Merger Arbitrage Mondays – September 20, 2010

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

Deal Statistics:

Total Number of Deals Closed in 2010 69
Total Number of Deals That Did Not Complete in 2010 5
Total Number of Pending Deals
Cash Deals 47
Stock Deals 10
Stock & Cash Deals 13
Total Number of Pending Deals 70

New Deals:

  1. The acquisition of ArcSight Inc. (ARST) by Hewlett-Packard (HPQ) for $1.5 billion at $43.50 per share in cash
  2. The acquisition of OTIX Global Inc. (OTIX) by William Demant for $50 million at $8.60 per share in cash
  3. The acquisition of O.I. Corporation (OICO) by ITT Corporation (ITT) for $29 million at $12.50 per share in cash
  4. The acquisition of Occam Networks Inc. (OCNW) by Telco equipment maker Calix Inc. (CALX) for $171 million at $7.75 per share in cash and stock.
  5. The acquisition of Cellu Tissue Holdings (CLU) by Clearwater Paper Corp. (CLW) for $247 million at $12 per share in cash

Modified Deals and Other News:

  1. Hertz (HTZ) raised its offer for Dollar Thrifty Automotive Group Inc. (DTG)  to $50 a share, or about $1.56 billion, topping a proposal from Avis Budget Group Inc. (CAR)
  2. Jefferies & Company reiterates its Hold rating on Allegheny Energy (AYE) and lowers its price target to $23.50, from $24.50.
  3. On September 15, 2010, Pet DRx Corporation (VETS) (the “Company”) received a Nasdaq Staff Determination letter notifying the Company that it will be delisted from The Nasdaq Stock Market
  4. Naugatuck Valley Financial Corporation (NVSL) and Southern Connecticut Bancorp (SSE) announced on September 17, 2010  that they have amended certain terms of their Agreement and Plan of Merger, under which SCBI shareholders will be entitled to receive $6.75 per share of SCBI common stock owned. The acquisition is expected to be completed in the fourth calendar quarter of 2010 or in early 2011.


Closed Deals:

  1. The acquisition of Biosphere Medical (BSMD) by Merit Medical Systems Inc. on September 13, 2010
  2. The acquisition of SouthWest Water Company (SWWC) by Institutional Investors advised by J.P. Morgan Asset Management and Water Asset Management, LLC on September 13, 2010

Top 10 Deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annu.
Profit
TLCR 06/07/2010 Grifols (GRF.MC) $27.39 $22.95 12/31/2010 19.36% 69.29%
SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $6.75 $6.00 12/31/2010 12.50% 44.73%
ADAM 08/30/2010 Ebix Inc. (EBIX) $5.92 $5.54 12/31/2010 6.79% 24.30%
ALY 08/12/2010 Seawell (N/A) $4.25 $4.01 12/31/2010 5.99% 21.42%
AYE 02/11/2010 FirstEnergy (FE) $24.22 $22.86 03/31/2011 5.94% 11.30%
SMTB 07/15/2010 People's United Financial Inc. (PBCT) $3.85 $3.68 12/31/2010 4.71% 16.85%
Q 04/22/2010 Century Link (CTL) $6.45 $6.18 04/21/2011 4.44% 7.62%
OCNW 09/16/2010 Calix Inc. (CALX) $7.48 $7.17 12/31/2010 4.26% 15.24%
BGH 06/11/2010 Buckeye Partners LP (BPL) $43.82 $42.05 12/31/2010 4.22% 15.09%
BNE 02/24/2010 RR Donnelley (RRD) $11.50 $11.07 09/30/2010 3.88% 141.78%

List of all Pending Deals:

  Symbol Announced
Date
Acquiring
Company
Closing
Value
Closing
Price
Last
Price
Closing
Date
Profit Annu.

Profit

+ TLCR 06/07/2010 Grifols (GRF.MC) $3.4 billion $27.39 $22.95 12/31/2010 19.36% 69.29%
+ SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $19.5 million $6.75 $6.00 12/31/2010 12.50% 44.73%
+ ADAM 08/30/2010 Ebix Inc. (EBIX) $66 million $5.92 $5.54 12/31/2010 6.79% 24.30%
+ ALY 08/12/2010 Seawell (N/A) $890 million $4.25 $4.01 12/31/2010 5.99% 21.42%
+ AYE 02/11/2010 FirstEnergy (FE) $8.5 billion $24.22 $22.86 03/31/2011 5.94% 11.30%
+ SMTB 07/15/2010 People's United Financial Inc. (PBCT) $60 million $3.85 $3.68 12/31/2010 4.71% 16.85%
+ Q 04/22/2010 Century Link (CTL) $10.6 billion $6.45 $6.18 04/21/2011 4.44% 7.62%
+ OCNW 09/16/2010 Calix Inc. (CALX) $171 million $7.48 $7.17 12/31/2010 4.26% 15.24%
+ BGH 06/11/2010 Buckeye Partners LP (BPL) $1.14 billion $43.82 $42.05 12/31/2010 4.22% 15.09%
+ BNE 02/24/2010 RR Donnelley (RRD) $481 million $11.50 $11.07 09/30/2010 3.88% 141.78%
+ TSFG 05/17/2010 TD Bank Financial Group (N/A) $61 million $0.28 $0.2721 09/30/2010 2.90% 105.97%
+ PRPX 02/17/2010 L.B. Foster Co. (FSTR) $112 million $11.80 $11.48 12/30/2010 2.79% 10.07%
+ EPE 09/07/2010 Enterprise Products (EPD) $8 billion $57.32 $55.80 12/31/2010 2.72% 9.72%
+ CCBP 08/09/2010 F.N.B. Corporation (FNB) $70 million $39.50 $38.57 12/31/2010 2.41% 8.64%
+ OTIX 09/13/2010 William Demant (N/A) $50 million $8.60 $8.40 12/31/2010 2.38% 8.52%
+ PTV 08/17/2010 Reynolds Group Holdings (N/A) $6 billion $33.25 $32.49 12/31/2010 2.34% 8.37%
+ OMNI 06/04/2010 Wellspring Capital Management (N/A) $122 million $2.75 $2.69 11/15/2010 2.23% 14.54%
+ ATAC 07/19/2010 Genco Distribution System Inc. (N/A) $513 million $25.00 $24.47 12/31/2010 2.17% 7.75%
+ NRGP 08/09/2010 Inergy (NRGY) $2.07 billion $29.84 $29.23 12/31/2010 2.08% 7.44%
+ OICO 09/14/2010 ITT Corporation (ITT) $29 million $12.50 $12.25 12/31/2010 2.04% 7.30%
+ DIVX 06/02/2010 Sonic Solutions (SNIC) $323 million $8.09 $7.97 09/30/2010 1.48% 54.11%
+ MFE 08/19/2010 Intel Corporation (INTC) $7.68 billion $48.00 $47.30 12/31/2010 1.48% 5.30%
+ MIR 04/12/2010 RRI Energy In. (RRI) $1.6 billion $10.09 $9.96 12/31/2010 1.33% 4.76%
+ LSBX 07/15/2010 People's United Financial Inc. (PBCT) $96 million $21.00 $20.73 12/31/2010 1.30% 4.66%
+ WAIN 06/29/2010 Eastern Bank (N/A) $163 million $19.00 $18.76 12/31/2010 1.28% 4.58%
+ ME 04/15/2010 Apache (APA) $2.7 billion $23.90 $23.63 09/30/2010 1.15% 42.05%
+ NAL 08/19/2010 First Niagara Financial Group (FNFG) $1.5 billion $12.52 $12.38 05/15/2011 1.11% 1.72%
+ CLU 09/16/2010 Clearwater Paper Corporation (CLW) $247 million $12.00 $11.87 12/31/2010 1.10% 3.92%
+ MAM 03/12/2010 Emera Inc (N/A) $75.7 million $45.00 $44.53 12/31/2010 1.06% 3.78%
+ ALOY 06/24/2010 ZelnickMedia (N/A) $126.5 million $9.80 $9.70 12/31/2010 1.03% 3.69%
+ PMACA 06/10/2010 Old Republic International (ORI) $228 million $7.40 $7.33 09/30/2010 0.92% 33.61%
+ XJT 08/04/2010 SkyWest (SKYW) $133 million $6.75 $6.69 12/31/2010 0.90% 3.21%
+ BKC 09/02/2010 3G Capital (N/A) $3.26 billion $24.00 $23.80 12/31/2010 0.84% 3.01%
+ PSYS 05/17/2010 Universal Health (N/A) $3.1 billion $33.75 $33.47 12/31/2010 0.84% 2.99%
+ GLG 05/17/2010 Man Group (N/A) $1.6 billion $4.50 $4.47 09/30/2010 0.67% 24.50%
+ OSTE 08/17/2010 Medtronic (MDT) $123 million $6.50 $6.46 12/31/2010 0.62% 2.22%
+ AMPH 09/01/2010 ProAssuarance (PRA) $233 million $32.50 $32.31 12/31/2010 0.59% 2.10%
+ ACF 07/22/2010 General Motors Co. (N/A) $3.5 billion $24.50 $24.38 12/31/2010 0.49% 1.76%
+ ADCT 07/13/2010 Tyco Electronics (TEL) $1.24 billion $12.75 $12.69 12/31/2010 0.47% 1.69%
+ RSCR 09/07/2010 Onex Corp (N/A) $390 million $13.25 $13.19 12/31/2010 0.45% 1.63%
+ HEW 07/12/2010 Aon Corp (AON) $4.9 billion $49.86 $49.66 11/15/2010 0.41% 2.65%
+ DTPI 08/24/2010 PricewaterhouseCoopers (N/A) $378 million $12.50 $12.45 12/31/2010 0.40% 1.44%
+ ACAP 07/08/2010 The Doctors Company (N/A) $386 million $41.50 $41.36 12/31/2010 0.34% 1.21%
+ NTY 07/15/2010 The Carlyle Group (N/A) $3.8 billion $55.00 $54.82 12/31/2010 0.33% 1.17%
+ NYM 07/15/2010 ProSight (N/A) $230 million $25.75 $25.68 12/31/2010 0.27% 0.98%
+ SLRY 09/01/2010 Kenexa Corp. (KNXA) $80 million $4.07 $4.06 12/31/2010 0.25% 0.88%
+ UNCA 08/13/2010 IBM (IBM) $480 million $21.00 $20.955 12/31/2010 0.21% 0.77%
+ PPCO 08/09/2010 Endo Pharmaceuticals (ENDP) $144 million $5.00 $4.99 12/31/2010 0.20% 0.72%
+ MEND 07/12/2010 Johnson & Johnson (JNJ) $480 million $23.40 $23.37 09/30/2010 0.13% 4.69%
+ HGRD 07/28/2010 an affiliate of the private equity firm Vestar Capital (N/A) $294 million $8.20 $8.19 09/30/2010 0.12% 4.46%
+ ZGEN 09/07/2010 Bristol Myers Squibb Company (BMY) $885 million $9.75 $9.74 12/31/2010 0.10% 0.37%
+ CAL 05/03/2010 United (UAUA) $1.2 billion $23.05 $23.04 12/31/2010 0.03% 0.12%
+ BXC 07/22/2010 Cerberus Capital Management (N/A) $111.1 million $3.40 $3.40 12/31/2010 0.00% 0.00%
+ TUNE 09/08/2010 Zoran Corporation (ZRAN) $84 million $2.92 $2.92 12/31/2010 0.00% 0.00%
+ AEZ 07/28/2010 Hess Corp (HES) $450 million $7.55 $7.55 12/31/2010 -0.03% -0.12%
+ ICXT 08/16/2010 FLIR Systems (FLIR) $274 million $7.55 $7.56 12/31/2010 -0.13% -0.47%
+ ARST 09/13/2010 Hewlett-Packard Company (HPQ) $1.5 billion $43.50 $43.57 12/31/2010 -0.16% -0.57%
+ WEL 04/09/2010 Halliburton Company (HAL) $240 million $3.00 $3.01 09/30/2010 -0.33% -12.13%
+ VRX 06/21/2010 Biovail Corporation (BVF) $3.3 billion $64.14 $64.60 12/31/2010 -0.71% -2.54%
+ PZZ 08/16/2010 Leonard Green & Partners (N/A) $363 million $8.50 $8.63 12/31/2010 -1.51% -5.39%
+ TRBN 08/12/2010 Emergent BioSolution (EBS) $96.8 million $4.39 $4.51 12/31/2010 -2.75% -9.83%
+ ABII 06/30/2010 Celgene (CELG) $2.9 billion $72.46 $75.08 12/31/2010 -3.49% -12.49%
+ COGT 08/30/2010 3M Co. (MMM) $943 million $10.50 $10.96 12/31/2010 -4.20% -15.02%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $4.02 12/31/2010 -4.23% -15.13%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $4.02 12/31/2010 -4.23% -15.13%
+ DYN 08/13/2010 Blackstone Group (BX) $4.7 billion $4.50 $4.79 12/31/2010 -6.05% -21.66%
+ PAR 08/28/2010 Hewlett-Packard Company (HPQ) $2 billion $30.00 $32.96 12/31/2010 -8.98% -32.14%
+ ATBC 05/10/2010 Jacksonville Bancorp (JAXB) N/A $2.20 $2.4201 09/30/2010 -9.09% -331.96%
+ DTG 04/26/2010 Hertz (HTZ) $1.56 billion $39.80 $51.00 12/31/2010 -21.97% -78.61%
+ CCE 02/25/2010 The Coca-Cola Company (KO) $12.3 billion N/A $30.19 10/01/2010 N/A N/A

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