Merger Arbitrage Mondays – December 13, 2010

  • December 13, 2010

Merger activity remained steady last week with four new deals announced and two deals closing. You can find all the deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours. Based on feedback we received from some of you, the tool has been updated to add two new columns. These two new columns are deal type (all cash, all stock or cash plus stock) and the average daily volume.

As always we welcome your feedback about the Merger Arbitrage tool, the format of these emails or any updates to deals that we may have missed.

Deal Statistics:

Total Number of Deals Closed in 2010128
Total Number of Deals That Did Not Complete in 20107
Total Number of Pending Deals
Cash Deals49
Stock Deals14
Stock & Cash Deals10
Total Number of Pending Deals73


New Deals:

  1. The acquisition of Mercer Insurance Group Inc. (MIGP) by United Fire & Casualty Company (UFCS) for $191 million or $28.25 per share in cash.
  2. The acquisition of Eurand N.X. (EURX) by Axcan Holdings for $583 million or $12.00 per share in cash.
  3. The acquisition of Nicor Inc. (GAS) by AGL Resources Inc. (AGL) for $2.4 billion or $53 per share in a cash plus stock deal where Nicor holders will receive $21.20 in cash and 0.8382 share of AGL for each share of Nicor they own.
  4. The acquisition of Center Financial Corporation (CLFC) by Nara Bancorp Inc. (NARA) for $285.7 million or 0.7804 of a share of Nara Bancorp common stock in exchange for each share of Center Financial common stock in an all stock deal.


Deal Updates:

  1. The Blackstone Group (BX) and Dynegy (DYN) scrapped their merger agreement after a shareholder meeting on December 06, 2010.
  2. LTX-Credence (LTXCwas lower by over 12 percent on December 06, 2010 after the company that is supposed to acquire it, Verigy (VRGY), announced that Advantest (ATE)  made a $12.15 per share unsolicited offer for the company. Hence this deal currently has the largest spread as you can see from the table below. Since the LTXC – VRGY deal has not been officially called off, we continue to list it for now.


Closed Deals:

  1. The acquisition of ADC Telecommunications (ADCT) by Tyco Electronics (TEL) on December 09, 2010
  2. The acquisition of Keithley Instruments (KEI) by Danaher Corporation (DHR) on December 10, 2010


Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnu.
Profit
LTXC11/18/2010Verigy Ltd (VRGY)$12.72$7.5606/30/201168.25%125.19%
TLCR06/07/2010Grifols (GRF.MC)$27.62$22.2903/31/201123.90%80.76%
DTG04/26/2010Avis (CAR)$55.68$47.9112/31/201016.21%328.71%
MAJC09/21/2010Bayside Capital Partners (N/A)$4.50$4.2003/31/20117.14%24.14%
SHMR10/15/2010Essilor (N/A)$14.50$13.6506/30/20116.23%11.42%
PNNW11/12/2010City of Nashua (N/A)$29.00$27.3809/30/20115.92%7.42%
HYC11/17/2010Verifone Systems (PAY)$9.25$8.7409/30/20115.82%7.29%
MROE10/06/2010Old National Bancorp (ONB)$14.27$13.6803/31/20114.29%14.51%
OPTC11/11/2010TKH Group (N/A)$2.45$2.3503/31/20114.26%14.38%
PVG09/21/2010Penn Virginia Resource Partners (PVR)$28.07$26.9412/31/20104.18%84.84%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.


 SymbolAnnounced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Vol.Closing

Date

ProfitAnnu.
Profit
+LTXC11/18/2010Verigy Ltd (VRGY)All Stock$422 million$12.72$7.561,861,80906/30/2011 68.25% 125.19%
+TLCR06/07/2010Grifols (GRF.MC)Cash Plus Stock$3.4 billion$27.62$22.29424,40503/31/2011 23.90% 80.76%
+DTG04/26/2010Avis (CAR)Cash Plus Stock$1.56 billion$55.68$47.91358,63512/31/2010 16.21% 328.71%
+MAJC09/21/2010Bayside Capital Partners (N/A)All Cash$7.8 million$4.50$4.2034,73003/31/2011 7.14% 24.14%
+SHMR10/15/2010Essilor (N/A)All Cash$130 million$14.50$13.6558,79006/30/2011 6.23% 11.42%
+PNNW11/12/2010City of Nashua (N/A)All Cash$138 million$29.00$27.384,81509/30/2011 5.92% 7.42%
+HYC11/17/2010Verifone Systems (PAY)All Stock$485 million$9.25$8.74328,02809/30/2011

5.82%

7.29%
+MROE10/06/2010Old National Bancorp (ONB)All Stock$83.5 million$14.27$13.6835,28503/31/2011 4.29% 14.51%
+OPTC11/11/2010TKH Group (N/A)All CashN/A$2.45$2.3555,62003/31/2011 4.26% 14.38%
+PVG09/21/2010Penn Virginia Resource Partners (PVR)All Stock$954 million$28.07$26.94109,12212/31/2010 4.18% 84.84%
+AAI09/27/2010Southwest Airlines (LUV)Cash Plus Stock$1.4 billion$7.75$7.46922,01403/31/2011 3.89% 13.14%
+CRXL10/06/2010Johnson & Johnson (JNJ)All Cash$2.41 billion$32.70$31.5147,31603/31/2011 3.79% 12.81%
+VCGH11/10/2010Company's chairman of the Board, CEO, President and COO (N/A)All Cash$37 million$2.25$2.1862,48003/31/2011 3.21% 10.85%
+ROME10/12/2010Berkshire Hills Bancorp (BHLB)All Stock$74 million$11.80$11.4435,64603/31/2011 3.12% 10.54%
+BUCY11/15/2010Caterpillar Inc (CAT)All Cash$8.6 billion$92.00$89.371,483,47706/30/2011 2.94% 5.40%
+GAS12/07/2010AGL Resources Inc. (AGL)Cash Plus Stock$2.4 billion$51.32$49.89712,52909/30/2011 2.86% 3.59%
+AYE02/11/2010FirstEnergy (FE)All Stock$8.5 billion$23.78$23.121,682,16803/31/2011 2.85% 9.63%
+MCCC11/15/2010Chief Executive Rocco Commisso (N/A)All Cash$600 million$8.75$8.53926,21006/30/2011 2.58% 4.73%
+CLFC12/09/2010Nara Bancorp Inc. (NARA)All Stock$285.7 million$7.33$7.15665,75909/30/2011 2.49% 3.12%
+ADAM08/30/2010Ebix Inc. (EBIX)All Stock$66 million$7.01$6.8499255,90612/31/2010 2.37% 47.99%
+NOVL11/22/2010Attachment Corporation (N/A)All Cash$2.2 billion$6.10$5.963,902,84903/31/2011 2.35% 7.94%
+NAL08/19/2010First Niagara Financial Group (FNFG)Cash Plus Stock$1.5 billion$14.65$14.33554,61805/15/2011 2.25% 5.36%
+MFE08/19/2010Intel Corporation (INTC)All Cash$7.68 billion$48.00$46.97603,01906/30/2011 2.19% 4.02%
+EURX12/01/2010Axcan Holdings, Inc. (N/A)All Cash$583 million$12.00$11.77439,45506/30/2011 1.95% 3.58%
+WL11/01/2010M & T Bank Corporation (MTB)All Stock$351 million$4.37$4.291,770,48706/30/2011 1.81% 3.32%
+OCNW09/16/2010Calix Inc. (CALX)Cash Plus Stock$171 million$8.49$8.3644,67812/31/2010 1.52% 30.90%
+Q04/22/2010Century Link (CTL)All Stock$10.6 billion$7.43$7.3338,306,48404/21/2011 1.32% 3.72%
+MIGP12/01/2010United Fire & Casualty (UFCS)All Cash$191 million$28.25$27.947,12903/31/2011 1.11% 3.75%
+ID09/20/2010Safran (N/A)All Cash$1.1 billion$12.00$11.87620,79203/31/2011 1.10% 3.70%
+VOLT11/29/2010Mellanox Technologies, Ltd. (MLNX)All Cash$176 million$8.75$8.6643,97103/31/2011 1.04% 3.51%
+LDSH11/17/2010Allegheny Technologies (ATI)Cash Plus Stock$778 million$48.32$47.8681,95203/31/2011 0.97% 3.28%
+DLM11/25/2010Kohlberg Kravis Roberts & Co (KKR)All Cash$4 billion$19.00$18.844,141,11403/31/2011 0.85% 2.87%
+CFS11/02/2010affiliate of ABRY Partners (N/A)All Cash$84.8 million$2.50$2.4847,14412/31/2010 0.81% 16.35%
+CPII11/26/2010Veritas Capital (N/A)All Cash$525 million$19.50$19.3545,87112/31/2069 0.78% 0.01%
+ACV09/27/2010Unilever PLC (N/A)All Cash$3.7 billion$37.50$37.231,906,43912/31/2010 0.73% 14.71%
+BJGP10/28/2010Sanofi – aventis (N/A)All Cash$520.6 million$10.00$9.93121,46203/31/2011 0.70% 2.38%
+PRPX02/17/2010L.B. Foster Co. (FSTR)All Cash$112 million$11.80$11.72184,00112/30/2010 0.68% 14.66%
+TCM11/01/2010Hanmax Investment Limited (N/A)All CashN/A$4.50$4.4711,90803/31/2011 0.67% 2.27%
+NUHC09/20/2010Arrow Electronics (ARW)All Cash$130 million$7.00$6.9624,87712/31/2010

0.57%

11.65%
+MAM03/12/2010Emera Inc (N/A)All Cash$75.7 million$45.00$44.75N/A12/31/2010 0.56% 11.33%
+CTV10/25/2010Carlyle (N/A)All Cash$3 billion$31.50$31.343,271,43503/31/2011 0.51% 1.73%
+SVR10/28/2010Carlyle (N/A)All Cash$2.6 billion$31.00$30.85409,31203/31/2011 0.49% 1.64%
+NCOC09/28/2010Ranger Energy Investments (N/A)All Cash$8.6 million$1.00$0.995214,35212/15/2010 0.48% 88.02%
+NHWK09/27/2010Virtual Radiologic (N/A)All Cash$170 million$6.50$6.4751,86703/31/2011 0.46% 1.57%
+TTES10/06/2010Robbins & Myers Inc. (RBN)Cash Plus Stock$422 million$38.95$38.7825,00912/31/2010 0.45% 9.09%
+ROAC10/18/2010Swenson Granite Co. (N/A)All Cash$39 million$5.25$5.23N/A03/31/2011 0.38% 1.29%
+FMR10/28/2010Fairfax Financial Holdings (FRFHF.PK)All Cash$294 million$16.50$16.4425,62003/31/2011 0.36% 1.23%
+ARTG11/02/2010Oracle (ORCL)All Cash$1 billion$6.00$5.981,102,05803/31/2011 0.33% 1.13%
+ACTI10/11/2010Assa Abloy (N/A)All Cash$162 million$3.25$3.2462,32112/31/2010 0.31% 6.26%
+INET09/20/2010an affiliate of Hellman & Friedman Capital Partners (N/A)All Cash$640 million$13.35$13.31672,46112/31/2010

0.30%

6.09%
+KG10/12/2010Pfizer Inc. (PFE)All Cash$3.6 billion$14.25$14.211,275,16212/31/2010 0.28% 5.71%
+BEZ11/29/2010ABB Ltd (ABB)All Cash$4.2 billion$63.50$63.381,592,63803/31/2011 0.19% 0.64%
+ACLI10/18/2010Affiliates of Platinum Equity (N/A)All Cash$777 million$33.00$32.95105,78512/31/2010 0.15% 3.08%
+AEZ07/28/2010Hess Corp (HES)All Stock$450 million$10.23$10.22173,01912/31/2010

0.11%

2.30%
+CLRT10/22/2010GE Healthcare (GE)All Cash$580 million$5.00$4.995167,64101/31/2011 0.10% 0.75%
+ISLN11/15/2010EMC Corporation (EMC)All Cash$2.25 billion$33.85$33.82567,75012/31/2010 0.09% 1.80%
+CLU09/16/2010Clearwater Paper Corporation (CLW)All Cash$247 million$12.00$11.9916,13712/31/2010 0.08% 1.69%
+CCBP08/09/2010F.N.B. Corporation (FNB)Cash Plus Stock$70 million$43.79$43.7550012/31/2010 0.08% 1.62%
+RSCR09/07/2010Onex Corp (N/A)All Cash$390 million$13.25$13.2457,76112/31/2010 0.08% 1.53%
+PZZ08/16/2010Leonard Green & Partners (N/A)All Cash$363 million$8.50$8.5032,76112/31/2010

0.00%

0.00%
+STU09/17/2010Discover Financial Services (N/A)All CashN/A$30.00$30.0011,78712/31/2010 0.00% 0.00%
+ATLS11/09/2010Chevron Coproation (CVX)All Cash$4.3 billion$43.34$43.491,020,39403/31/2011 -0.34% -1.17%
+NST10/18/2010Northeast Utilities (NU)All Stock$4.17 billion$41.55$41.81214,01709/30/2011

-0.62%

-0.78%
+JCG11/23/2010private equity firms TPG Capital and Leonard Green & Partners (N/A)All Cash$3 billion$43.50$43.81759,53903/31/2011 -0.71% -2.39%
+TEAM11/02/2010fanini International Holdings Ltd for $93.4 million (N/A)All Cash$93.4 million$8.35$8.4423,76612/31/2010 -1.07% -21.62%
+CGC10/01/2010Gammon Gold (GRS)Cash Plus Stock$288 million$4.84$4.95618,65112/31/2010 -2.17% -44.00%
+RAE09/20/2010Battery Ventures (N/A)All Cash$95 million$1.60$1.64357,48412/31/2010 -2.44% -49.46%
+GIW10/25/2010Community Bank System (CBU)All Cash$101.8 million$9.50$9.7421,96502/15/2011 -2.46% -14.05%
+DVD09/27/2010Dover Downs Gaming & Entertainment Inc (DDE)All StockN/A$1.71$1.81133,19512/31/2010 -5.39% -109.26%
+CADE10/06/2010Community Bancorp LLC (N/A)All Stock$38 million$2.25$2.4515,22003/31/2011 -8.31% -28.07%
+HBE10/06/2010Kratos Defense & Security Solutions (KTOS)All Cash$45 million$7.00$8.195,80712/31/2010 -14.53% -294.63%
+DDMX10/01/2010Greenbriar Equity Group (N/A)All Cash$210 million$21.25$25.2615,58602/15/2011 -15.87% -90.54%
+ALY08/12/2010Seawell (N/A)All Cash$890 million$4.25$5.71209,89312/31/2010 -25.57% -518.49%

Voluntary Disclosure: I have a long position in AAI and a short position in LUV. I also have a long position in FNFG.

Contributing Author: Ann Kumar