Merger Arbitrage Mondays – June 21, 2010

  • June 20, 2010

There was very little activity on the Merger Arbitrage front last week with just one new deal announced and one deal closing. The new deal announced was the acquisition of Somanetics (SMTS) by Covidien (COV) for $25 per share in cash for a total deal value of $250 million and the deal that closed was the acquisition of BWAY Holdings by Madison Dearborn partners on June 16, 2010. The interesting part about this new acquisition is that Covidien announced the $2.6 billion acquisition of ev3 (EVVV) less than three weeks ago and that deal is expected to close in July.

The Charles River – Wuxi Pharma drama intensified last week with another fund Relational Investors joining Jana Partners in opposing the merger. This comes just days after the James Foster, the CEO of Charles River (CRL) defended the merger in a letter to Jana Partners. In light of these events, WuXi PharmaTech’s (WX) stock dropped even more last week and is now trading below the point where the acquisition was announced. The spread on the deal is 31.41% as you can see below.

The pending deals I like the most at this point are,

  1. The acquisition of media software company DivX (DIVX) by Sonic Solutions (SNIC), which has a 5.36% spread  and the potential of 19.17% annualized profits if the deal closes by 9/30/2010.

  2. The acquisition of Portec Rail Products (PRPX) by L. B. Foster, which has a 2.81% spread and the potential of 102.55% annualized profits if the deal closes by 6/30/2010.

  3. The acquisition of bottling company Coca-Cola Enterprises (CCE) by The Coca-Cola Company (KO), which does not have a clearly defined per share acquisition price but is a very lucrative deal as discussed in detail in the blog entry Special Report Update: Coca-Cola Enterprises.

You can use our Merger Arbitrage tool at any point to see the spreads on all the pending deals.

SymbolAnnounced
Date
Acquiring
Company
Closing
Value
Closing
Price
Last
Price
Closing
Date
ProfitAnnu.

Profit

+WX04/26/2010Charles River Laboratories (CRL)$1.6 billion$21.17$16.1112/31/201031.41%59.40%
+AYE02/11/2010FirstEnergy (FE)$8.5 billion$25.66$22.2803/31/201115.17%19.56%
+ATBC05/10/2010Jacksonville Bancorp (JAXB)N/A$2.87$2.5109/30/201014.42%52.12%
+SSE02/23/2010Naugatuck Valley Financial Corp (NVSL)$19.5 million$7.25$6.4908/16/201011.71%76.33%
+Q04/22/2010Century Link (CTL)$10.6 billion$5.82$5.4004/21/20117.76%9.32%
+BGH06/11/2010Buckeye Partners LP (BPL)$1.14 billion$40.20$37.4612/31/20107.31%13.83%
+ECLP06/09/2010Allscripts-Misys Healthcare (MDRX)$1.3 billion$19.42$18.1311/15/20107.09%17.61%
+EMMS05/25/2010JS Acquisition and Alden Global Capital (N/A)$3 billion$2.40$2.2509/30/20106.67%24.09%
+TTIL06/09/2010Teoco Corp. (N/A)$58 million$3.00$2.8209/30/20106.38%23.07%
+PINN02/24/2010Investor Group lead by Scotia Waterous (USA) (N/A)$11 million$0.34$0.321106/30/20105.89%238.71%
+DIVX06/02/2010Sonic Solutions (SNIC)$323 million$8.38$7.9509/30/20105.36%19.36%
+ME04/15/2010Apache (APA)$2.7 billion$24.43$23.2409/30/20105.12%18.49%
+SWWC03/03/2010Institutional Investors (N/A)$275 million$11.00$10.5203/31/20114.56%5.88%
+PMACA06/10/2010Old Republic International (ORI)$228 million$7.29$6.9809/30/20104.41%15.92%
+PSYS05/17/2010Universal Health (N/A)$3.1 billion$33.75$32.5112/31/20103.81%7.21%
+GLG05/17/2010Man Group (N/A)$1.6 billion$4.50$4.3509/30/20103.45%12.46%
+MAM03/12/2010Emera Inc (N/A)$75.7 million$45.00$43.54512/31/20103.34%6.32%
+IDC05/04/2010Silver Lake & Warburg Pincus (N/A)$3.4 billion$33.86$32.8209/30/20103.17%11.45%
+PRPX02/17/2010L.B. Foster Co. (N/A)$112 million$11.71$11.3906/30/20102.81%113.94%
+BNE02/24/2010RR Donnelley (RRD)$481 million$11.50$11.2009/30/20102.68%9.68%
+MIR04/12/2010RRI Energy In. (RRI)$1.6 billion$12.79$12.4812/31/20102.45%4.63%
+SII02/19/2010Schlumberger (SLB)$7.5 billion$42.17$41.1809/30/20102.39%8.65%
+BSMD05/13/2010Merit Medical Systems (MMSI)$96 million$4.38$4.2809/30/20102.34%8.44%
+PFWD04/16/2010Oracle Corp. (ORCL)$685 million$17.00$16.6406/30/20102.16%87.74%
+EFJI05/17/2010Francisco Partners (N/A)$1.05$1.0309/30/20101.94%7.02%
+VTIV05/06/2010Thomas H. Lee Partners (N/A)$1.1 billion$26.00$25.5209/30/20101.88%6.80%
+SNWL06/03/2010investor group led by private equity firm Thoma Bravo LLC (N/A)$636 million$11.50$11.3112/31/20101.68%3.18%
+VETS06/02/2010VCA Antech Inc (WOOF)$41.25 million$0.34$0.33509/30/20101.49%5.39%
+OMNI06/04/2010Wellspring Capital Management (N/A)$122 million$2.75$2.7111/15/20101.48%3.66%
+RCNI03/05/2010ABRY Partners (N/A)$536 million$15.00$14.8009/30/20101.35%4.88%
+DBTK05/17/2010Vision Solutions (N/A)$242 million$10.55$10.4109/30/20101.34%4.86%
+DCP04/12/2010Cerberus Capital Management (N/A)$1.5 billion$17.55$17.3211/15/20101.33%3.30%
+NADX04/05/2010GDC Holdings Inc. (N/A)$100 million$17.00$16.8006/30/20101.19%48.28%
+CYBS04/21/2010Visa Inc. (V)$2.0 billion$26.00$25.7009/30/20101.17%4.22%
+IUSA03/08/2010CCMP (N/A)$460 million$8.00$7.9206/30/20101.01%40.97%
+WEL04/09/2010Halliburton Company (HAL)$240 million$3.00$2.9709/30/20101.01%3.65%
+ODSY05/24/2010Gentiva Health Services (GTIV)$1.0 billion$27.00$26.7609/30/20100.90%3.24%
+CAL05/03/2010United (UAUA)$1.2 billion$24.99$24.7712/31/20100.89%1.68%
+VIRL06/10/2010Synopsys (SNPS)$315 million$12.00$11.9012/31/20100.84%1.59%
+CRN04/19/2010GeoGroup (GEO)$685 million$27.42$27.1909/30/20100.83%3.02%
+CKR03/01/2010Apollo Management VII (N/A)$694 million$12.55$12.4506/30/20100.80%32.57%
+EVVV06/01/2010Covidien plc (COV)$2.6 billion$22.50$22.3307/31/20100.76%6.95%
+VRAD05/17/2010Providence Equity (N/A)$294 million$17.25$17.1209/30/20100.76%2.74%
+ATSI04/29/2010Medtronic (MDT)$350 million$4.00$3.9709/30/20100.76%2.73%
+SXE05/07/2010CGI Group (N/A)$904 million$37.50$37.2509/30/20100.67%2.43%
+WMZ05/24/2010Williams Partners L.P. (WPZ)$32.80$32.6009/30/20100.62%2.23%
+ORCD03/16/2010eMusic (N/A)$12.77 million$2.05$2.0408/16/20100.49%3.20%
+SMTS06/16/2010Covidien (COV)$299 million$25.00$24.8807/31/20100.48%4.40%
+CPII05/10/2010Comtech (CMTL)$472.3 million$15.94$15.8709/30/20100.46%1.65%
+SENO05/05/2010Bard (BARD.PK)$200 million$11.00$10.9509/30/20100.46%1.65%
+BELM03/29/2010Avnet (AVT)$252 million$7.00$6.9706/30/20100.43%17.46%
+SY05/12/2010SAP (SAP)$5.8 billion$65.00$64.7309/30/20100.42%1.51%
+STBK03/18/2010Roma Financial Corp (ROMA)$14.7 million$2.52$2.5108/16/20100.40%2.60%
+RBI03/15/2010affiliate of Oncap Management Partners L.P. (N/A)$13.55$13.5008/16/20100.37%2.41%
+MIL03/01/2010Merck (MRK)$6 billion$107.00$106.6109/30/20100.37%1.32%
+PALM04/28/2010Hewlett – Packard (HPQ)$1.2 billion$5.70$5.6807/31/20100.35%3.21%
+HTRN05/05/2010Endo Pharmaceuticals (ENDP)$223 million$4.85$4.8407/31/20100.21%1.89%
+NGA04/01/2010AZZ Inc. (AZZ)$125.6 million$7.50$7.4908/31/20100.13%0.69%
+MDNU06/11/2010Danone (N/A)$62.3 million$4.00$4.0009/30/20100.00%0.00%
+TWPG04/26/2010Stifel Financial (SF)$300 million$6.08$6.0806/30/2010-0.03%-1.34%
+TSFG05/17/2010TD Bank Financial Group (N/A)$61 million$0.28$0.280409/30/2010-0.14%-0.52%
+GNA06/02/2010Gerdau (GGB)$1.7 billion$11.00$11.08N/A-0.72%0.00%
+ARD04/04/2010SandRidge Energy Inc. (SD)$1.6 billion$35.27$36.3109/30/2010-2.86%-10.34%
+SMMX04/05/2010Accelrys Inc. (ACCL)$186 million$5.27$5.5506/30/2010-4.97%-201.57%
+TLCR06/07/2010Grifols (N/A)$3.4 billion$19.00$21.3212/31/2010-10.88%-20.58%
+DTG04/26/2010Hertz (HTZ)$1.3 billion$39.34$44.7312/31/2010-12.05%-22.80%
+MCCC06/01/2010Chief Executive Rocco Commisso (N/A)$590 million$6.00$6.85N/A-12.41%0.00%
+CCE02/25/2010The Coca-Cola Company (KO)$12.3 billionN/A$27.0410/01/2010N/AN/A