Microsoft-Activision Trial Has Merger Arbitragers Glued to Court

Among the lawyers, litigants and spectators who packed into a San Francisco courtroom last month for a hearing on the fate of the biggest video gaming deal ever was another breed altogether: the merger arbitrager.

Portfolio managers and analysts from a handful of top investment firms, as well as specialized brokers who bet on whether mergers will go through, flew in from New York and Chicago. They were there to watch for signs — a grimace from the judge, a goof by a key witness — that the US Federal Trade Commission would succeed or fail in its bid to ...