Merger activity continues to dwindle with just one new deal announced last week and four deals closing.
The new deal announced last week was the acquisition of ExpressJet Holdings (XJT) by SkyWest (SKYW) for $6.75 per share in cash. The current spread on the deal is 2.9% or 7.34% annualized if the deal closes by the end of this year. I have generally been happy flying with SkyWest (through their partnership with United) and it is good to see them expand with this acquisition. Despite the fact that I do not invest in airline stocks, SkyWest has been on my watch list for a number of years. The company is currently trading close to its 52 week low, has managed to remain profitable despite a big drop in 2009 revenue and has a EV/EBITDA of 4.54.
Dollar Thrifty (DTG) rejected Avis’s offer in favor of Hertz saying that it was unsure that Avis could close the deal. The company would consider any changes that Avis might make to its offer.
The spread on the Qwest (Q) – CenturyLink (CTL) deal has widened to 6.42% or 9.19% annualized if the deal closes on 4/21/2011 after staying below 6% for over 5 weeks. The difference in dividend yields between the two companies would shave about 1% off returns if one were to short CenturyLink while starting a long position in Qwest.
On Friday, August 06, 2010, Phase Forward Inc. (PFWD) said that a waiting period had passed for the U.S. Department of Justice to object to its $685 million acquisition by Oracle Corp. on antitrust grounds. Completion of the proposed merger remains subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement.