Merger Arbitrage Mondays – July 17, 2017

  • July 17, 2017

Merger activity decreased last week with three new deals announced, one deal closing. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2017110
Total Number of Deals Not Completed in 20176
Total Number of Pending Deals
Cash Deals62
Stock Deals20
Stock & Cash Deals13
Special Conditions6
Total Number of Pending Deals101
Total Deal Size$815.67 billion

New Deals:

  1. The acquisition of ClubCorp Holdings (MYCC) by Certain Investment Funds Affiliated with Apollo Global Management for $1.1 billion or $17.12 per share in cash. The ClubCorp Board of Directors also declared a one-time quarterly dividend of $0.13 per share of common stock. The dividend is expected to be paid on July 28, 2017, to shareholders of record at the close of business on July 21, 2017.
  2. The acquisition of Hawaiian Telcom Holdco (HCOM) by Cincinnati Bell (CBB) for $650 million. Under the agreement, Hawaiian Telcom stockholders will have the option to elect either $30.75 in cash, 1.6305 shares of Cincinnati Bell common stock, or a mix of $18.45 in cash and 0.6522 shares of Cincinnati Bell common stock for each share of Hawaiian Telcom, subject to proration such that the aggregate consideration to be paid to Hawaiian Telcom stockholders will be 60 percent cash and 40 percent Cincinnati Bell common stock. We are treating this as a cash plus stock type of deal.
  3. The acquisition of Neff Corporation (NEFF) by H&E Equipment Services (HEES) for $1.2 billion or $21.07 per share in cash. The per share merger consideration payable to Neff stockholders is subject to certain downward adjustments, not to exceed $0.44 per share, in the event that H&E incurs certain increased financing costs due to the transaction not being consummated on or prior to January 14, 2018.

Deal Updates:

  1. On July 10, 2017, The states of Alaska, Colorado, New York and Pennsylvania recently approved CenturyLink’s (CTL) acquisition of Level 3 Communications (LVLT).
  2. On July 10, 2017, Westar Energy (WR) and Great Plains Energy Incorporated (GXP) announced that both companies’ boards of directors have unanimously approved a revised transaction that involves no premium paid or received with respect to either company, no transaction debt, no exchange of cash, and is a stock-for-stock merger of equals, creating a company with a combined equity value of approximately $14 billion. We have removed this deal from our database.
  3. On July 11, 2017,  Merus Labs International (MSLI) announced that at a special meeting of shareholders, Merus shareholders voted in favour of the proposed transaction pursuant to which Norgine B.V. agreed to acquire all of the issued and outstanding common shares of Merus. Subject to obtaining such court approval and the satisfaction or waiver of all other closing conditions, it is anticipated that the Arrangement will be completed on or about July 17, 2017.
  4. On July 11, 2017, shareholders of Cabela’s (CABagreed to be acquired by Bass Pro Shops for $5 billion.
  5. On July 11, 2017, Panera Bread Company (PNRA) announced that at a special meeting, Panera’s stockholders overwhelmingly approved the previously announced merger agreement relating to the proposed transaction between Panera and JAB Holdings. The transaction remains subject to certain closing conditions and is expected to close in July 2017.
  6. On July 12, 2017, Fortress Investment Group (FIG) announced that, at its special meeting of shareholder, the Company’s shareholders had voted, among other things, in favor of the proposal to adopt the previously announced merger agreement pursuant to which certain subsidiaries of SoftBank Group will acquire Fortress.
  7. On July 13, 2017, Genworth Financial (GNW) and China Oceanwide Holdings Group reported that they have withdrawn and re-filed their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS) a second time to provide CFIUS more time to review and discuss the proposed transaction between Genworth and Oceanwide.

Closed Deals:

  1. The acquisition of Kate Spade & Company (KATE) by Coach (COH) on July 11, 2017. It took 64 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
GNW10/23/2016China Oceanwide Holdings Group Co., Ltd. (N/A)$5.43$3.5707/31/201752.10%1358.34%
DEST12/20/2016Orchestra-Premaman S.A. (KAZI.PA)$3.77$2.7810/31/201735.78%123.19%
LSCC11/03/2016Canyon Bridge Capital Partners, Inc. (N/A)$8.30$6.7409/30/201723.15%112.64%
MON09/14/2016Bayer AG (BAYRY)$128.00$117.1012/31/20179.31%20.34%
TWX10/22/2016AT&T, Inc. (T)$107.50$99.7912/31/20177.73%16.89%
MGI01/26/2017Ant Financial Services Group (N/A)$18.00$16.7812/31/20177.27%15.89%
RICE06/19/2017EQT Corporation (EQT)$28.20$26.5012/31/20176.40%13.98%
HUN05/22/2017CLARIANT N (CLN.VX)$28.64$26.9612/31/20176.23%13.62%
SGBK03/27/2017Home Bancshares, Inc. (HOMB)$49.00$46.2512/31/20175.95%13.00%
ATW05/30/2017Ensco plc (ESV)$8.29$7.8609/30/20175.45%26.50%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I hold positions in Staples (SPLS), Whole Foods (WFM), Cabela’s (CAB) and Fortress Investment Group (FIG). 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