
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