Merger Arbitrage Mondays – May 8, 2017

Merger activity increased last week with eight new deals announced and two deals closing. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There was one new deal announced in the Deals in the Works section.

In case you missed them, I wrote three articles over the last year that cover various aspects of the merger arbitrage strategy including the rate of success over a period of seven years, the effect of deal delays and analysis of failed mergers to determine why they failed. You can find them at the following links,

Deal Statistics:

Total Number of Deals Closed in 2017 70
Total Number of Deals Not Completed in 2017 3
Total Number of Pending Deals
Cash Deals 54
Stock Deals 20
Stock & Cash Deals 12
Special Conditions 10
Total Number of Pending Deals 96
Total Deal Size $740.49 billion

New Deals:

  1. The acquisition of Jive Software (JIVE) by ESW Capital for $462 million or $5.25 per share in cash.
  2. The acquisition of ASB Bancorp (ASBB) by First Bancorp (FBNC) for $175 million in a cash or stock deal. Under the terms of the merger agreement, ASB Bancorp shareholders will receive 1.44 shares of First Bancorp’s common stock or $41.90 in cash, or a combination thereof, for each share of ASB Bancorp common stock. The total consideration will be prorated as necessary to ensure that 90% of the total outstanding shares of ASB Bancorp common stock will be exchanged for First Bancorp common stock and 10% of the total outstanding shares of ASB Bancorp common stock will be exchanged for cash.
  3. The acquisition of Span-America Medical Systems (SPAN) by Savaria Corporation for $80.2 million or $29.00 per share in cash.
  4. The acquisition of Angie’s List (ANGI) by IAC/InterActive (IAC) for $331.67 million or $8.50 per share in cash.
  5. The acquisition of OneBeacon Insurance Group (OB) by Intact Financial Corporation for $1.7 billion or $18.10 per share in cash.
  6. The acquisition of Capital Bank Financial (CBF) by First Horizon National (FHN) for $2.2 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Capital Bank Financial will be entitled to receive cash or stock with a value equivalent to 1.750 First Horizon shares and $7.90 in cash for each Capital Bank share held. In the aggregate, Capital Bank shareholders will receive a mix of approximately 80 percent stock and 20 percent cash.
  7. The acquisition of VWR Corporation (VWR) by Avantor for $6.4 billion or $33.25 per share in cash.
  8. Spark Networks (LOV) and Affinitas (“EliteSingles”) announced that they have entered into a definitive agreement to combine in a stock-for-stock merger The combination will create a company with more than $115 million. EliteSingles shareholders will own approximately 75% of the combined company and Spark shareholders will own approximately 25%. We have not added this deal to our database as it will result in the creation of a new company.

Deal Updates:

  1. On May 3, 2017, Straight Path Communications (STRP) announced that the Straight Path Board of Directors determined that a revised offer from a multi-national telecommunications company to acquire 100% of the issued and outstanding shares of Straight Path for $135.96 per share, reflecting an enterprise value of approximately $2.3 billion, which will be paid in Bidder stock in an all-stock transaction constitutes a “Superior Proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with AT&T (T). Straight Path has notified AT&T of the Straight Path Board’s determination and, pursuant to the AT&T Merger Agreement, AT&T has the option for the next three business days to negotiate a possible amendment of that agreement to match or exceed the Bidder’s offer.
  2. On May 3, 2017, Ashford Hospitality Trust (AHT) announced that given FelCor Lodging Trust Incorporated’s (FCH) announced merger agreement with RLJ Lodging Trust (RLJ), Ashford Trust is abandoning its efforts to merge with FelCor.
  3. On May 4, 2017, CIBC (CM) and PrivateBancorp (PVTB) announced that they have entered into a second amendment that increases the cash consideration under the previously amended merger agreement. The revised terms were unanimously approved by both boards of directors. Under the Amended Agreement, PrivateBancorp stockholders will receive, upon completion of the proposed merger with CIBC, an additional US$3.00 in cash for each share of common stock of PrivateBancorp held, which consideration in the aggregate will be equal to US$27.20 in cash and 0.4176 of a CIBC common share for each share of common stock of PrivateBancorp held.
  4. On May 4, 2017, Great Plains Energy Incorporated (GXP) and Westar Energy (WR) announced that they have filed a Petition for Reconsideration with the Kansas Corporation Commission regarding its April 19, 2017, Order denying approval of Great Plains Energy’s acquisition of Westar.
  5. On May 5, 2017, Syngenta (SYT) announced that its shareholders accepted ChemChina’s offer to acquire Syngenta.

Closed Deals:

  1. The acquisition of Isle of Capri Casinos (ISLE) by Eldorado Resorts (ERI) on May 1, 2017. It took 224 day for this deal to be completed.
  2. The acquisition of Stillwater Mining Company (SWC) by Sibanye Gold Limited (SBGL) on May 4, 2017. It took 146 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $6.50 $4.11 07/31/2017 58.15% 252.68%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.79 06/30/2017 43.27% 298.00%
LSCC 11/03/2016 Canyon Bridge Capital Partners, Inc. (N/A) $8.30 $6.69 06/30/2017 24.07% 165.74%
WR 05/31/2016 Great Plains Energy Incorporated (GXP) $60.00 $52.52 06/30/2017 14.24% 98.08%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $116.20 12/31/2017 10.15% 15.64%
CAB 10/03/2016 Bass Pro Shops (N/A) $61.50 $56.20 09/30/2017 9.43% 23.74%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $98.37 12/31/2017 9.28% 14.29%
MBVT 10/24/2016 Community Bank System Inc. (CBU) $55.24 $50.70 05/12/2017 8.95% 816.69%
SGBK 03/27/2017 Home Bancshares, Inc. (HOMB) $49.00 $45.39 12/31/2017 7.95% 12.25%
ADGE 11/02/2016 Tecogen Inc. (TGEN) $0.34 $0.3162 06/30/2017 7.07% 48.70%

List of all pending deals:

  Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing
Date
Profit Annu.
Profit
+ RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) All Cash $17.2 billion $6.50 $4.11 13,170,560 07/31/2017 58.15% 252.68%
+ GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) All Cash $2.7 billion $5.43 $3.79 2,393,037 06/30/2017 43.27% 298.00%
+ LSCC 11/03/2016 Canyon Bridge Capital Partners, Inc. (N/A) All Cash $1.3 billion $8.30 $6.69 318,132 06/30/2017 24.07% 165.74%
+ WR 05/31/2016 Great Plains Energy Incorporated (GXP) Special Conditions $12.2 billion $60.00 $52.52 720,197 06/30/2017 14.24% 98.08%
+ MON 09/14/2016 Bayer AG (BAYRY) All Cash $66 billion $128.00 $116.20 1,693,989 12/31/2017 10.15% 15.64%
+ CAB 10/03/2016 Bass Pro Shops (N/A) All Cash $5 billion $61.50 $56.20 399,683 09/30/2017 9.43% 23.74%
+ TWX 10/22/2016 AT&T, Inc. (T) Special Conditions $108.7 billion $107.50 $98.37 3,184,426 12/31/2017 9.28% 14.29%
+ MBVT 10/24/2016 Community Bank System Inc. (CBU) All Stock $304 million $55.24 $50.70 14,118 05/12/2017 8.95% 816.69%
+ SGBK 03/27/2017 Home Bancshares, Inc. (HOMB) Special Conditions $778.4 million $49.00 $45.39 303,495 12/31/2017 7.95% 12.25%
+ ADGE 11/02/2016 Tecogen Inc. (TGEN) All Stock $20 million $0.34 $0.3162 19,952 06/30/2017 7.07% 48.70%
+ FBRC 02/21/2017 B. Riley Financial, Inc. (RILY) Cash Plus Stock $160.1 million $18.10 $16.95 38,050 06/30/2017 6.76% 46.53%
+ AMFW 03/13/2017 John Wood Group Plc (WG.L) All Stock $4.3 billion $7.37 $6.91 27,377 12/31/2017 6.59% 10.14%
+ WGL 01/25/2017 AltaGas Ltd. (N/A) All Cash $6.4 billion $88.25 $82.90 183,969 06/30/2018 6.45% 5.64%
+ GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) All Cash $1.3 billion $5.10 $4.80 346,193 12/31/2017 6.25% 9.63%
+ XCRA 04/10/2017 an affiliate of Sino IC Capital and Unic Capital Management (N/A) All Cash $439.97 million $10.25 $9.79 453,499 12/31/2017 4.70% 7.24%
+ LVLT 10/31/2016 CenturyLink, Inc. (CTL) Cash Plus Stock $34 billion $60.21 $57.64 3,766,972 09/30/2017 4.47% 11.25%
+ MGI 01/26/2017 Ant Financial Services Group (N/A) All Cash $1.2 billion $18.00 $17.30 666,317 12/31/2017 4.05% 6.23%
+ EGAS 10/11/2016 First Reserve Energy Infrastructure (N/A) All Cash $196 million $13.10 $12.625 30,491 12/31/2017 3.76% 5.79%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.3 billion $51.00 $49.16 2,960,662 09/30/2017 3.74% 9.42%
+ ASBB 05/01/2017 First Bancorp (FBNC) All Stock $175 million $43.16 $41.60 13,187 12/31/2017 3.74% 5.76%
+ NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) All Cash $38 billion $110.00 $106.58 2,511,602 12/31/2017 3.21% 4.94%
+ RBPAA 01/30/2017 Bryn Mawr Bank Corporation (BMTC) All Stock $127.7 million $4.35 $4.22 26,524 09/30/2017 2.99% 7.52%
+ BCR 04/23/2017 Becton, Dickinson and Company (BDX) Cash Plus Stock $24 billion $317.06 $308.05 905,415 11/30/2017 2.92% 5.18%
+ AKRX 04/24/2017 Fresenius Kabi (N/A) All Cash $4.75 billion $34.00 $33.08 3,227,268 03/31/2018 2.78% 3.10%
+ MBLY 03/13/2017 Intel Corporation (INTC) All Cash $14.7 billion $63.54 $61.90 1,435,050 12/31/2017 2.65% 4.08%
+ ANCB 04/11/2017 Washington Federal, Inc. (WAFD) Special Conditions $63.9 million $25.75 $25.10 1,282 09/30/2017 2.59% 6.52%
+ CUNB 04/06/2017 PacWest Bancorp (PACW) Cash Plus Stock $705 million $38.70 $37.80 122,771 12/31/2017 2.39% 3.69%
+ DGI 02/24/2017 MacDonald, Dettwiler and Associates Ltd. (MDA.TO) Cash Plus Stock $3.6 billion $32.55 $31.80 290,539 12/31/2017 2.35% 3.62%
+ SAJA 04/26/2017 AMPLEXOR International SA (N/A) All Cash 28.5 million $5.83 $5.70 56,348 07/31/2017 2.28% 9.91%
+ OKSB 12/14/2016 Simmons First National Corporation (SFNC) Cash Plus Stock $564.4 million $26.40 $25.85 71,291 09/30/2017 2.13% 5.36%
+ DGAS 02/21/2017 Peoples Natural Gas (N/A) All Cash $227 million $30.50 $29.90 5,662 12/31/2017 2.01% 3.09%
+ CBF 05/04/2017 First Horizon National Corp. (FHN) Cash Plus Stock $2.2 billion $40.21 $39.45 1,176,733 12/31/2017 1.93% 2.98%
+ FRP 12/05/2016 Consolidated Communications Holdings, Inc. (CNSL) All Stock $1.5 billion $16.56 $16.25 146,353 06/30/2017 1.93% 13.29%
+ AWH 12/18/2016 Fairfax Financial Holdings Limited (FFH.TO) Special Conditions $4.9 billion $54.00 $53.01 196,211 06/30/2017 1.87% 12.86%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $17.96 $17.65 211,489 06/30/2017 1.74% 11.95%
+ PCBK 01/09/2017 Columbia Banking System, Inc. (COLB) All Stock $644.1 million $25.83 $25.40 70,134 06/30/2017 1.69% 11.64%
+ NVET 04/13/2017 Zoetis Inc. (ZTS) All Cash $26.93 million $6.72 $6.61 7,719 12/31/2017 1.66% 2.56%
+ FCH 04/24/2017 RLJ Lodging Trust (RLJ) All Stock $2.58 billion $7.79 $7.67 1,268,100 12/31/2017 1.61% 2.49%
+ FCFP 02/06/2017 First Busey Corporation (BUSE) Cash Plus Stock $235.8 million $13.30 $13.10 13,723 06/30/2017 1.51% 10.37%
+ PBNC 04/27/2017 TowneBank (TOWN) All Stock $323.7 million $54.68 $53.90 6,177 12/31/2017 1.45% 2.24%
+ BRCD 11/02/2016 Broadcom Limited (AVGO) All Cash $5.5 billion $12.75 $12.57 2,619,561 10/31/2017 1.43% 2.97%
+ INVN 12/21/2016 TDK Corporation (TTDKY) All Cash $1.3 billion $13.00 $12.83 12,447,084 09/30/2017 1.33% 3.34%
+ PVTB 06/29/2016 Canadian Imperial Bank of Commerce (CM) Cash Plus Stock $4.9 billion $60.43 $59.65 2,959,681 06/30/2017 1.30% 8.99%
+ MJN 02/10/2017 Reckitt Benckiser Group (N/A) All Cash $17.9 billion $90.00 $88.85 1,629,711 09/30/2017 1.29% 3.26%
+ NORD 04/25/2017 Canada Pension Plan Investment Board and Baring Private Equity Asia (N/A) All Cash $4.3 billion $32.50 $32.10 213,192 08/31/2017 1.25% 3.96%
+ ZPIN 04/06/2017 SEEK International Investments Pty Ltd. (N/A) All Cash $678.59 million $18.20 $17.94 21,138 12/31/2017 1.17% 1.80%
+ AIQ 04/11/2017 Tahoe Investment Group Co., Ltd. (N/A) All Cash $682 million $13.25 $13.10 33,750 09/30/2017 1.15% 2.88%
+ WOOF 01/07/2017 Mars, Incorporated (N/A) All Cash $9.1 billion $93.00 $91.95 598,936 09/30/2017 1.14% 2.87%
+ SWFT 04/10/2017 Knight Transportation, Inc. (KNX) All Stock $3.24 bilion $24.44 $24.17 827,582 09/30/2017 1.13% 2.85%
+ AF 03/07/2017 Sterling Bancorp (STL) All Stock $2.2 billion $20.65 $20.42 371,996 12/31/2017 1.13% 1.73%
+ NSR 12/14/2016 private investment group led by Golden Gate Capital (N/A) All Cash $2.9 billion $33.50 $33.15 809,850 09/30/2017 1.06% 2.66%
+ PSTB 04/27/2017 South State Corporation (SSB) All Stock $690.8 million $12.32 $12.20 285,343 12/31/2017 0.98% 1.51%
+ GTWN 10/06/2016 Salem Five Bancorp (N/A) All Cash $49.2 million $26.00 $25.75 4 06/30/2017 0.97% 6.69%
+ SGM 01/26/2017 Home Point Financial Corporation (N/A) All Cash $211 million $8.00 $7.93 31,267 06/30/2017 0.88% 6.08%
+ FIG 02/14/2017 SoftBank Group Corp. (SFTBY) All Cash $3.3 billion $8.08 $8.01 1,072,910 12/31/2017 0.87% 1.35%
+ SNOW 04/10/2017 An entity controlled by affiliates of the Aspen Skiing Compan and KSL Capital Partners (N/A) All Cash $1.5 billion $23.75 $23.56 366,666 09/30/2017 0.81% 2.03%
+ LMOS 02/20/2017 EQT Infrastructure investment strategy (N/A) All Cash $950 million $18.00 $17.87 98,875 09/30/2017 0.73% 1.83%
+ FOR 04/13/2017 affiliates of Starwood Capital Group (N/A) All Cash $442.77 million $14.25 $14.15 481,795 09/30/2017 0.71% 1.78%
+ OKS 02/01/2017 ONEOK, Inc. (OKE) All Stock $17.2 billion $49.88 $49.54 1,490,711 06/30/2017 0.69% 4.73%
+ LMIA 02/17/2017 Sonaca Group (N/A) All Cash $381.47 million $14.00 $13.91 56,103 06/30/2017 0.65% 4.46%
+ PNRA 04/05/2017 JAB (N/A) All Cash $7.5 billion $315.00 $313.16 218,304 09/30/2017 0.59% 1.48%
+ ALJ 01/03/2017 Delek US Holdings, Inc. (DK) All Stock $1.27 billion $12.11 $12.05 471,061 06/30/2017 0.51% 3.49%
+ KCG 04/20/2017 Virtu Financial, Inc. (VIRT) All Cash $1.56 billion $20.00 $19.90 380,471 09/30/2017 0.50% 1.26%
+ SYT 02/03/2016 ChemChina (N/A) All Cash $43 billion $93.95 $93.50 848,600 06/30/2017 0.48% 3.31%
+ VAL 03/20/2016 The Sherwin-Williams Company (SHW) All Cash $11.3 billion $113.00 $112.48 555,247 06/21/2017 0.46% 3.84%
+ SALE 04/10/2017 Harland Clarke Holdings Corp. (N/A) All Cash $216 million $11.60 $11.55 412,700 06/30/2017 0.43% 2.98%
+ SYUT 11/17/2016 Beams Power Investment Limited (N/A) All Cash N/A $6.05 $6.025 92,967 05/31/2017 0.41% 6.58%
+ CST 08/22/2016 Alimentation Couche-Tard Inc. (N/A) All Cash $4.4 billion $48.53 $48.39 286,706 06/30/2017 0.29% 1.99%
+ TRR 03/31/2017 New Mountain Capital (N/A) All Cash $438 million $17.55 $17.50 85,231 06/30/2017 0.29% 1.97%
+ UTEK 02/02/2017 Veeco Instruments Inc. (VECO) Cash Plus Stock $550 million $30.55 $30.47 261,958 06/30/2017 0.27% 1.83%
+ WNR 11/17/2016 Tesoro Corporation (TSO) All Stock $6.4 billion $35.17 $35.09 736,826 06/30/2017 0.24% 1.65%
+ ELOS 04/03/2017 Funds advised by Apax Partners (N/A) All Cash $319.66 million $11.00 $10.975 204,405 06/30/2017 0.23% 1.57%
+ XRA 03/28/2017 Goldcorp Inc. (GG) All Stock $184.45 $1.63 $1.63 268,355 06/30/2017 0.20% 1.35%
+ MPSX 01/24/2017 WestRock Company (WRK) All Cash $2.28 billion $18.00 $17.97 126,206 06/30/2017 0.17% 1.15%
+ EXAR 03/29/2017 MaxLinear, Inc. (MXL) All Cash $472 million $13.00 $12.98 480,365 06/30/2017 0.15% 1.06%
+ SPAN 05/01/2017 Savaria Corporation (N/A) All Cash $80.2 million $29.00 $28.96 25,797 06/30/2017 0.14% 0.95%
+ EVBS 12/13/2016 Southern National Bancorp of Virginia, Inc. (SONA) All Stock $178.3 million $11.33 $11.32 7,026 06/30/2017 0.05% 0.34%
+ SBY 02/27/2017 Tricon Capital Group Inc. (N/A) All Cash $1.4 billion $21.50 $21.49 1,440,463 06/30/2017 0.05% 0.32%
+ HW 11/20/2016 Boral Limited (N/A) All Cash $2.6 billion $24.25 $24.24 2,037,560 06/30/2017 0.04% 0.28%
+ UCP 04/11/2017 Century Communities, Inc. (CCS) Cash Plus Stock $336 million $11.45 $11.45 37,589 09/30/2017 0.00% 0.01%
+ EVER 08/08/2016 TIAA (N/A) All Cash $2.5 billion $19.50 $19.50 559,631 06/30/2017 0.00% 0.00%
+ ERS 03/31/2017 A unit of Ta Chen Stainless Pipe Co., Ltd. (N/A) All Cash $160.57 million $7.00 $7.00 16,298 06/30/2017 0.00% 0.00%
+ MOCO 04/17/2017 AMETEK, Inc. (AME) All Cash $182 million $30.00 $30.00 17,323 09/30/2017 0.00% 0.00%
+ BNCN 01/23/2017 Pinnacle Financial Partners, Inc. (PNFP) All Stock $1.9 billion $33.53 $33.55 82,854 09/30/2017 -0.06% -0.15%
+ VWR 05/05/2017 Avantor (N/A) All Cash $6.4 billion $33.25 $33.28 17,111,992 09/30/2017 -0.09% -0.23%
+ CFCB 01/26/2017 Midland States Bancorp, Inc. (MSBI) Special Conditions $175.1 million $26.75 $26.89 10,440 06/30/2017 -0.52% -3.59%
+ APFH 04/25/2017 Tyson Foods, Inc. (TSN) All Cash $4.2 billion $40.25 $40.49 383,084 07/01/2017 -0.59% -4.01%
+ OB 05/02/2017 Intact Financial Corporation (N/A) All Cash $1.7 billion $18.10 $18.22 406,887 12/31/2017 -0.66% -1.01%
+ GNVC 01/24/2017 Intrexon Corporation (XON) All Stock $6.3 million $6.11 $6.15 12,847 06/30/2017 -0.66% -4.56%
+ JIVE 05/01/2017 ESW Capital, LLC (N/A) All Cash $462 million $5.25 $5.30 563,241 06/30/2017 -0.94% -6.50%
+ NSAT 03/27/2017 Hytera Project Corp. (N/A) All Cash $62 million $10.25 $10.50 15,946 06/30/2017 -2.38% -16.40%
+ GNCMA 04/04/2017 Liberty Ventures (LVNTA) Special Conditions $2.68 billion $32.50 $36.61 256,524 06/30/2017 -11.23% -77.31%
+ INNL 04/04/2017 Gurnet Point L.P. (N/A) Special Conditions $209 million $1.75 $2.13 508,354 06/30/2017 -17.84% -122.86%
+ ANGI 05/02/2017 IAC/InterActiveCorp (IAC) Special Conditions $331.67 million $8.50 $10.71 2,943,260 12/31/2017 -20.63% -31.78%
+ RAI 01/17/2017 British American Tobacco p.l.c. (BTI) Cash Plus Stock $49.4 billion $47.49 $64.77 4,160,944 09/30/2017 -26.68% -67.16%
+ STRP 04/10/2017 AT&T Inc. (T) Special Conditions $1.6 billion $95.63 $161.49 412,714 03/31/2018 -40.78% -45.52%

Disclaimer: I hold positions in Cabela’s (CAB), Rite Aid (RAD), Fortress Investment Group (FIG) and NXP Semiconductors (NXPI). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria

Leave A Comment

You must be logged in to post a comment.