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Merger Arbitrage Mondays – September 13, 2010

  • September 13, 2010

Merger activity remained steady last week with four new deals announced and no deals closing.

Deal Statistics:

Total Number of Deals Closed in 201064
Total Number of Deals That Did Not Complete in 20105
Total Number of Pending Deals
Cash Deals48
Stock Deals10
Stock & Cash Deals12
Total Number of Pending Deals70

New Deals:

  1. The acquisition of Enterprise G.P. Holdings (EPE) by Enterprise products (EPD) for $8 billion. Under the deal, Enterprise GP unit holders would receive 1.5 Enterprise Products common units in exchange for each Enterprise GP unit.
  2. The acquisition of ResCare Inc (RSCR) by Canadian private equity firm Onex Corp for $390 million at $13.25 per share in cash.
  3. The acquisition of ZymoGenetics Inc. (ZGEN) by Bristol – Myers Squibb Co. for $885 million at $9.75 per share in cash. This deal represented a 84% premium to ZGEN’s closing price of $5.30 on the day of the announcement. The premium is even higher when you use the trading range of the last three months when the stock oscillated between $3.84 and $5.51. Time to buy a biotech ETF as a play on Big Pharma’s insatiable appetite for an acquired pipeline?
  4. The acquisition of Microtune (TUNE) by Zoran Corporation (ZRAN) for $84 million at $2.92 per share in cash.

Modified Deals:

  1. Comtech (CMTL) and CPI International (CPII) announced the termination of their merger agreement on September 07, 2010

Top 10 Deals With the Largest Spreads:

SymbolAnnounced
Date
Acquiring

Company

Closing
Price
Last

Price

Closing
Date
ProfitAnnu.
Profit
SSE02/23/2010Naugatuck Valley Financial Corp (NVSL)$7.25$6.0209/30/2010 20.43% 438.68%
TLCR06/07/2010Grifols (GRF.MC)$27.50$22.9412/31/2010 19.87% 66.54%
PINN02/24/2010Investor Group lead by Scotia Waterous (USA) (N/A)$0.34$0.3008/21/2010 13.33% 0.00%
AYE02/11/2010FirstEnergy (FE)$24.95$23.2603/31/2011 7.25% 13.29%
ADAM08/30/2010Ebix Inc. (EBIX)$5.82$5.4512/31/2010 6.72% 22.51%
ALY08/12/2010Seawell (N/A)$4.25$4.0112/31/2010 5.99% 20.04%
BGH06/11/2010Buckeye Partners LP (BPL)$44.17$42.4712/31/2010 4.00% 13.39%
BNE02/24/2010RR Donnelley (RRD)$11.50$11.0609/30/2010 3.98% 85.42%
VETS06/02/2010VCA Antech Inc (WOOF)$0.34$0.327409/30/2010 3.85% 82.63%
Q04/22/2010Century Link (CTL)$6.10$5.8904/21/2011 3.57% 5.92%

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$6.0209/30/2010 20.43% 438.68%
+TLCR06/07/2010Grifols (GRF.MC)$3.4 billion$27.49$22.9412/31/2010 19.85% 66.46%
+PINN02/24/2010Investor Group lead by Scotia Waterous (USA) (N/A)$11 million$0.34$0.3008/21/2010 13.33% 0.00%
+AYE02/11/2010FirstEnergy (FE)$8.5 billion$24.95$23.2603/31/2011 7.25% 13.29%
+ADAM08/30/2010Ebix Inc. (EBIX)$66 million$5.82$5.4512/31/2010 6.72% 22.51%
+ALY08/12/2010Seawell (N/A)$890 million$4.25$4.0112/31/2010 5.99% 20.04%
+BGH06/11/2010Buckeye Partners LP (BPL)$1.14 billion$44.17$42.4712/31/2010 4.00% 13.39%
+BNE02/24/2010RR Donnelley (RRD)$481 million$11.50$11.0609/30/2010 3.98% 85.42%
+VETS06/02/2010VCA Antech Inc (WOOF)$41.25 million$0.34$0.327409/30/2010 3.85% 82.63%
+Q04/22/2010Century Link (CTL)$10.6 billion$6.10$5.8904/21/2011 3.57% 5.92%
+PTV08/17/2010Reynolds Group Holdings (N/A)$6 billion$33.25$32.2212/31/2010 3.20% 10.70%
+DIVX06/02/2010Sonic Solutions (SNIC)$323 million$8.17$7.9309/30/2010 2.97% 63.70%
+CCBP08/09/2010F.N.B. Corporation (FNB)$70 million$39.29$38.301512/31/2010 2.59% 8.68%
+ATAC07/19/2010Genco Distribution System Inc. (N/A)$513 million$25.00$24.3712/31/2010 2.59% 8.66%
+SMTB07/15/2010People's United Financial Inc. (PBCT)$60 million$3.87$3.7912/31/2010 2.20% 7.36%
+EPE09/07/2010Enterprise Products (EPD)$8 billion$56.93$55.7512/31/2010 2.11% 7.06%
+NRGP08/09/2010Inergy (NRGY)$2.07 billion$29.70$29.1012/31/2010 2.06% 6.89%
+NAL08/19/2010First Niagara Financial Group (FNFG)$1.5 billion$12.86$12.6305/15/2011 1.81% 2.71%
+ME04/15/2010Apache (APA)$2.7 billion$23.77$23.3709/30/2010 1.73% 37.15%
+MFE08/19/2010Intel Corporation (INTC)$7.68 billion$48.00$47.2412/31/2010 1.61% 5.39%
+ALOY06/24/2010ZelnickMedia (N/A)$126.5 million$9.80$9.6512/31/2010 1.55% 5.21%
+PRPX02/17/2010L.B. Foster Co. (FSTR)$112 million$11.80$11.6212/30/2010 1.55% 5.24%
+XJT08/04/2010SkyWest (SKYW)$133 million$6.75$6.6512/31/2010 1.50% 5.04%
+WAIN06/29/2010Eastern Bank (N/A)$163 million$19.00$18.7412/31/2010 1.39% 4.65%
+MIR04/12/2010RRI Energy In. (RRI)$1.6 billion$10.63$10.4912/31/2010 1.35% 4.51%
+LSBX07/15/2010People's United Financial Inc. (PBCT)$96 million$21.00$20.7312/31/2010 1.30% 4.36%
+OMNI06/04/2010Wellspring Capital Management (N/A)$122 million$2.75$2.7211/15/2010 1.10% 6.39%
+BKC09/02/20103G Capital (N/A)$3.26 billion$24.00$23.7712/31/2010 0.97% 3.24%
+PSYS05/17/2010Universal Health (N/A)$3.1 billion$33.75$33.4312/31/2010 0.96% 3.21%
+MAM03/12/2010Emera Inc (N/A)$75.7 million$45.00$44.5812/31/2010 0.94% 3.15%
+OSTE08/17/2010Medtronic (MDT)$123 million$6.50$6.4412/31/2010 0.93% 3.12%
+HEW07/12/2010Aon Corp (AON)$4.9 billion$49.64$49.2411/15/2010 0.81% 4.70%
+NTY07/15/2010The Carlyle Group (N/A)$3.8 billion$55.00$54.5612/31/2010 0.81% 2.70%
+GLG05/17/2010Man Group (N/A)$1.6 billion$4.50$4.4709/30/2010 0.67% 14.41%
+PMACA06/10/2010Old Republic International (ORI)$228 million$7.18$7.1309/30/2010 0.67% 14.30%
+ACF07/22/2010General Motors Co. (N/A)$3.5 billion$24.50$24.3612/31/2010 0.57% 1.92%
+ADCT07/13/2010Tyco Electronics (TEL)$1.24 billion$12.75$12.6812/31/2010 0.55% 1.85%
+AMPH09/01/2010ProAssuarance (PRA)$233 million$32.50$32.3512/31/2010 0.46% 1.55%
+ACAP07/08/2010The Doctors Company (N/A)$386 million$41.50$41.3312/31/2010 0.41% 1.38%
+PPCO08/09/2010Endo Pharmaceuticals (ENDP)$144 million$5.00$4.9812/31/2010 0.40% 1.34%
+RSCR09/07/2010Onex Corp (N/A)$390 million$13.25$13.2012/31/2010 0.38% 1.27%
+WEL04/09/2010Halliburton Company (HAL)$240 million$3.00$2.9909/30/2010 0.33% 7.18%
+BXC07/22/2010Cerberus Capital Management (N/A)$111.1 million$3.40$3.3912/31/2010 0.29% 0.99%
+UNCA08/13/2010IBM (IBM)$480 million$21.00$20.9412/31/2010 0.29% 0.96%
+SLRY09/01/2010Kenexa Corp. (KNXA)$80 million$4.07$4.0612/31/2010 0.25% 0.82%
+HGRD07/28/2010an affiliate of the private equity firm Vestar Capital (N/A)$294 million$8.20$8.1809/30/2010 0.24% 5.25%
+DTPI08/24/2010PricewaterhouseCoopers (N/A)$378 million$12.50$12.4812/31/2010 0.16% 0.54%
+AEZ07/28/2010Hess Corp (HES)$450 million$7.47$7.4612/31/2010 0.16% 0.53%
+MEND07/12/2010Johnson & Johnson (JNJ)$480 million$23.40$23.3809/30/2010 0.09% 1.84%
+SWSI08/09/2010Nabors Industries (NBR)$900 million$22.12$22.1109/30/2010 0.05% 0.97%
+NYM07/15/2010ProSight (N/A)$230 million$25.75$25.7412/31/2010 0.04% 0.13%
+SWWC03/03/2010Institutional Investors (N/A)$275 million$11.00$11.0009/13/2010 0.00% 0.00%
+BSMD05/13/2010Merit Medical Systems (MMSI)$96 million$4.38$4.3809/30/2010 0.00% 0.00%
+ICXT08/16/2010FLIR Systems (FLIR)$274 million$7.55$7.5512/31/2010 0.00% 0.00%
+TUNE09/08/2010Zoran Corporation (ZRAN)$84 million$2.92$2.9212/31/2010 0.00% 0.00%
+ZGEN09/07/2010Bristol Myers Squibb Company (BMY)$885 million$9.75$9.7612/31/2010 -0.10% -0.34%
+CAL05/03/2010United (UAUA)$1.2 billion$21.88$21.9512/31/2010 -0.31% -1.04%
+VRX06/21/2010Biovail Corporation (BVF)$3.3 billion$64.59$64.9812/31/2010 -0.60% -2.02%
+TRBN08/12/2010Emergent BioSolution (EBS)$96.8 million$4.40$4.43212/31/2010 -0.78% -2.60%
+PZZ08/16/2010Leonard Green & Partners (N/A)$363 million$8.50$8.6012/31/2010 -1.16% -3.89%
+TSFG05/17/2010TD Bank Financial Group (N/A)$61 million$0.28$0.28509/30/2010 -1.75% -37.67%
+ABII06/30/2010Celgene (CELG)$2.9 billion$72.51$74.7712/31/2010 -3.02% -10.12%
+COGT08/30/20103M Co. (MMM)$943 million$10.50$10.9312/31/2010 -3.93% -13.17%
+PTEC08/17/2010Marlin Equity Partners (N/A)$139 million$3.85$4.0912/31/2010 -5.87% -19.65%
+PTEC08/17/2010Marlin Equity Partners (N/A)$139 million$3.85$4.0912/31/2010 -5.87% -19.65%
+PAR08/28/2010Hewlett-Packard Company (HPQ)$2 billion$30.00$32.9212/31/2010 -8.87% -29.70%
+DYN08/13/2010Blackstone Group (BX)$4.7 billion$4.50$5.0512/31/2010 -10.89% -36.47%
+DTG04/26/2010Hertz (HTZ)$1.3 billion$39.20$48.0112/31/2010 -18.35% -61.46%
+ATBC05/10/2010Jacksonville Bancorp (JAXB)N/A$2.30$3.4209/30/2010 -32.87% -705.65%
+CCE02/25/2010The Coca-Cola Company (KO)$12.3 billionN/A$30.1710/01/2010 N/A N/A

Contributing author: Ann Kumar