Merger Arbitrage Mondays – June 28, 2010

  • June 27, 2010

The lull we saw in mergers the week prior proved to be nothing more than a temporary slowdown as deal activity picked up once again with four new deals announced last week. None of the pending deals closed last week.

The new deals include the acquisition of American Italian Pasta (AIPC) by Ralcorp Holdings (RAH) for $53 per share in cash, the acquisition of Alloy (ALOY) by ZelnickMedia for $9.80 per share in cash, the wholly-owned subsidiary of Puerto Rico based Santander Bancorp (SBP), Administracian de Bancos Latinoamericanos Santander, S.L. (“ABLASA”) is making a tender offer for $12.69 per share in cash for all shares of Santander Bancorp it does not already own and the acquisition of Valeant Pharmaceuticals International (VRX) by Biovail (BVF) in a cash plus stock deal. Valeant stockholders will get a one-time special cash dividend of $16.77 per share and 1.7809 shares of Biovail common stock. The combined company will pay an additional $1/share dividend to all stockholders of the new entity.

EF Johnson Technology (EFJI) announced an amended merger agreement with Francisco Partners increasing the purchase price by over 42% from $1.05 per share to $1.50 per share in cash.

Portec Rail Products (PRPX), one of the three pending deals I picked last week as appearing attractive, spiked 2.43% on nearly 10 times average daily volume on Friday. It remains to be seen if its merger with L.B. Foster will complete by the end of this month as announced. In contrast, Coca-Cola Enterprises (CCE) dropped last week, making the deal look even more attractive. I own positions in both these companies and may also start a position in DivX (DIVX), the third company I picked last week.

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

Profit

+ATBC05/10/2010Jacksonville Bancorp (JAXB)N/A$2.86$2.0309/30/201040.99%159.14%
+WX04/26/2010Charles River Laboratories (CRL)$1.6 billion$20.79$16.2612/31/201027.86%54.68%
+SSE02/23/2010Naugatuck Valley Financial Corp (NVSL)$19.5 million$7.25$6.2508/16/201016.00%119.18%
+AYE02/11/2010FirstEnergy (FE)$8.5 billion$24.02$21.0303/31/201114.21%18.79%
+TSFG05/17/2010TD Bank Financial Group (N/A)$61 million$0.28$0.255109/30/20109.76%37.90%
+EMMS05/25/2010JS Acquisition and Alden Global Capital (N/A)$3 billion$2.40$2.1909/30/20109.59%37.23%
+PINN02/24/2010Investor Group lead by Scotia Waterous (USA) (N/A)$11 million$0.34$0.31506/30/20107.94%1448.41%
+Q04/22/2010Century Link (CTL)$10.6 billion$5.65$5.2704/21/20117.17%8.81%
+ECLP06/09/2010Allscripts-Misys Healthcare (MDRX)$1.3 billion$19.75$18.4711/15/20106.94%18.10%
+TTIL06/09/2010Teoco Corp. (N/A)$58 million$3.00$2.8209/30/20106.38%24.78%
+BGH06/11/2010Buckeye Partners LP (BPL)$1.14 billion$41.78$39.5512/31/20105.63%11.06%
+SWWC03/03/2010Institutional Investors (N/A)$275 million$11.00$10.4603/31/20115.16%6.83%
+ME04/15/2010Apache (APA)$2.7 billion$23.13$22.1409/30/20104.45%17.28%
+DIVX06/02/2010Sonic Solutions (SNIC)$323 million$8.11$7.7709/30/20104.43%17.18%
+EFJI05/17/2010Francisco Partners (N/A)N/A$1.50$1.4409/30/20104.17%16.18%
+GLG05/17/2010Man Group (N/A)$1.6 billion$4.50$4.3209/30/20104.17%16.18%
+OMNI06/04/2010Wellspring Capital Management (N/A)$122 million$2.75$2.6611/15/20103.38%8.82%
+ALOY06/24/2010ZelnickMedia (N/A)$126.5 million$9.80$9.5012/31/20103.16%6.20%
+PSYS05/17/2010Universal Health (N/A)$3.1 billion$33.75$32.7512/31/20103.05%5.99%
+PRPX02/17/2010L.B. Foster Co. (N/A)$112 million$11.71$11.3906/30/20102.81%512.73%
+SII02/19/2010Schlumberger (SLB)$7.5 billion$40.56$39.4709/30/20102.75%10.68%
+MAM03/12/2010Emera Inc (N/A)$75.7 million$45.00$43.81312/31/20102.71%5.32%
+BNE02/24/2010RR Donnelley (RRD)$481 million$11.50$11.2309/30/20102.40%9.34%
+PFWD04/16/2010Oracle Corp. (ORCL)$685 million$17.00$16.6606/30/20102.04%372.45%
+VTIV05/06/2010Thomas H. Lee Partners (N/A)$1.1 billion$26.00$25.4809/30/20102.04%7.92%
+PMACA06/10/2010Old Republic International (ORI)$228 million$7.06$6.9309/30/20101.83%7.09%
+CYBS04/21/2010Visa Inc. (V)$2.0 billion$26.00$25.5509/30/20101.76%6.84%
+STBK03/18/2010Roma Financial Corp (ROMA)$14.7 million$2.52$2.4808/16/20101.61%12.01%
+IDC05/04/2010Silver Lake & Warburg Pincus (N/A)$3.4 billion$33.86$33.4209/30/20101.32%5.11%
+RCNI03/05/2010ABRY Partners (N/A)$536 million$15.00$14.8209/30/20101.21%4.72%
+ODSY05/24/2010Gentiva Health Services (GTIV)$1.0 billion$27.00$26.6809/30/20101.20%4.66%
+MIR04/12/2010RRI Energy In. (RRI)$1.6 billion$11.99$11.8512/31/20101.20%2.35%
+WMZ05/24/2010Williams Partners L.P. (WPZ)$32.85$32.4709/30/20101.16%4.50%
+ORCD03/16/2010eMusic (N/A)$12.77 million$2.05$2.0308/16/20100.99%7.34%
+BSMD05/13/2010Merit Medical Systems (MMSI)$96 million$4.38$4.3409/30/20100.92%3.58%
+DCP04/12/2010Cerberus Capital Management (N/A)$1.5 billion$17.55$17.3911/15/20100.92%2.40%
+NADX04/05/2010GDC Holdings Inc. (N/A)$100 million$17.00$16.850106/30/20100.89%162.35%
+IUSA03/08/2010CCMP (N/A)$460 million$8.00$7.9306/30/20100.88%161.10%
+VIRL06/10/2010Synopsys (SNPS)$315 million$12.00$11.9012/31/20100.84%1.65%
+SY05/12/2010SAP (SAP)$5.8 billion$65.00$64.5109/30/20100.76%2.95%
+MDNU06/11/2010Danone (N/A)$62.3 million$4.00$3.9709/30/20100.76%2.93%
+EVVV06/01/2010Covidien plc (COV)$2.6 billion$22.50$22.3507/31/20100.67%7.42%
+CPII05/10/2010Comtech (CMTL)$472.3 million$16.05$15.9409/30/20100.66%2.56%
+RBI03/15/2010affiliate of Oncap Management Partners L.P. (N/A)$13.55$13.4708/16/20100.59%4.42%
+VRAD05/17/2010Providence Equity (N/A)$294 million$17.25$17.1509/30/20100.58%2.26%
+TWPG04/26/2010Stifel Financial (SF)$300 million$6.32$6.2906/30/20100.53%97.21%
+ATSI04/29/2010Medtronic (MDT)$350 million$4.00$3.9809/30/20100.50%1.95%
+MIL03/01/2010Merck (MRK)$6 billion$107.00$106.5709/30/20100.40%1.57%
+CRN04/19/2010GeoGroup (GEO)$685 million$27.65$27.5409/30/20100.40%1.57%
+SMTS06/16/2010Covidien (COV)$299 million$25.00$24.9207/31/20100.32%3.55%
+AIPC06/21/2010Ralcorp Holdings (RAH)$1.2 billion$53.00$52.8409/30/20100.30%1.18%
+DBTK05/17/2010Vision Solutions (N/A)$242 million$10.55$10.5209/30/20100.29%1.11%
+SXE05/07/2010CGI Group (N/A)$904 million$37.50$37.4009/30/20100.27%1.04%
+SENO05/05/2010Bard (BARD.PK)$200 million$11.00$10.9809/30/20100.18%0.71%
+CKR03/01/2010Apollo Management VII (N/A)$694 million$12.55$12.5306/30/20100.16%29.13%
+BELM03/29/2010Avnet (AVT)$252 million$7.00$6.9906/30/20100.14%26.11%
+PALM04/28/2010Hewlett – Packard (HPQ)$1.2 billion$5.70$5.697507/31/20100.04%0.49%
+SBP06/24/2010ABLASA (N/A)N/A$12.69$12.6907/22/20100.00%0.00%
+WEL04/09/2010Halliburton Company (HAL)$240 million$3.00$3.0009/30/20100.00%0.00%
+GNA06/02/2010Gerdau (GGB)$1.7 billion$11.00$11.00N/A0.00%0.00%
+VETS06/02/2010VCA Antech Inc (WOOF)$41.25 million$0.34$0.340109/30/2010-0.03%-0.11%
+HTRN05/05/2010Endo Pharmaceuticals (ENDP)$223 million$4.85$4.8607/31/2010-0.21%-2.28%
+CAL05/03/2010United (UAUA)$1.2 billion$21.95$22.1312/31/2010-0.80%-1.57%
+VRX06/21/2010Biovail Corporation (BVF)$3.3 billion$51.57$52.7612/31/2010-2.26%-4.43%
+SNWL06/03/2010investor group led by private equity firm Thoma Bravo LLC (N/A)$636 million$11.50$11.8512/31/2010-2.95%-5.80%
+ARD04/04/2010SandRidge Energy Inc. (SD)$1.6 billion$32.93$34.3409/30/2010-4.11%-15.94%
+SMMX04/05/2010Accelrys Inc. (ACCL)$186 million$5.31$5.5806/30/2010-4.78%-872.72%
+NGA04/01/2010AZZ Inc. (AZZ)$125.6 million$7.50$8.0208/31/2010-6.48%-36.98%
+DTG04/26/2010Hertz (HTZ)$1.3 billion$39.15$43.7312/31/2010-10.47%-20.54%
+TLCR06/07/2010Grifols (N/A)$3.4 billion$19.00$21.2912/31/2010-10.76%-21.11%
+MCCC06/01/2010Chief Executive Rocco Commisso (N/A)$590 million$6.00$6.93N/A-13.42%0.00%
+CCE02/25/2010The Coca-Cola Company (KO)$12.3 billionN/A$25.8810/01/2010N/AN/A