Merger Arbitrage Mondays – March 21, 2011

Merger activity increased last week with four new deals announced and two deals closing. Over the weekend, AT&T (T) announced that it was buying T-Mobile USA in a deal worth $39 billion. Sprint’s (S) stock had trended upwards in recent week on expectations that it would merge with T-Mobile. This announcement by AT&T could put some downward pressure on Sprint stock in the short-term but I think consolidation in the industry will prove to be beneficial in the long-term.

We have not included the AT&T deal in the new deals section below because T-Mobile is a unit of Deutsche Telekom (DTEGY.PK).

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 Lubrizol Corporation (LZ) by Berkshire Hathaway for $9.7 billion or $135 per share in cash.
2. The acquisition of Animal Health International (AHII) by Lextron for $251 million or $4.25 per share in cash.
3. The acquisition of K-Sea Transportation Partners (KSP) by Kirby Corporation (KEX) for $335.3 million. Upon completion of the merger, K-Sea’s common unitholders will have the right to elect to receive either (a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of Kirby’s common stock for each common unit. K-Sea’s preferred unit holders will receive $4.075 in cash and 0.0734 of a share of Kirby’s common stock for each preferred unit. K-Sea’s general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for K-Sea’s incentive distribution rights.
4. The acquisition of Celera Corporation (CRA) by Quest Diagnostics (DGX) for $344 million or $8.00 per share in cash.

Closed Deals:

1. The acquisition of Jo-Ann Stores (JAS) by Leonard Green & Partners LP on March 18, 2011.
2. The acquisition of Genoptix by Novartis AG on March 14, 2011.

Updated Deals:

1. Chile’s LAN Airlines (LFL) said a regulatory investigation into complaints about the merger could take between 6 to 9 months and the merger will most likely not complete before the fourth quarter. We have updated the closing date to 12/31/2011.

Top 10 Deals with largest spreads:

List of all pending deals:

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

Voluntary Disclosure: I have a long positions in Sprint (S) and First Niagara (FNFG)