Merger Arbitrage Mondays – October 2, 2017

Merger activity decreased last week with three new deals announced and eight 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.

Deal Statistics:

Total Number of Deals Closed in 2017 163
Total Number of Deals Not Completed in 2017 9
Total Number of Pending Deals
Cash Deals 40
Stock Deals 25
Stock & Cash Deals 12
Special Conditions 9
Total Number of Pending Deals 86
Total Deal Size $917.44 billion

New Deals:

  1. The acquisition of Versar (NYSE: VSR and now OTCBB: VSRI) by affiliates of Kingswood Capital Management for $8.14 million or $0.15 per share in cash. The stock used to trade on the NYSE but was delisted after this announcement and so we will be removing it from the MAT. Disappointed investors did not mince words in the question/answer section of the company’s conference call on the day the deal was announced.
  2. The acquisition of Bay Bancorp (BYBK) by Old Line Bancshares (OLBK) for $128.6 million in an all stock deal. Under the terms of the Agreement, each share of Bay Bancorp common stock  will be exchanged for a number of OLB Shares calculated by dividing $11.80 by the volume weighted average closing prices of Old Line Bancshares common stock for the 20 trading days ending five trading days before the closing date of the Merger, subject to a minimum average price of $25.65 and a maximum average price of $29.16 and adjustments for the proceeds recognized in the recent settlement of certain litigation and the resolution of certain loans. As such, the per share consideration may be as low as 0.4047 OLB Shares if the average price is $29.16 or more and as high as 0.4600 OLB Shares if the average price is $25.65 or less, subject to the adjustments provided for in the Merger Agreement. The closing price we have in the MAT takes the collar into account but not the adjustments related to litigation and problem loans.
  3. The acquisition of Exa Corporation (EXA) by Dassault Systèmes for $400 million or $24.25 per share in cash.

Deal Updates:

  1. On September 15, 2017, Anchor Bancorp (ANCBstated in their 10K that the merger with Washington Federal (WAFD) is expected to be completed in the fourth calendar quarter of 2017.
  2. On September 19, 2017, Southwest Bancorp (OKSB) announced that on October 17, 2017, they will hold a special meeting of the shareholders of Southwest Bancorp to vote on a proposal to merge with Simmons First National Corporation (SFNC). We have changed the closing date for this deal to October 31, 2017.
  3. On September 22, 2017, Ensco (ESV) announced that leading independent proxy advisory firm Glass Lewis, has recommended that Ensco shareholders vote “FOR” the proposed all-stock transaction with Atwood Oceanics (ATW) at the company’s upcoming general meeting of shareholders on 5 October 2017. The company anticipates closing the transaction in the first week of October 2017.
  4. On September 25, 2017, United Rentals (URI) and Neff Corporation (NEFF) announced that on September 21, 2017, the U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976  with respect to the pending acquisition of Neff by United Rentals. The company has reaffirmed its expectation that the transaction will close in early October.
  5. On September 25, 2017, Parkway (PKY) announced that its stockholders approved the previously announced merger of Parkway with an affiliate of Canada Pension Plan Investment Board. The merger is expected to close on or about October 12, 2017, subject to the satisfaction or waiver of all closing conditions related to the transaction.
  6. September 26, 2017: Lumos Networks (LMOS) stated in their 10Q filing that the completion of the EQT Merger is expected to close within 90 days of the 10Q filing on August 7, 2017. We have changed the closing date for this deal to November 7, 2017.
  7. On September 26, 2017, RhythmOne (RTHM.L) announced a 1/10 reverse stock split. We have adjusted the share portion of the cash plus stock transaction to 0.7325 shares. YuMe (YUME) shareholders will now receive $1.70 per share in cash and 0.7325 shares in RhythmOne stock.
  8. On September 26, 2017, Gilead Sciences (GILD) and Kite Pharma (KITE) announced that the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to Gilead’s cash tender offer for Kite on September 25, 2017. With the expiration of the waiting period, the tender offer is expected to close in the beginning of October 2017, subject to customary closing conditions.
  9. On September 26, 2017, First Potomac Realty Trust (FPOshareholders approve acquisition by Government Properties Income Trust (GOV). The transaction is expected to close in October, subject to customary closing conditions.
  10. On September 27, 2017, Washington Federal (WAFD) and Anchor Bancorp (ANCB) announced that they have mutually agreed to amend their merger agreement. The amendment extends from December 31, 2017 to June 30, 2018 the date after which either party can elect to terminate the agreement if the transaction contemplated by the agreement has not yet been completed.
  11. On September 28, 2017, Angie’s List (ANGIannounced the results of the elections made by stockholders of Angie’s List regarding the form of merger consideration they will receive in connection with the acquisition of Angie’s List.
  12. On September 28, 2017, Alere (ALR) announced that it has settled with the U.S. Securities and Exchange Commission in regard to an investigation of accounting issues concerning the company’s foreign subsidiaries. Alere’s acquisition by Abbott Laboratories (ABT) will close on October 3, 2017.
  13. On September 29, 2017, Royal Bancshares of Pennsylvania (RBPAA) announced that the Merger with Bryn Mawr Bank Corporation (BMTC) has been approved by RBPI shareholders and by the Pennsylvania Department of Banking and Securities, one of two required bank regulatory agencies.  The closing of the Merger is expected to occur in the fourth quarter of 2017, pending receipt of final regulatory approval.

Closed Deals:

  1. The acquisition of ShoreTel (SHOR) by Mitel Networks Corporation (MITL) on September 25, 2017. It took 60 days for this deal to be completed.
  2. The acquisition of Cabelas Incorporated (CAB) by Bass Pro Shops on September 25, 2017. It took 357 days for this deal to be completed.
  3. The acquisition of Stonegate Bank (SGBK) by Home Bancshares (HOMB) on September 26, 2017. It took 183 days for this deal to be completes.
  4. The acquisition of Supreme Industries (STS) by Wabash National Corporation (WNC) on September 27, 2017. It took 50 days for this deal to be completed.
  5. The acquisition of Sevcon (SEV) by BorgWarner on September 27, 2017. It took 72 days for this deal to be completed.
  6. The acquisition of OneBeacon Insurance Group (OB) by Intact Financial Corporation on September 28, 2017. It took 149 days for this deal to be completed.
  7. The acquisition of PAREXEL International Corporation (PRXL) by Pamplona Capital Management on September 29, 2017. It took 101 days for this deal to be completed.
  8. The acquisition of Zhaopin Limited (ZPIN) by SEEK International Investments Pty on September 29, 2017. It took 176 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
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.85 12/31/2017 41.04% 166.44%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $16.11 12/31/2017 11.73% 47.58%
CBMX 07/31/2017 Invitae Corporation (NVTA) $8.33 $7.50 12/31/2017 11.07% 44.88%
ASBB 05/01/2017 First Bancorp (FBNC) $49.55 $45.10 10/01/2017 9.87% -3601.76%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $27.60 06/30/2018 8.70% 11.71%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.75 12/31/2017 7.37% 29.88%
COL 09/04/2017 United Technologies Corp. (UTX) $140.00 $130.71 09/30/2018 7.11% 7.15%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $119.82 01/31/2018 6.83% 20.59%
BRCD 11/02/2016 Broadcom Limited (AVGO) $12.75 $11.95 10/28/2017 6.69% 93.98%
HUN 05/22/2017 CLARIANT N (CLN.VX) $29.14 $27.42 12/31/2017 6.29% 25.50%

List of all pending deals:

  Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing
Date
Profit Annu.
Profit
+ GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) All Cash $2.7 billion $5.43 $3.85 4,272,075 12/31/2017 41.04% 166.44%
+ MGI 01/26/2017 Ant Financial Services Group (N/A) All Cash $1.2 billion $18.00 $16.11 186,202 12/31/2017 11.73% 47.58%
+ CBMX 07/31/2017 Invitae Corporation (NVTA) Special Conditions $20.22 million $8.33 $7.50 65,501 12/31/2017 11.07% 44.88%
+ ASBB 05/01/2017 First Bancorp (FBNC) All Stock $175 million $49.55 $45.10 23,008 10/01/2017 9.87% 0.00%
+ NXTM 08/07/2017 Fresenius Medical Care (N/A) All Cash $1.62 billion $30.00 $27.60 755,436 06/30/2018 8.70% 11.71%
+ GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) All Cash $1.3 billion $5.10 $4.75 384,027 12/31/2017 7.37% 29.88%
+ COL 09/04/2017 United Technologies Corp. (UTX) Special Conditions $30 billion $140.00 $130.71 1,931,437 09/30/2018 7.11% 7.15%
+ MON 09/14/2016 Bayer AG (BAYRY) All Cash $66 billion $128.00 $119.82 2,303,361 01/31/2018 6.83% 20.59%
+ BRCD 11/02/2016 Broadcom Limited (AVGO) All Cash $5.5 billion $12.75 $11.95 15,442,963 10/28/2017 6.69% 93.98%
+ HUN 05/22/2017 CLARIANT N (CLN.VX) All Stock $6.72 billion $29.14 $27.42 2,534,113 12/31/2017 6.29% 25.50%
+ HCOM 07/10/2017 Cincinnati Bell (CBB) Cash Plus Stock $650 million $31.40 $29.82 9,319 12/31/2018 5.29% 4.24%
+ TWX 10/22/2016 AT&T, Inc. (T) Special Conditions $108.7 billion $107.50 $102.45 5,243,566 12/31/2017 4.93% 19.99%
+ WGL 01/25/2017 AltaGas Ltd. (N/A) All Cash $6.4 billion $88.25 $84.20 289,576 06/30/2018 4.81% 6.48%
+ SNI 07/31/2017 Discovery Communications, Inc. (DISCK) Special Conditions $14.6 billion $90.00 $85.89 435,936 03/31/2018 4.79% 9.70%
+ XCRA 04/10/2017 an affiliate of Sino IC Capital and Unic Capital Management (N/A) All Cash $439.97 million $10.25 $9.85 197,661 12/31/2017 4.06% 16.47%
+ ANCB 04/11/2017 Washington Federal, Inc. (WAFD) Special Conditions $63.9 million $25.75 $24.75 33,634 06/30/2018 4.04% 5.44%
+ YUME 09/05/2017 RhythmOne plc (RTHM.L) Cash Plus Stock $102.36 million $4.80 $4.63 126,432 03/31/2018 3.78% 7.66%
+ TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) Cash Plus Stock $6.6 billion $42.37 $40.86 2,679,495 12/31/2017 3.70% 15.00%
+ CPN 08/18/2017 Energy Capital Partners (N/A) All Cash $17.3 billion $15.25 $14.75 15,307,232 03/31/2018 3.39% 6.87%
+ SBCP 08/14/2017 CenterState Banks, Inc. (CSFL) All Stock $176.7 million $23.85 $23.24 57,209 03/31/2018 2.63% 5.34%
+ AKRX 04/24/2017 Fresenius Kabi (N/A) All Cash $4.75 billion $34.00 $33.19 1,742,838 03/31/2018 2.44% 4.95%
+ SNBC 06/30/2017 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $640.73 million $25.45 $24.85 30,716 01/31/2018 2.43% 7.32%
+ AVA 07/19/2017 Hydro One Limited (N/A) All Cash $5.3 billion $53.00 $51.77 637,688 12/31/2018 2.38% 1.91%
+ PBNC 04/27/2017 TowneBank (TOWN) All Stock $323.7 million $57.79 $56.46 44,105 12/31/2017 2.35% 9.54%
+ STRP 05/11/2017 Verizon Communications Inc. (VZ) Special Conditions $3.1 billion $184.00 $180.67 75,859 03/15/2018 1.84% 4.10%
+ NMRX 08/02/2017 Sierra Wireless, Inc. (SWIR) All Stock $107 million $3.87 $3.80 43,553 12/31/2017 1.84% 7.47%
+ ATW 05/30/2017 Ensco plc (ESV) All Stock $1.7 billion $9.55 $9.39 4,272,895 10/07/2017 1.73% 125.94%
+ RICE 06/19/2017 EQT Corporation (EQT) Cash Plus Stock $8.2 billion $29.44 $28.94 3,704,511 12/31/2017 1.72% 6.99%
+ XBKS 05/22/2017 Union Bankshares Corporation (UBSH) All Stock $701.2 million $33.02 $32.50 30,266 01/15/2018 1.60% 5.56%
+ WNRL 08/14/2017 Andeavor Logistics LP (ANDX) All Stock $1.8 billion $26.20 $25.80 1,231,658 12/31/2017 1.54% 6.23%
+ PSTB 04/27/2017 South State Corporation (SSB) All Stock $690.8 million $12.61 $12.42 339,432 12/31/2017 1.51% 6.11%
+ WFBI 05/16/2017 Sandy Spring Bancorp, Inc. (SASR) All Stock $489 million $36.11 $35.59 35,987 12/31/2017 1.45% 5.89%
+ WBKC 06/14/2017 Horizon Bancorp (HBNC) Cash Plus Stock $88.9 million $43.61 $43.00 5,604 10/31/2017 1.43% 17.95%
+ FIG 02/14/2017 SoftBank Group Corp. (SFTBY) All Cash $3.3 billion $8.08 $7.97 4,135,942 12/31/2017 1.38% 5.60%
+ CBF 05/04/2017 First Horizon National Corp. (FHN) Cash Plus Stock $2.2 billion $41.58 $41.05 681,381 12/31/2017 1.30% 5.28%
+ SPA 07/07/2017 Ultra Electronics Holdings (N/A) All Cash $308.13 million $23.50 $23.21 47,074 01/08/2018 1.25% 4.65%
+ ABCO 08/29/2017 Optum and Vista Equity Partners (N/A) Special Conditions $2.66 billion $54.29 $53.625 822,398 03/31/2018 1.24% 2.51%
+ MSFG 07/25/2017 First Financial Bancorp. (FFBC) All Stock $1 billion $36.28 $35.86 94,290 03/31/2018 1.18% 2.39%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $21.69 $21.45 390,621 10/06/2017 1.14% 103.69%
+ OA 09/18/2017 Northrop Grumman Corporation (NOC) All Cash $9.2 billion $134.50 $133.16 1,039,193 06/30/2018 1.01% 1.36%
+ AMFW 03/13/2017 John Wood Group Plc (WG.L) All Stock $4.3 billion $6.82 $6.76 22,006 12/31/2017 0.87% 3.54%
+ BKMU 07/20/2017 Associated Banc-Corp (ASB) All Stock $482 million $10.23 $10.15 139,962 03/31/2018 0.82% 1.67%
+ TESO 08/14/2017 Nabors Industries Ltd. (NBR) All Stock $157.23 million $5.49 $5.45 356,015 12/31/2017 0.69% 2.80%
+ FSBK 06/12/2017 Carolina Financial Corporation (CARO) All Stock $162 million $18.66 $18.53 16,253 12/31/2017 0.69% 2.79%
+ RBPAA 01/30/2017 Bryn Mawr Bank Corporation (BMTC) All Stock $127.7 million $4.49 $4.46 32,988 12/31/2017 0.66% 2.68%
+ BCR 04/23/2017 Becton, Dickinson and Company (BDX) Cash Plus Stock $24 billion $322.41 $320.50 403,354 11/30/2017 0.60% 3.69%
+ OKSB 12/14/2016 Simmons First National Corporation (SFNC) Cash Plus Stock $564.4 million $27.71 $27.55 66,664 10/31/2017 0.57% 7.24%
+ SFR 08/10/2017 Invitation Homes Inc. (INVH) All Stock $7.36 billion $36.56 $36.37 1,502,920 12/31/2017 0.51% 2.09%
+ SSNI 09/18/2017 Itron, Inc. (ITRI) All Cash $712 million $16.25 $16.17 1,772,701 03/31/2018 0.49% 1.00%
+ DDC 07/17/2017 The Washington Companies (N/A) All Cash $1.06 billion $14.25 $14.18 560,375 12/31/2017 0.49% 2.00%
+ PCBK 01/09/2017 Columbia Banking System, Inc. (COLB) All Stock $644.1 million $27.08 $26.95 160,186 09/30/2017 0.47% 0.00%
+ CCC 09/21/2017 Kuraray (N/A) All Cash $1.3 billion $21.50 $21.40 1,849,585 12/31/2017 0.47% 1.90%
+ LMOS 02/20/2017 EQT Infrastructure investment strategy (N/A) All Cash $950 million $18.00 $17.92 159,672 11/07/2017 0.45% 4.53%
+ VWR 05/05/2017 Avantor (N/A) All Cash $6.4 billion $33.25 $33.11 1,281,017 12/31/2017 0.42% 1.71%
+ LVLT 10/31/2016 CenturyLink, Inc. (CTL) Cash Plus Stock $34 billion $53.50 $53.29 1,621,240 10/31/2017 0.40% 4.97%
+ RATE 07/03/2017 Red Ventures (N/A) All Cash $1.4 billion $14.00 $13.95 223,969 12/31/2017 0.36% 1.45%
+ AF 03/07/2017 Sterling Bancorp (STL) All Stock $2.2 billion $21.57 $21.50 16,111,234 12/31/2017 0.32% 1.30%
+ HNH 06/26/2017 Steel Partners Holdings L.P. (SPLP-PA) All Stock $693.48 million $32.65 $32.55 40,367 12/31/2017 0.30% 1.22%
+ EXA 09/28/2017 Dassault Syst�mes (N/A) All Cash $400 million $24.25 $24.18 1,746,191 12/31/2017 0.29% 1.17%
+ NDRM 07/24/2017 Mitsubishi Tanabe Pharma Corporation (N/A) All Cash $654.33 million $39.00 $38.90 292,028 10/15/2017 0.26% 7.22%
+ BSF 08/22/2017 Arvest Bank (N/A) All Cash $391 million $10.28 $10.26 43,377 03/31/2018 0.19% 0.40%
+ FGL 05/24/2017 CF Corporation (CFCO) All Cash $1.835 billion $31.10 $31.05 193,231 12/31/2017 0.16% 0.65%
+ RIC 09/11/2017 Alamos Gold Inc. (AGI) All Stock $455.53 million $9.36 $9.35 340,822 11/15/2017 0.13% 1.12%
+ WSTC 05/09/2017 affiliates of certain funds managed by affiliates of Apollo Global Management, LLC (APO) All Cash $5.1 billion $23.50 $23.47 239,365 12/31/2017 0.13% 0.52%
+ KITE 08/28/2017 Gilead Sciences, Inc. (GILD) All Cash $11.9 billion $180.00 $179.81 1,506,337 10/03/2017 0.11% 38.57%
+ DGI 02/24/2017 MacDonald, Dettwiler and Associates Ltd. (MDA.TO) Cash Plus Stock $3.6 billion $35.29 $35.25 982,908 10/31/2017 0.10% 1.31%
+ CUNB 04/06/2017 PacWest Bancorp (PACW) Cash Plus Stock $705 million $38.81 $38.775 59,895 12/31/2017 0.09% 0.37%
+ FPO 06/28/2017 Government Properties Income Trust (GOV) All Cash $1.4 billion $11.15 $11.14 1,850,758 10/31/2017 0.09% 1.13%
+ PKY 06/30/2017 Canada Pension Plan Investment Board (N/A) All Cash $1.2 billion $23.05 $23.03 242,924 10/12/2017 0.09% 3.17%
+ SNC 07/26/2017 Markel Corporation (MKL) All Cash $919 million $21.00 $20.99 63,660 12/31/2017 0.05% 0.19%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.3 billion $51.00 $50.99 10,404,699 10/03/2017 0.02% 7.16%
+ NEFF 08/16/2017 United Rentals, Inc. (URI) All Cash $838 million $25.00 $25.00 131,508 10/15/2017 0.00% 0.00%
+ LDR 09/06/2017 Fortive Corporation (FTV) All Cash $770 million $67.25 $67.30 96,307 12/31/2017 -0.07% -0.30%
+ BYBK 09/27/2017 Old Line Bancshares, Inc. (OLBK) All Stock $128.6 million $11.33 $11.35 2,273,113 06/30/2018 -0.16% -0.22%
+ PMC 08/03/2017 KKR & Co. L.P. Unit (KKR) All Cash $1.39 billion $29.25 $29.30 349,245 05/01/2018 -0.17% -0.30%
+ SCLN 06/08/2017 a consortium consisting of entities affiliated with GL Capital Management GP Limited, Bank of China Group Investment Limited, CDH Investments, Ascendent Capital Partners and Boying (N/A) All Cash $605 million $11.18 $11.20 524,893 12/31/2017 -0.18% -0.72%
+ MXPT 08/28/2017 Valassis (N/A) All Cash $101 million $13.86 $13.89 1,976 12/31/2017 -0.22% -0.88%
+ HSNI 07/06/2017 Liberty Interactive Corporation (QVCA) All Stock $2.6 billion $38.89 $39.05 262,932 12/31/2017 -0.41% -1.66%
+ SVA 06/26/2017 Sinovac Limited and Sinovac Amalgamation Sub Limited (N/A) All Cash $437.59 million $7.00 $7.04 274,188 12/31/2017 -0.57% -2.30%
+ BOBE 09/19/2017 Post Holdings, Inc. (POST) All Cash $1.53 billion $77.00 $77.51 562,764 03/31/2018 -0.66% -1.33%
+ ARCX 08/29/2017 Zenith (N/A) All Cash $632.96 million $16.50 $16.70 229,061 01/31/2018 -1.20% -3.61%
+ NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) All Cash $38 billion $110.00 $113.09 1,651,943 12/31/2017 -2.73% -11.08%
+ IXYS 08/28/2017 Littelfuse, Inc. (LFUS) All Cash $655 million $23.00 $23.70 479,641 03/31/2018 -2.95% -5.99%
+ DMTX 08/25/2017 Regenxbio Inc. (RGNX) All Stock $41 million $5.18 $6.00 53,591 12/31/2017 -13.62% -55.22%
+ GNCMA 04/04/2017 Liberty Ventures (LVNTA) Special Conditions $2.68 billion $32.50 $40.79 94,019 12/31/2017 -20.32% -82.42%
+ ANGI 05/02/2017 IAC/InterActiveCorp (IAC) Special Conditions $331.67 million $8.50 $12.46 1,411,375 12/31/2017 -31.78% -128.89%

Disclaimer: I hold positions in Fortress Investment Group (FIG), MaxPoint Interactive (MXPT) and CombiMatrix (CBMX). 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

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