Merger Arbitrage Mondays – April 04, 2011
Merger activity increased last week with six new deals announced and four deals closing.
I received an email over the weekend from someone who was new to the Merger Arbitrage strategy and wanted to learn more about it. I pointed him to my article on the Pfizer – Wyeth deal, which provides an introduction to the strategy for the uninitiated. I would also recommend reading the article John Paulson On The “Risk” In Risk Arbitrage by the folks at market folly.
|Total Number of Deals Closed in 2011||43|
|Total Number of Deals Not Completed in 2011||1|
|Total Number of Pending Deals|
|Stock & Cash Deals||13|
|Total Number of Pending Deals||81|
- The acquisition of Verigy (VRGY) by Advantest (ATE) for $1.1 billion or $15.00 per share in cash. Verigy announced the Advantest offer in December but the deal was finalized last week.
- The acquisition of Rural/Metro Corporation (RURL) by Warburg Pincus for $17.25 per share in cash. I had traded Rural a couple of times over the last year based on insider purchases by the CEO as you can see here.
- The acquisition of GSI Commerce (GSIC) by eBay Inc. (EBAY) for $2.4 billion or $29.25 per share in cash
- The acquisition of Spectrum control (SPEC) by API Technologies for $270 million or $20.00 per share in cash
- The acquisition of Technology Research (TRCI) by Coleman Cable (CCIX) for $51.5 million or $7.20 per share in cash
- The acquisition of GS Financial Corp (GSLA) by Home Bancorp (HBCP) for $26.2 million or $21.00 per share in cash
- Mentor Graphics (MENT) board rejects Icahn’s bid, says strategic plan is better for shareholders.
- On April 3, 2011 RAE Systems announced a revised higher offer of $1.88 per share by Vector Capital, a 7.4% increase from the previous offer of $1.75 per share. The revised offer was precipitated as a result of a competing offer of $1.90 per share by Battery Ventures, which was not determined to be a “superior offer” by the board.
- The Nasdaq (NDAQ) and ICE have made a joint offer for NYSE Euronext (NYX) that was worth $43 as of Friday’s close. Since NYX has not officially called off its merger with Deutsche Börse, the table below has not been updated to reflect the Nasdaq offer.
- The acquisition of Rome Bancorp (ROME) by Berkshire Hills Corporation (BHLB) on April 01, 2011
- The acquisition of Mercer Insurance Group (MIGP) by United Fire & Casualty Company on March 28, 2011
- The acquisition of Herley Industries (HRLY) by Kratos Defense & Security Solutions (KTOS) on March 31, 2011
- The acquisition of Qwest (Q) by CenturyLink (CTL) on April 1, 2011.
Top 10 Deals with largest spreads:
|TAM||01/19/2011||LAN Airlines S.A. (LFL)||$23.61||$20.29||12/31/2011|
|CASB||03/04/2011||Opus Bank (N/A)||$0.45||$0.42||06/30/2011|
|DNBK||01/20/2011||People's United Financial Inc. (PBCT)||$23.00||$21.49||06/30/2011||
|RAE||01/18/2011||Vector Capital (N/A)||$1.88||$1.76||06/30/2011||
|TGE||03/21/2011||Dawson Geophysical Company (DWSN)||$8.41||$7.87||08/15/2011||
|HYC||11/17/2010||Verifone Systems (PAY)||$12.55||$11.97||09/30/2011||
|AAI||09/27/2010||Southwest Airlines (LUV)||$7.75||$7.46||06/30/2011|
List of all pending deals: