Merger Arbitrage Mondays – September 06, 2010

  • September 5, 2010

Merger activity increased last week with five new deals announced and three deals closing.

Deal Statistics:

Total Number of Deals Closed in 201064
Total Number of Deals That Did Not Complete in 20104
Total Number of Pending Deals
Cash Deals45
Stock Deals9
Stock & Cash Deals13
Total Number of Pending Deals67

New Deals:

  1. The acquisition of A.D.A.M Inc. (ADAM) by Ebix (EBIX) for $66 million in an all stock deal where shareholders of ADAM will receive 0.3122 of Ebix stock for each share held in ADAM
  2. The acquisition of Cogent Inc. (COGT) by 3M (MMM) for $943 million at $10.50 per share in cash
  3. The acquisition of American Physicians Service Group (AMPH) by ProAssurance (PRA) for $233 million at $32.50 per share in cash
  4. The acquisition of Salary.com (SLRY) by Kenexa Corp. (KNXA) for $80 million at $4.07 per share in cash
  5. The acquisition of Burger King Holdings (BKC) by 3G Capital for $3.26 billion at $24 per share in cash

Closed Deals:

  1. The acquisition of Gerdau Ameristeel Corporation (GNA) by Gerdau S.A. on August 30, 2010
  2. The acquisition of William Pipeline Partners (WMZ) by William Partners on September 01, 2010
  3. The acquisition of Virage Logic Corporation (VIRL) by Synopsis Inc. on September 02, 2010

Modified or Failed Deals:

  1. L.B. Foster and Portec Rail Products (PRPX) announced on Monday that they have extended the merger deadline from August 31, 2010 to December 30, 2010
  2. Rocco B. Commisso, the founder, Chairman and Chief Executive Officer of Mediacom Communications Corporation (MCCC), announced on August 31, 2010 that he has withdrawn his May 31, 2010 non-binding offer to purchase all of the shares of Mediacom not currently owned by him.
  3. Emmis Communications Corp. (EMMS) Chairman and Chief Executive Jeffrey H. Smulyan said it is “unlikely” it will be able to reach deals with a financier and a group of preferred-stock holders that would allow the radio station operator’s proposed buyout to be completed.
  4. Second Ammendment for L.B. Foster and Portec Rail Products (PRPX):  L.B. Foster has agreed to both increase the tender offer share price from $11.71 per share to $11.80 per share and, subject to certain conditions, pay Portec $2 million should the transaction not close by December 30, 2010.
  5. The chief executive of Genzyme (GENZ), Henri A. Termeer, on Tuesday softened his tone about a possible sale, a day after his company rejected a $69 per share offer from Sanofi-Aventis.

Top 10 Deals with largest spreads:

SymbolAcquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnu.
Profit
SSENaugatuck Valley Financial Corp (NVSL)$7.25$5.7109/30/2010 26.97% 410.17%
TLCRGrifols (GRF.MC)$27.12$22.4712/31/2010 20.71% 65.15%
ATBCJacksonville Bancorp (JAXB)$2.26$1.9709/30/2010 14.72% 223.88%
ADAMEbix Inc. (EBIX)$5.88$5.5312/31/2010 6.42% 20.20%
AYEFirstEnergy (FE)$25.20$23.7203/31/2011 6.24% 11.05%
BNERR Donnelley (RRD)$11.50$10.8609/30/2010 5.89% 89.63%
PINNInvestor Group lead by Scotia Waterous (USA) (N/A)$0.34$0.323508/21/2010 5.10% 0.00%
ALYSeaDrill (N/A)$4.25$4.0512/31/2010 4.94% 15.54%
BGHBuckeye Partners LP (BPL)$43.89$41.9212/31/2010 4.69% 14.76%
VETSVCA Antech Inc (WOOF)$0.34$0.327209/30/2010 3.91% 59.49%

List of all Pending Deals:

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

Profit

+SSE02/23/2010Naugatuck Valley Financial Corp (NVSL)$19.5 million$7.25$5.7109/30/2010 26.97% 410.17%
+TLCR06/07/2010Grifols (GRF.MC)$3.4 billion$27.12$22.4712/31/2010 20.71% 65.16%
+ATBC05/10/2010Jacksonville Bancorp (JAXB)N/A$2.26$1.9709/30/2010 14.72% 223.88%
+ADAM08/30/2010Ebix Inc. (EBIX)$66 million$5.88$5.5312/31/2010 6.42% 20.20%
+AYE02/11/2010FirstEnergy (FE)$8.5 billion$25.20$23.7203/31/2011 6.24% 11.05%
+BNE02/24/2010RR Donnelley (RRD)$481 million$11.50$10.8609/30/2010 5.89% 89.63%
+PINN02/24/2010Investor Group lead by Scotia Waterous (USA) (N/A)$11 million$0.34$0.323508/21/2010 5.10% 0.00%
+ALY08/12/2010SeaDrill (N/A)$890 million$4.25$4.0512/31/2010 4.94% 15.54%
+BGH06/11/2010Buckeye Partners LP (BPL)$1.14 billion$43.89$41.9212/31/2010 4.69% 14.76%
+VETS06/02/2010VCA Antech Inc (WOOF)$41.25 million$0.34$0.327209/30/2010 3.91% 59.49%
+NRGP08/09/2010Inergy (NRGY)$2.07 billion$29.19$28.2012/31/2010 3.51% 11.05%
+Q04/22/2010Century Link (CTL)$10.6 billion$6.03$5.8304/21/2011 3.35% 5.39%
+PTV08/17/2010Reynolds Group Holdings (N/A)$6 billion$33.25$32.2212/31/2010 3.20% 10.06%
+CCBP08/09/2010F.N.B. Corporation (FNB)$70 million$38.50$37.3512/31/2010 3.08% 9.69%
+ATAC07/19/2010Genco Distribution System Inc. (N/A)$513 million$25.00$24.3412/31/2010 2.71% 8.53%
+DIVX06/02/2010Sonic Solutions (SNIC)$323 million$8.26$8.0709/30/2010 2.39% 36.36%
+PRPX02/17/2010L.B. Foster Co. (FSTR)$112 million$11.80$11.5612/30/2010 2.08% 6.59%
+ME04/15/2010Apache (APA)$2.7 billion$23.59$23.1609/30/2010 1.84% 27.92%
+ALOY06/24/2010ZelnickMedia (N/A)$126.5 million$9.80$9.630112/31/2010 1.76% 5.55%
+BKC09/02/20103G Capital (N/A)$3.26 billion$24.00$23.6012/31/2010 1.69% 5.33%
+NAL08/19/2010First Niagara Financial Group (FNFG)$1.5 billion$12.98$12.7705/15/2011 1.62% 2.36%
+OSTE08/17/2010Medtronic (MDT)$123 million$6.50$6.4012/31/2010 1.56% 4.92%
+XJT08/04/2010SkyWest (SKYW)$133 million$6.75$6.6512/31/2010 1.50% 4.73%
+WAIN06/29/2010Eastern Bank (N/A)$163 million$19.00$18.720112/31/2010 1.50% 4.70%
+MFE08/19/2010Intel Corporation (INTC)$7.68 billion$48.00$47.3512/31/2010 1.37% 4.32%
+OMNI06/04/2010Wellspring Capital Management (N/A)$122 million$2.75$2.7211/15/2010 1.10% 5.75%
+MIR04/12/2010RRI Energy In. (RRI)$1.6 billion$10.60$10.4912/31/2010 1.08% 3.39%
+WEL04/09/2010Halliburton Company (HAL)$240 million$3.00$2.9709/30/2010 1.01% 15.36%
+PSYS05/17/2010Universal Health (N/A)$3.1 billion$33.75$33.4312/31/2010 0.96% 3.01%
+SMTB07/15/2010People's United Financial Inc. (PBCT)$60 million$3.84$3.8112/31/2010 0.84% 2.63%
+AEZ07/28/2010Hess Corp (HES)$450 million$7.59$7.5312/31/2010 0.81% 2.56%
+NTY07/15/2010The Carlyle Group (N/A)$3.8 billion$55.00$54.5712/31/2010 0.79% 2.48%
+PMACA06/10/2010Old Republic International (ORI)$228 million$7.18$7.1309/30/2010 0.74% 11.30%
+HEW07/12/2010Aon Corp (AON)$4.9 billion$50.02$49.6611/15/2010 0.73% 3.79%
+ACF07/22/2010General Motors Co. (N/A)$3.5 billion$24.50$24.3412/31/2010 0.66% 2.07%
+BXC07/22/2010Cerberus Capital Management (N/A)$111.1 million$3.40$3.3812/31/2010 0.59% 1.86%
+AMPH09/01/2010ProAssuarance (PRA)$233 million$32.50$32.3212/31/2010 0.56% 1.75%
+ADCT07/13/2010Tyco Electronics (TEL)$1.24 billion$12.75$12.6812/31/2010 0.55% 1.74%
+LSBX07/15/2010People's United Financial Inc. (PBCT)$96 million$21.00$20.9012/31/2010 0.48% 1.51%
+GLG05/17/2010Man Group (N/A)$1.6 billion$4.50$4.4809/30/2010 0.45% 6.79%
+TRBN08/12/2010Emergent BioSolution (EBS)$96.8 million$4.47$4.4512/31/2010 0.44% 1.40%
+ACAP07/08/2010The Doctors Company (N/A)$386 million$41.50$41.3312/31/2010 0.41% 1.29%
+PPCO08/09/2010Endo Pharmaceuticals (ENDP)$144 million$5.00$4.9812/31/2010 0.40% 1.26%
+MAM03/12/2010Emera Inc (N/A)$75.7 million$45.00$44.8512/31/2010 0.33% 1.05%
+NYM07/15/2010ProSight (N/A)$230 million$25.75$25.6712/31/2010 0.31% 0.98%
+BSMD05/13/2010Merit Medical Systems (MMSI)$96 million$4.38$4.3709/30/2010 0.23% 3.48%
+SWSI08/09/2010Nabors Industries (NBR)$900 million$22.12$22.0809/30/2010 0.18% 2.76%
+UNCA08/13/2010IBM (IBM)$480 million$21.00$20.9712/31/2010 0.14% 0.45%
+HGRD07/28/2010an affiliate of the private equity firm Vestar Capital (N/A)$294 million$8.20$8.1909/30/2010 0.12% 1.86%
+SWWC03/03/2010Institutional Investors (N/A)$275 million$11.00$10.9909/13/2010 0.09% 4.74%
+MEND07/12/2010Johnson & Johnson (JNJ)$480 million$23.40$23.4009/30/2010 0.00% 0.00%
+DTPI08/24/2010PricewaterhouseCoopers (N/A)$378 million$12.50$12.5112/31/2010 -0.08% -0.25%
+CAL05/03/2010United (UAUA)$1.2 billion$23.63$23.6812/31/2010 -0.23% -0.73%
+SLRY09/01/2010Kenexa Corp. (KNXA)$80 million$4.07$4.0812/31/2010 -0.25% -0.77%
+VRX06/21/2010Biovail Corporation (BVF)$3.3 billion$59.44$59.9812/31/2010 -0.90% -2.83%
+ICXT08/16/2010FLIR Systems (FLIR)$274 million$7.55$7.6512/31/2010 -1.31% -4.11%
+TSFG05/17/2010TD Bank Financial Group (N/A)$61 million$0.28$0.283909/30/2010 -1.37% -20.89%
+PZZ08/16/2010Leonard Green & Partners (N/A)$363 million$8.50$8.6312/31/2010 -1.51% -4.74%
+ABII06/30/2010Celgene (CELG)$2.9 billion$71.94$74.2212/31/2010 -3.07% -9.65%
+CPII05/10/2010Comtech (CMTL)$472.3 million$13.81$14.4509/30/2010 -4.40% -66.92%
+COGT08/30/20103M Co. (MMM)$943 million$10.50$11.0112/31/2010 -4.63% -14.58%
+PTEC08/17/2010Marlin Equity Partners (N/A)$139 million$3.85$4.1412/31/2010 -7.00% -22.04%
+PTEC08/17/2010Marlin Equity Partners (N/A)$139 million$3.85$4.1412/31/2010 -7.00% -22.04%
+PAR08/28/2010Hewlett-Packard Company (HPQ)$2 billion$30.00$32.8912/31/2010 -8.79% -27.65%
+DYN08/13/2010Blackstone Group (BX)$4.7 billion$4.50$5.0412/31/2010 -10.71% -33.71%
+DTG04/26/2010Hertz (HTZ)$1.3 billion$38.99$48.3512/31/2010 -19.36% -60.93%
+CCE02/25/2010The Coca-Cola Company (KO)$12.3 billionN/A$29.3710/01/2010 N/A N/A

Voluntary Disclosure: I have tendered my shares of Portec Rail Products (PRPX) but plan to withdraw from the tender offer and sell my shares given the extension of the offer to December 30, 2010.