Merger Arbitrage Mondays – October 23, 2017

Merger activity increased last week with three new deals announced and three pending 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 were no new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2017 182
Total Number of Deals Not Completed in 2017 10
Total Number of Pending Deals
Cash Deals 35
Stock Deals 18
Stock & Cash Deals 9
Special Conditions 9
Total Number of Pending Deals 71
Total Deal Size $921.87 billion

New Deals:

  1. The acquisition of Ruby Tuesday (RT) by a fund managed by NRD Capital for $335 million or $2.40 per share in cash.
  2. The acquisition of NewStar Financial (NEWS) by First Eagle Investment Management for $3.4 billion. Under the terms of the agreement, the NewStar stockholders will receive $11.44 in upfront cash and one non-transferable contingent value right (CVR) for each NewStar share held at the closing of the transaction. NewStar estimates these refunds to total $1.00 per share if the transaction closes in 2017 or $0.88 per share if the transaction closes in 2018. NewStar stockholders are expected to receive total consideration estimated at $12.32 to $12.44 per share.
  3. On October 20, 2017, EnerJex Resources (ENRJ) announced that it has entered into a definitive Merger Agreement with AgEagle Aerial Systems. Under the terms of the agreement, EnerJex’s Common and Series A Preferred shareholders will own approximately 15% of the combined company. We are not adding this deal to our database since this merger will lead to the creation of a new company.

Deal Updates:

  1. On October 12, 2017, Broadcom, Brocade and ARRIS withdrew and re-filed their joint voluntary notice to CFIUS with respect to the Transaction (the “Transaction Notice”) since completion of the Transaction is predicated upon completion of the Merger and the Parties wish to more closely align the review timetables for these two CFIUS cases. Similar to the Merger Notice, CFIUS has agreed to proceed directly to a 45-day investigation period with respect to the Transaction Notice. To allow for the additional CFIUS review period, on October 16, 2017, the Company and Seller entered into an amendment to the Agreement (the “Amendment”) to extend the end date of the Agreement until December 15, 2017.
  2. On October 17, 2017, Union Bankshares Corporation (UBSH) and Xenith Bankshares (XBKS) jointly announced the receipt of regulatory approval from the Federal Reserve Bank of Richmond and from the Virginia State Corporation Commission to move forward with the proposed merger of Xenith into Union.  The proposed merger remains subject to approval by shareholders of Union and Xenith.
  3. On October 19, 2017, Tribune Media Company (TRCO) announced that at a special meeting, the stockholders of the Company voted overwhelmingly to approve the previously announced acquisition of the Company by Sinclair Broadcast Group (SBGI).

Closed Deals:

  1. The acquisition of Wolverine Bancorp (WBKC) by Horizon Bancorp (HBNC) on October 17, 2017. It took 125 days for this deal to be completed.
  2. The acquisition of Landauer (LDR) by Fortive Corporation (FTV) on October 19, 2017. It took 43 days for this deal to be completed.
  3. The acquisition of Southwest Bancorp (OKSB) by Simmons First National Corporation (SFNC) on October 20, 2017. It took 310 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 $3.81 12/31/2017 42.52% 224.92%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $15.74 12/31/2017 14.36% 75.95%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $4.74 $4.23 03/31/2018 11.97% 27.48%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $27.51 06/30/2018 9.05% 13.21%
BRCD 11/02/2016 Broadcom Limited (AVGO) $12.75 $11.90 12/15/2017 7.14% 49.19%
SNI 07/31/2017 Discovery Communications, Inc. (DISCK) $90.00 $84.50 03/31/2018 6.51% 14.94%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $101.83 12/31/2017 5.57% 29.45%
HUN 05/22/2017 CLARIANT N (CLN.VX) $30.39 $28.97 12/31/2017 4.90% 25.92%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $122.15 01/31/2018 4.79% 17.48%
CBMX 07/31/2017 Invitae Corporation (NVTA) $8.33 $7.95 12/31/2017 4.78% 25.28%

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 $3.81 3,302,828 12/31/2017 42.52% 224.92%
+ MGI 01/26/2017 Ant Financial Services Group (N/A) All Cash $1.2 billion $18.00 $15.74 563,774 12/31/2017 14.36% 75.95%
+ YUME 09/05/2017 RhythmOne plc (RTHM.L) Cash Plus Stock $102.36 million $4.74 $4.23 105,083 03/31/2018 11.97% 27.48%
+ NXTM 08/07/2017 Fresenius Medical Care (N/A) All Cash $1.62 billion $30.00 $27.51 412,635 06/30/2018 9.05% 13.21%
+ BRCD 11/02/2016 Broadcom Limited (AVGO) All Cash $5.5 billion $12.75 $11.90 1,980,283 12/15/2017 7.14% 49.19%
+ SNI 07/31/2017 Discovery Communications, Inc. (DISCK) Special Conditions $14.6 billion $90.00 $84.50 484,293 03/31/2018 6.51% 14.94%
+ TWX 10/22/2016 AT&T, Inc. (T) Special Conditions $108.7 billion $107.50 $101.83 5,184,804 12/31/2017 5.57% 29.45%
+ HUN 05/22/2017 CLARIANT N (CLN.VX) All Stock $6.72 billion $30.39 $28.97 2,347,996 12/31/2017 4.90% 25.92%
+ MON 09/14/2016 Bayer AG (BAYRY) All Cash $66 billion $128.00 $122.15 1,551,332 01/31/2018 4.79% 17.48%
+ CBMX 07/31/2017 Invitae Corporation (NVTA) Special Conditions $20.22 million $8.33 $7.95 21,696 12/31/2017 4.78% 25.28%
+ GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) All Cash $1.3 billion $5.10 $4.90 319,165 12/31/2017 4.08% 21.59%
+ COL 09/04/2017 United Technologies Corp. (UTX) Special Conditions $30 billion $140.00 $135.00 1,227,476 09/30/2018 3.70% 3.95%
+ ANCB 04/11/2017 Washington Federal, Inc. (WAFD) Special Conditions $63.9 million $25.75 $24.85 9,617 06/30/2018 3.62% 5.29%
+ XCRA 04/10/2017 an affiliate of Sino IC Capital and Unic Capital Management (N/A) All Cash $439.97 million $10.25 $9.90 184,897 12/31/2017 3.54% 18.70%
+ HCOM 07/10/2017 Cincinnati Bell (CBB) Cash Plus Stock $650 million $31.33 $30.28 5,899 12/31/2018 3.47% 2.92%
+ TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) Cash Plus Stock $6.6 billion $42.07 $40.73 521,980 12/31/2017 3.30% 17.44%
+ BYBK 09/27/2017 Old Line Bancshares, Inc. (OLBK) All Stock $128.6 million $11.90 $11.55 47,317 06/30/2018 3.05% 4.45%
+ WGL 01/25/2017 AltaGas Ltd. (N/A) All Cash $6.4 billion $88.25 $85.85 212,988 06/30/2018 2.80% 4.08%
+ FIG 02/14/2017 SoftBank Group Corp. (SFTBY) All Cash $3.3 billion $8.08 $7.88 4,787,678 12/31/2017 2.54% 13.43%
+ CPN 08/18/2017 Energy Capital Partners (N/A) All Cash $17.3 billion $15.25 $14.90 3,294,800 03/31/2018 2.35% 5.39%
+ RICE 06/19/2017 EQT Corporation (EQT) Cash Plus Stock $8.2 billion $28.74 $28.12 5,353,642 12/31/2017 2.20% 11.65%
+ AKRX 04/24/2017 Fresenius Kabi (N/A) All Cash $4.75 billion $34.00 $33.28 1,311,558 03/31/2018 2.16% 4.97%
+ NEWS 10/17/2017 First Eagle Investment Management (N/A) Special Conditions $3.4 billion $12.44 $12.20 153,224 12/31/2017 1.97% 10.41%
+ SBCP 08/14/2017 CenterState Banks, Inc. (CSFL) All Stock $176.7 million $24.63 $24.21 26,560 03/31/2018 1.72% 3.95%
+ AVA 07/19/2017 Hydro One Limited (N/A) All Cash $5.3 billion $53.00 $52.19 338,339 12/31/2018 1.55% 1.31%
+ OA 09/18/2017 Northrop Grumman Corporation (NOC) All Cash $9.2 billion $134.50 $132.69 673,544 06/30/2018 1.36% 1.99%
+ TESO 08/14/2017 Nabors Industries Ltd. (NBR) All Stock $157.23 million $4.56 $4.50 152,534 12/31/2017 1.24% 6.58%
+ BKMU 07/20/2017 Associated Banc-Corp (ASB) All Stock $482 million $10.93 $10.80 161,909 03/31/2018 1.20% 2.76%
+ STRP 05/11/2017 Verizon Communications Inc. (VZ) Special Conditions $3.1 billion $184.00 $181.88 54,010 03/15/2018 1.17% 2.98%
+ PBNC 04/27/2017 TowneBank (TOWN) All Stock $323.7 million $59.86 $59.19 5,404 12/31/2017 1.13% 5.97%
+ SNBC 06/30/2017 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $640.73 million $25.86 $25.60 19,666 01/31/2018 1.03% 3.75%
+ RIC 09/11/2017 Alamos Gold Inc. (AGI) All Stock $455.53 million $9.85 $9.75 115,064 11/15/2017 1.00% 15.85%
+ WFBI 05/16/2017 Sandy Spring Bancorp, Inc. (SASR) All Stock $489 million $36.59 $36.23 19,715 12/31/2017 0.98% 5.20%
+ SPA 07/07/2017 Ultra Electronics Holdings (N/A) All Cash $308.13 million $23.50 $23.29 34,092 01/08/2018 0.90% 4.27%
+ XBKS 05/22/2017 Union Bankshares Corporation (UBSH) All Stock $701.2 million $33.03 $32.74 25,025 01/15/2018 0.88% 3.84%
+ SSNI 09/18/2017 Itron, Inc. (ITRI) All Cash $712 million $16.25 $16.11 541,693 03/31/2018 0.87% 1.99%
+ FSBK 06/12/2017 Carolina Financial Corporation (CARO) All Stock $162 million $18.81 $18.66 49,194 12/31/2017 0.80% 4.21%
+ ABCO 08/29/2017 Optum and Vista Equity Partners (N/A) Special Conditions $2.66 billion $54.29 $53.90 178,225 03/31/2018 0.72% 1.66%
+ CBF 05/04/2017 First Horizon National Corp. (FHN) Cash Plus Stock $2.2 billion $41.83 $41.55 536,813 12/31/2017 0.68% 3.58%
+ MSFG 07/25/2017 First Financial Bancorp. (FFBC) All Stock $1 billion $38.16 $37.90 108,922 03/31/2018 0.68% 1.55%
+ PSTB 04/27/2017 South State Corporation (SSB) All Stock $690.8 million $12.90 $12.84 100,427 12/31/2017 0.48% 2.51%
+ DDC 07/17/2017 The Washington Companies (N/A) All Cash $1.06 billion $14.25 $14.19 349,452 12/31/2017 0.42% 2.24%
+ PCBK 01/09/2017 Columbia Banking System, Inc. (COLB) All Stock $644.1 million $27.31 $27.20 140,338 11/01/2017 0.42% 17.09%
+ DMTX 10/03/2017 Ultragenyx Pharmaceutical Inc. (RARE) All Cash $151 million $6.00 $5.975 28,817 12/31/2017 0.42% 2.21%
+ RT 10/16/2017 NRD Capital (N/A) All Cash $335 million $2.40 $2.39 537,458 03/31/2018 0.42% 0.96%
+ NDRM 07/24/2017 Mitsubishi Tanabe Pharma Corporation (N/A) All Cash $654.33 million $39.00 $38.85 200,948 10/31/2017 0.39% 17.62%
+ VWR 05/05/2017 Avantor (N/A) All Cash $6.4 billion $33.25 $33.13 435,082 12/31/2017 0.36% 1.92%
+ RATE 07/03/2017 Red Ventures (N/A) All Cash $1.4 billion $14.00 $13.95 269,025 12/31/2017 0.36% 1.90%
+ LVLT 10/31/2016 CenturyLink, Inc. (CTL) Cash Plus Stock $34 billion $53.70 $53.51 2,068,606 10/31/2017 0.36% 16.25%
+ NMRX 08/02/2017 Sierra Wireless, Inc. (SWIR) All Stock $107 million $3.95 $3.94 19,609 12/31/2017 0.28% 1.48%
+ CCC 09/21/2017 Kuraray (N/A) All Cash $1.3 billion $21.50 $21.45 1,136,248 12/31/2017 0.23% 1.23%
+ PMC 08/03/2017 KKR & Co. L.P. Unit (KKR) All Cash $1.39 billion $29.25 $29.20 206,399 05/01/2018 0.17% 0.33%
+ LMOS 02/20/2017 EQT Infrastructure investment strategy (N/A) All Cash $950 million $18.00 $17.97 31,220 11/07/2017 0.17% 4.06%
+ EXA 09/28/2017 Dassault Syst�mes (N/A) All Cash $400 million $24.25 $24.21 632,656 12/31/2017 0.17% 0.87%
+ BSF 08/22/2017 Arvest Bank (N/A) All Cash $391 million $10.28 $10.27 15,547 03/31/2018 0.10% 0.22%
+ BCR 04/23/2017 Becton, Dickinson and Company (BDX) Cash Plus Stock $24 billion $330.48 $330.16 425,676 11/30/2017 0.10% 0.92%
+ ONVI 10/05/2017 Project Diamond Intermediate Holdings and Deltek (N/A) All Cash $70 million $9.00 $9.00 830 12/31/2017 0.00% 0.00%
+ WNRL 08/14/2017 Andeavor Logistics LP (ANDX) All Stock $1.8 billion $24.05 $24.05 108,692 12/31/2017 -0.02% -0.10%
+ CUNB 04/06/2017 PacWest Bancorp (PACW) Cash Plus Stock $705 million $37.47 $37.50 396,262 10/20/2017 -0.07% 8.73%
+ SFR 08/10/2017 Invitation Homes Inc. (INVH) All Stock $7.36 billion $36.99 $37.02 1,677,342 12/31/2017 -0.07% -0.39%
+ OME 10/06/2017 Cooke Inc. (N/A) All Cash $520.88 $22.00 $22.05 405,472 01/31/2018 -0.23% -0.83%
+ SNC 07/26/2017 Markel Corporation (MKL) All Cash $919 million $21.00 $21.05 118,693 12/31/2017 -0.24% -1.26%
+ SVA 06/26/2017 Sinovac Limited and Sinovac Amalgamation Sub Limited (N/A) All Cash $437.59 million $7.00 $7.02 38,042 12/31/2017 -0.28% -1.51%
+ FGL 05/24/2017 CF Corporation (CFCO) All Cash $1.835 billion $31.10 $31.20 33,330 12/31/2017 -0.32% -1.70%
+ BOBE 09/19/2017 Post Holdings, Inc. (POST) All Cash $1.53 billion $77.00 $77.34 268,991 03/31/2018 -0.44% -1.01%
+ RBPAA 01/30/2017 Bryn Mawr Bank Corporation (BMTC) All Stock $127.7 million $4.63 $4.65 44,368 12/31/2017 -0.48% -2.52%
+ HSNI 07/06/2017 Liberty Interactive Corporation (QVCA) All Stock $2.6 billion $38.58 $38.85 355,412 12/31/2017 -0.70% -3.72%
+ ARCX 08/29/2017 Zenith (N/A) All Cash $632.96 million $16.50 $16.65 88,194 01/31/2018 -0.90% -3.29%
+ NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) All Cash $38 billion $110.00 $115.88 2,912,811 12/31/2017 -5.07% -26.84%
+ IXYS 08/28/2017 Littelfuse, Inc. (LFUS) All Cash $655 million $23.00 $24.55 176,367 03/31/2018 -6.31% -14.49%
+ GNCMA 04/04/2017 Liberty Ventures (LVNTA) Special Conditions $2.68 billion $32.50 $41.65 89,842 12/31/2017 -21.97% -116.21%

Disclaimer: I hold positions in Fortress Investment Group (FIG) 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

4 Comments

  1. GeorgeCiardi
    October 23, 2017 at 6:17 am

    Fairly certain NDRM closed midweek just past.

    • Asif Suria
      October 23, 2017 at 9:32 am

      You are right. We have closed it now. Thank you for brining it to my attention.

  2. GeorgeCiardi
    October 23, 2017 at 12:41 pm

    It seems like old deals keep closing and fewer new ones develop with each passing week. As a result, the number of active deals seems to be smaller and smaller as the year has progressed. I was wondering if you have the ability to show the number of active deals by month compared to something like the long term average for the same month in your historical database? It would be interesting to see if there is some monthly seasonality in effect or if it is a real drawdown in activity compared to past years.

    • Asif Suria
      October 26, 2017 at 5:44 pm

      George, that is an interesting thought and I was able to query our database to see if were indeed seeing a trend of smaller number of deals announced. For the first 8 months of this year, the number of deals announced in each month were either equal to or greater than the average for those months over the prior 7 years with one exception (March).

      However the number of deals announced in September and October of 2017 were 10 and 8 respectively, which are well below the average of 19 and 18 respectively for those months from our historical data. With the month of October still not done, maybe that number edges up a little but overall you are right that the number of deals announced are declining, at least for the last two months.

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