(Bloomberg) -- Traders are on edge about the outcome of Amazon.com Inc.’s proposed takeover of iRobot Corp. after a competition warning from Europe’s antitrust watchdog cast doubts on the deal’s path to closing.

The robot-vacuum maker’s stock was whipsawed this week and now trades around $35, more than 30% below Amazon’s $51.75-per-share offer Tuesday. The European Commission in Brussels smashed hopes for a straightforward approval in the region — initially reignited by a Reuters report — after issuing a so-called statement of objections. 

The outlook for iRobot without an Amazon deal is bleak — an informal poll of a half-dozen merger arbitrage specialists values the company at $5 to $12 a share on its own. That suggests the market is assigning a roughly 55% to 65% chance of a deal getting done, according to Bloomberg calculations based on Tuesday’s trading. 

The indebted Roomba maker has seen revenue stall this year following a pandemic boom. The stock has been on a downward trajectory since July, when iRobot agreed on a lower offer price after getting fresh financing. The deal spread — or the gap between the robot-vacuum maker’s stock price and Amazon’s offer — narrowed to around $10 on Friday after the Reuters report suggested an easier review but has since widened to more than $16 after the EC’s warning.

Arb traders said it is particularly hard to determine iRobot’s standalone value as the business continues to deteriorate the longer the review drags on. The stock could face liquidity issues if the merger is blocked, further obscuring how to wager on the deal opportunity, some said.

IRobot didn’t immediately respond to requests for comment.

Read more: Amazon $1.4 Billion iRobot Deal Gets EU Competition Warning

While the European regulator’s warning is not a final decision and could be addressed with remedies proposed by the companies, some traders are concerned it raises the likelihood of the Federal Trade Commission challenging the deal in the US. The US agency’s probe into the transaction since last year over competition concerns is the main risk. Meanwhile, the FTC is pursuing a separate antitrust lawsuit against Amazon accusing the retailer of dominating the online marketplace. 

Read more: What You Won’t Learn About Amazon From FTC’s New Antitrust Suit

The European Commission currently has a deadline of Feb. 14 to decide whether to approve the deal with concessions or to block it. Elsewhere, the UK watchdog has cleared the merger in June.  

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