This paper explores the performance of risk arbitrage for failed acquisition attempts. We find that the return of a risk arbitrage position for a failed acquisition attempt varies with the payment method and the acquisition type. This finding supports the proposition that the payment method and the acquisition type provide informational signals relevant to both firms ' values and the likelihood of the target receiving competing offers. These signals help explain the performance of a risk arbitrage position for a failed acquisition attempt. We also find that a simple prediction model based on our research may be helpful for those seeking to enhance the returns from their risk arbitrage positions.