Merger Arbitrage Mondays – November 20, 2017

Merger activity increased last week with four new deals announced and nine 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 five new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2017 200
Total Number of Deals Not Completed in 2017 11
Total Number of Pending Deals
Cash Deals 35
Stock Deals 21
Stock & Cash Deals 7
Special Conditions 9
Total Number of Pending Deals 72
Total Deal Size $949.59 billion

New Deals:

  1. The acquisition of Bonanza Creek Energy (BCEI) by SandRidge Energy (SD) for $746 million in a cash plus stock deal. Under the terms of the agreement, Bonanza Creek shareholders will receive $36.00 per share under the terms of the agreement, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock, subject to the collar mechanism.The stock portion will be subject to a collar based on the volume weighted average price of SandRidge common shares over the 20 business days ending on the third business day prior to the closing. If the Average Parent Stock Price is greater than or equal to $17.50 but less than or equal to $21.38, Bonanza Creek shareholders will receive a number of SandRidge shares between 0.7858 and 0.9600 equal to $16.80 in value per Bonanza Creek share. Bonanza Creek shareholders will receive 0.9600 SandRidge common shares if the Average Parent Stock Price is below $17.50 and 0.7858 SandRidge common shares if the Average Parent Stock Price is above $21.38. We have entered this deal as a “Special Conditions” deal in the MAT.
  2. The acquisition of Almost Family (AFAM) by LHC Group (LHCG) for $1.06 billion in an all stock deal. Under terms of the transaction, Almost Family shareholders will receive 0.9150 shares of LHC Group for each existing Almost Family share.
  3. The acquisition of Atlantic Coast Financial Corporation (ACFC) by Ameris Bancorp (ABCB) for $145 million in a cash plus stock deal. Under the terms of the definitive merger agreement, each share of Atlantic Coast common stock will be converted into the right to receive 0.17 shares of Ameris common stock and $1.39 in cash.
  4. The acquisition of JA Solar Holdings (JASO) by JASO Holdings Limited, JASO Parent Limited and JASO Acquisition Limited  in a going private transaction. Under the terms of the agreement, each ordinary share of the Company issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive $1.51 in cash without interest, and each American depositary share of the Company, representing 5 Shares, will be cancelled in exchange for the right to receive $7.55 in cash without interest.

Deal Updates:

  1. On November 9, 2017, NewStar Financial (NEWS) provided an update regarding the recent developments that could potentially affect the Contingent Value Rights that its shareholders are expected to receive based on the merger agreement with First Eagle Investment Management. The Tax Cuts and Jobs Act released by the House Ways and Means Committee, if enacted in its current form, would eliminate the ability to carryback net operating losses, arising in tax years beginning after 2017, subject to limited exceptions not relevant to the contingent value rights. As a result, if the Tax Bill were enacted as is and the transactions contemplated by the asset purchase agreement were to close in 2018, NewStar would not be able to carryback the losses generated in connection with the closing of the asset sale, and as such, holders of the contingent value rights would not be entitled to any payments thereunder.
  2. On November 13, 2017, TerraForm Global (GLBL) announced that its stockholders approved the Agreement and Plan of Merger with Orion US Holding, an affiliate of Brookfield Asset Management.
  3. November 15, 2017: In connection with the previously announced proposed acquisition and subsequent split-off of General Communication (GNCMA) by Liberty Interactive Corporation (LVNTA) on November 7, 2017, the Regulatory Commission of Alaska  approved the applications for acquisition of a controlling interest in certain RCA certificates of public convenience and necessity, and on November 8, 2017, the Federal Communications Commission approved the applications for transfer of control and/or assignment of certain FCC licenses and authorizations. The proposed transactions are expected to close in the first quarter of 2018.
  4. On November 16, 2017, Alamos Gold (AGI) and Richmont Mines (RIC) announced that shareholders of both companies have overwhelmingly voted in favour of the plan of arrangement at their respective special meetings of shareholders. The Transaction is expected to close on November 23, 2017, subject to applicable regulatory approvals and the satisfaction of other customary conditions.
  5. On November 16, 2017, South State Corporation (SSB) announced today that it has received all necessary regulatory and shareholder approvals for its merger with Park Sterling Corporation (PSTB). The merger is scheduled to close on or around November 30, 2017.
  6. November 16, 2017, According to Reuters, the U.S. Justice Department has approached 18 state attorneys general to try to win their support for an antitrust lawsuit to block AT&T Inc’s (T) $85.4 billion deal to buy  Time (TWX).
  7. On November 17, 2017, Qualcomm Incorporated (QCOM) announced that Qualcomm River Holdings has extended the offering period of its previously announced cash tender offer to purchase all of the outstanding common shares of NXP Semiconductors N.V. (NXPI). The tender offer is now scheduled to expire on December 15, 2017, unless extended or earlier terminated.
  8. November 18, 2017: According to Reuters, Qualcomm (QCOMis set to win “imminent” Japanese antitrust clearance for its $38-billion bid for NXP Semiconductors (NXPI) and gain Europe’s approval by the end of the year with slight tweaks to its concessions.

Closed Deals:

  1. The acquisition of Rice Energy (RICE) by EQT Corporation (EQT) on November 13, 2017. It took 147 days for this deal to be completed.
  2. The acquisition of CombiMatrix Corporation (CBMX) by Invitae Corporation (NVTA) on November 14, 2017. It took 106 days for this deal to be completed.
  3. The acquisition of Starwood Waypoint Homes (SFR) by Invitation Homes (INVH) on November 16, 2017. It took 98 days for this deal to be completed.
  4. The acquisition of Lumos Networks (LMOS) by EQT Infrastructure investment strategy on November 17, 2017. It took 270 days for this deal to be completed.
  5. The acquisition of Brocade Communications Systems (BRCD) by Broadcom Limited (AVGO) on November 17, 2017. It took 380 days for this deal to be completed.
  6. The acquisition of Exa Corporation (EXA) by Dassault Systèmes on November 17, 2017. It took 50 days for this deal to be completed.
  7. The acquisition of Onvia (ONVI) by Project Diamond Intermediate Holdings and Deltek on November 17, 2017. It took 43 days for this deal to be completed.
  8. The acquisition of State National Companies (SNC) by Markel Corporation (MKL) on November 17, 2017. It took 114 days for this deal to be completed.
  9. The acquisition of The Advisory Board Company (ABCO) by Optum and Vista Equity Partners on November 17, 2017. It took 80 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 $3.38 12/31/2017 60.65% 539.94%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $14.59 12/31/2017 23.37% 208.07%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $88.72 12/31/2017 21.17% 188.44%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $25.99 06/30/2018 15.43% 25.37%
SNI 07/31/2017 Discovery Communications, Inc. (DISCK) $90.00 $80.62 03/31/2018 11.63% 32.42%
SXE 11/01/2017 American Midstream Partners, LP (AMID) $2.04 $1.83 06/30/2018 11.48% 18.87%
BCEI 11/15/2017 SandRidge Energy (SD) $36.00 $32.84 03/31/2018 9.62% 26.81%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $118.33 01/31/2018 8.17% 41.43%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $3.97 $3.74 03/31/2018 6.28% 17.50%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.80 12/31/2017 6.25% 55.64%

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 $3.38 3,283,287 12/31/2017 60.65% 539.94%
+ MGI 01/26/2017 Ant Financial Services Group (N/A) All Cash $1.2 billion $18.00 $14.59 199,336 12/31/2017 23.37% 208.07%
+ TWX 10/22/2016 AT&T, Inc. (T) Special Conditions $108.7 billion $107.50 $88.72 8,439,691 12/31/2017 21.17% 188.44%
+ NXTM 08/07/2017 Fresenius Medical Care (N/A) All Cash $1.62 billion $30.00 $25.99 259,552 06/30/2018 15.43% 25.37%
+ SNI 07/31/2017 Discovery Communications, Inc. (DISCK) Special Conditions $14.6 billion $90.00 $80.62 1,334,660 03/31/2018 11.63% 32.42%
+ SXE 11/01/2017 American Midstream Partners, LP (AMID) All Stock $815 million $2.04 $1.83 56,320 06/30/2018 11.48% 18.87%
+ BCEI 11/15/2017 SandRidge Energy (SD) Special Conditions $746 million $36.00 $32.84 689,935 03/31/2018 9.62% 26.81%
+ MON 09/14/2016 Bayer AG (BAYRY) All Cash $63.5 billion $128.00 $118.33 936,517 01/31/2018 8.17% 41.43%
+ YUME 09/05/2017 RhythmOne plc (RTHM.L) Cash Plus Stock $102.36 million $3.98 $3.74 49,036 03/31/2018 6.40% 17.82%
+ GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) All Cash $1.3 billion $5.10 $4.80 804,047 12/31/2017 6.25% 55.64%
+ COL 09/04/2017 United Technologies Corp. (UTX) Special Conditions $30 billion $140.00 $132.27 892,532 09/30/2018 5.84% 6.79%
+ CALL 11/09/2017 B. Riley Financial, Inc. (RILY) All Cash $143 million $8.71 $8.275 167,773 06/30/2018 5.26% 8.64%
+ WGL 01/25/2017 AltaGas Ltd. (N/A) All Cash $6.4 billion $88.25 $84.32 346,073 06/30/2018 4.66% 7.66%
+ NEWS 10/17/2017 First Eagle Investment Management (N/A) Special Conditions $3.4 billion $12.44 $11.90 123,559 12/31/2017 4.54% 40.40%
+ XCRA 04/10/2017 an affiliate of Sino IC Capital and Unic Capital Management (N/A) All Cash $439.97 million $10.25 $9.81 193,154 12/31/2017 4.49% 39.93%
+ ANCB 04/11/2017 Washington Federal, Inc. (WAFD) Special Conditions $63.9 million $25.75 $24.85 4,300 06/30/2018 3.62% 5.95%
+ TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) Cash Plus Stock $6.6 billion $42.60 $41.18 1,182,370 12/31/2017 3.45% 30.73%
+ HCOM 07/10/2017 Cincinnati Bell (CBB) Cash Plus Stock $650 million $31.30 $30.29 101,151 12/31/2018 3.33% 2.99%
+ ACFC 11/17/2017 Ameris Bancorp (ABCB) Cash Plus Stock $145 million $9.35 $9.07 1,380,746 06/30/2018 3.04% 5.00%
+ FIG 02/14/2017 SoftBank Group Corp. (SFTBY) All Cash $3.3 billion $8.08 $7.89 1,312,317 12/31/2017 2.41% 21.44%
+ AVA 07/19/2017 Hydro One Limited (N/A) All Cash $5.3 billion $53.00 $51.92 282,404 12/31/2018 2.08% 1.87%
+ AKRX 04/24/2017 Fresenius Kabi (N/A) All Cash $4.75 billion $34.00 $33.40 1,056,412 03/31/2018 1.80% 5.01%
+ OA 09/18/2017 Northrop Grumman Corporation (NOC) All Cash $9.2 billion $134.50 $132.20 539,207 06/30/2018 1.74% 2.86%
+ SPA 07/07/2017 Ultra Electronics Holdings (N/A) All Cash $308.13 million $23.50 $23.10 39,960 01/08/2018 1.73% 12.90%
+ DEL 10/23/2017 Potlatch Corporation (PCH) All Stock $1.18 billion $96.30 $94.72 139,200 06/30/2018 1.67% 2.74%
+ CPN 08/18/2017 Energy Capital Partners (N/A) All Cash $17.3 billion $15.25 $15.01 4,569,309 03/31/2018 1.60% 4.46%
+ CSBK 11/02/2017 Kearny Financial Corp. (KRNY) All Stock $408 million $17.21 $16.97 82,421 04/15/2018 1.41% 3.53%
+ JASO 11/17/2017 JASO Holdings Limited, JASO Parent Limited and JASO Acquisition Limited (N/A) All Cash $677.43 $7.55 $7.45 1,134,849 03/31/2018 1.34% 3.74%
+ STRP 05/11/2017 Verizon Communications Inc. (VZ) Special Conditions $3.1 billion $184.00 $181.59 45,973 03/15/2018 1.33% 4.21%
+ SBCP 08/14/2017 CenterState Banks, Inc. (CSFL) All Stock $176.7 million $23.00 $22.71 12,738 03/31/2018 1.27% 3.53%
+ DYN 10/30/2017 Vistra Energy Corp. (VST) All Stock $12.3 billion $12.49 $12.33 9,293,056 06/30/2018 1.26% 2.08%
+ RBPAA 01/30/2017 Bryn Mawr Bank Corporation (BMTC) All Stock $127.7 million $4.44 $4.39 2,718 12/31/2017 1.22% 10.82%
+ PBNC 04/27/2017 TowneBank (TOWN) All Stock $323.7 million $56.84 $56.23 4,850 12/31/2017 1.08% 9.64%
+ AAAP 10/30/2017 Novartis AG (NVS) All Cash $3.9 billion $82.00 $81.20 326,543 03/31/2018 0.99% 2.75%
+ ARCX 08/29/2017 Zenith (N/A) All Cash $632.96 million $16.50 $16.34 452,796 01/31/2018 0.98% 4.96%
+ TESO 08/14/2017 Nabors Industries Ltd. (NBR) All Stock $157.23 million $3.94 $3.90 235,201 12/31/2017 0.95% 8.49%
+ CBF 05/04/2017 First Horizon National Corp. (FHN) Cash Plus Stock $2.2 billion $40.27 $39.95 293,368 12/31/2017 0.79% 7.03%
+ CCC 09/21/2017 Kuraray (N/A) All Cash $1.3 billion $21.50 $21.35 376,315 12/31/2017 0.70% 6.25%
+ BKMU 07/20/2017 Associated Banc-Corp (ASB) All Stock $482 million $10.32 $10.25 60,766 03/31/2018 0.66% 1.85%
+ BSFT 10/23/2017 Cisco (CSCO) All Cash $1.9 billion $55.00 $54.70 1,342,429 03/31/2018 0.55% 1.53%
+ MSFG 07/25/2017 First Financial Bancorp. (FFBC) All Stock $1 billion $37.05 $36.86 26,714 03/31/2018 0.51% 1.41%
+ SSNI 09/18/2017 Itron, Inc. (ITRI) All Cash $712 million $16.25 $16.17 1,042,884 03/31/2018 0.49% 1.38%
+ EXAC 10/23/2017 TPG Capital (N/A) All Cash $625 million $42.00 $41.80 66,251 03/31/2018 0.48% 1.33%
+ OME 10/06/2017 Cooke Inc. (N/A) All Cash $520.88 $22.00 $21.90 845,956 01/31/2018 0.46% 2.31%
+ ENZY 10/29/2017 Frutarom (N/A) All Cash $156.88 million $11.90 $11.85 8,838 03/31/2018 0.42% 1.18%
+ WFBI 05/16/2017 Sandy Spring Bancorp, Inc. (SASR) All Stock $489 million $33.98 $33.85 8,637 12/31/2017 0.39% 3.44%
+ BCR 04/23/2017 Becton, Dickinson and Company (BDX) Cash Plus Stock $24 billion $334.78 $333.56 297,237 11/30/2017 0.37% 13.37%
+ PMC 08/03/2017 KKR & Co. L.P. Unit (KKR) All Cash $1.39 billion $29.25 $29.15 267,426 05/01/2018 0.34% 0.77%
+ BSF 08/22/2017 Arvest Bank (N/A) All Cash $391 million $10.28 $10.25 69,415 03/31/2018 0.29% 0.82%
+ ALDW 11/08/2017 Delek US Holdings, Inc. (DK) All Stock $778.02 million $14.56 $14.52 722,875 03/31/2018 0.26% 0.73%
+ SNAK 10/26/2017 Utz Quality Foods, LLC (N/A) All Cash $165 million $4.00 $3.99 115,855 12/31/2017 0.25% 2.23%
+ XBKS 05/22/2017 Union Bankshares Corporation (UBSH) All Stock $701.2 million $32.31 $32.23 12,768 01/15/2018 0.24% 1.59%
+ PLPM 10/26/2017 Fintrax Group (N/A) All Cash $184.93 million $4.50 $4.49 150,567 12/31/2017 0.22% 1.98%
+ PSTB 04/27/2017 South State Corporation (SSB) All Stock $690.8 million $12.26 $12.24 77,166 11/30/2017 0.14% 5.07%
+ CPLA 10/30/2017 Strayer Education, Inc. (STRA) All Stock $820.96 million $81.46 $81.35 80,751 09/30/2018 0.14% 0.16%
+ AFAM 11/16/2017 LHC Group, Inc. (LHCG) All Stock $1.06 billion $61.90 $61.85 417,832 06/30/2018 0.08% 0.13%
+ VWR 05/05/2017 Avantor (N/A) All Cash $6.4 billion $33.25 $33.24 1,045,435 12/31/2017 0.03% 0.27%
+ RIC 09/11/2017 Alamos Gold Inc. (AGI) All Stock $455.53 million $8.85 $8.85 229,330 11/23/2017 0.00% 0.21%
+ RT 10/16/2017 NRD Capital (N/A) All Cash $335 million $2.40 $2.40 2,146,103 03/31/2018 0.00% 0.00%
+ SNBC 06/30/2017 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $640.73 million $24.64 $24.70 25,257 01/31/2018 -0.24% -1.21%
+ GIMO 10/26/2017 Elliott Management (N/A) All Cash $1.6 billion $38.50 $38.60 390,028 03/31/2018 -0.26% -0.72%
+ CAA 10/30/2017 Lennar Corporation (LEN) All Stock $9.3 billion $52.12 $52.31 3,336,578 03/31/2018 -0.37% -1.02%
+ FGL 05/24/2017 CF Corporation (CFCO) All Cash $1.835 billion $31.10 $31.25 474,229 12/31/2017 -0.48% -4.27%
+ HSNI 07/06/2017 Liberty Interactive Corporation (QVCA) All Stock $2.6 billion $41.02 $41.25 240,841 12/31/2017 -0.56% -4.99%
+ NMRX 08/02/2017 Sierra Wireless, Inc. (SWIR) All Stock $107 million $3.44 $3.46 12,711 12/31/2017 -0.64% -5.66%
+ BOBE 09/19/2017 Post Holdings, Inc. (POST) All Cash $1.53 billion $77.00 $77.55 216,185 03/31/2018 -0.71% -1.98%
+ BYBK 09/27/2017 Old Line Bancshares, Inc. (OLBK) All Stock $128.6 million $11.61 $11.75 6,357 06/30/2018 -1.18% -1.95%
+ NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) All Cash $38 billion $110.00 $115.50 2,030,576 12/31/2017 -4.76% -42.39%
+ IXYS 08/28/2017 Littelfuse, Inc. (LFUS) All Cash $655 million $23.00 $24.40 113,510 03/31/2018 -5.74% -15.99%
+ SVA 06/26/2017 Sinovac Limited and Sinovac Amalgamation Sub Limited (N/A) All Cash $437.59 million $7.00 $7.79 679,826 12/31/2017 -10.14% -90.28%
+ OCRX 11/02/2017 Mallinckrodt Public Limited Company (MNK) Special Conditions $42 million $1.52 $1.77 203,398 12/31/2017 -14.12% -125.74%
+ GNCMA 04/04/2017 Liberty Ventures (LVNTA) Special Conditions $2.68 billion $32.50 $41.13 73,772 03/31/2018 -20.98% -58.46%

Disclaimer: I hold positions in Fortress Investment Group (FIG) and NewStar Financial (NEWS). 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

2 Comments

  1. Mark Bayles
    November 20, 2017 at 10:14 am

    Story from Reuters that EU has new deadline of March 5, 2018 for Bayer-Monsanto review. Looks like EU is going to slow walk this thing.

Leave A Comment

You must be logged in to post a comment.