We explore the performance of risk arbitrage involving three types of merger offers: cash tender, stock swap, and collar offers for the period between 1990 and 2000. Our result reveals that risk arbitrage for a successful stock offer generates higher returns than a successful cash offer. This finding implies that the profitability of risk arbitrage depends on the level of asymmetric information associated with the payment method. We also find that the beta of typical risk arbitrage positions/portfolios is heavily influenced by the payment method and market conditions.