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Merger Arbitrage Mondays – January 3, 2011

  • January 3, 2011

Merger activity decreased last week with two new deals announced and four deals closing.

You can find all the deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

Deal Statistics:

New Deals:

  1. The acquisition of NGAS Resources Inc. (NGAS) by Magnum Hunter Resources Corp. (MHR) for $98 million in an all stock deal, where NGAS Resources Inc. shareholders will receive 0.0846 shares of Magnum Hunter Resources Corp. in exchange for each share of NGAS Resources Inc.
  2. The acquisition of Universal American Corp’s (UAM) Medicare Prescription Drug Business by CVS Caremark Corporation (CVS). UAM shareholders will receive $12.80 to $13 in cash and a share in a newly formed public company, which will own all the other operations of UAM. The newly formed company will have $640 million of cash and statutory capital in its subsidiaries and no debt. The structure of this deal reminds me of the Coca-Cola (KO) – Coca Cola Enterprises (CCE), which turned out to be a profitable merger arbitrage opportunity.

Closed Deals:

  1. The acquisition of ActivIdentity Corporation (ACTI) by Assa Abloy on December 27, 2010.
  2. The acquisition of Cellu Tissue Holdings Inc. (CLU) by Clearwater Paper Corporation (CLW) on December 27, 2010.
  3. The acquisition of Portec Rail Products, Inc. (PRPX) by L.B. Foster Co. (FSTR) on December 29, 2010.

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