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Merger Arbitrage Mondays – May 02, 2011

  • May 2, 2011

Merger activity shot up last week with eight new deals announced and two closing.

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

Deal Statistics:

Total Number of Deals Closed in 201162
Total Number of Deals Not Completed in 20111
Total Number of Pending Deals
Cash Deals46
Stock Deals24
Stock & Cash Deals15
Special Conditions1
Total Number of Pending Deals86


New Deals:

  1. The acquisition of Lawson Software (LWSN) by an affiliate of Golden Gate Capital and Infor for $2 billion or $11.25 per share in cash.
  2. The acquisition of SMART Modular Technologies (SMOD) by Silver Lake Partners and Silver Lake Sumeru for $645 million or $9.25 per share in cash.
  3. The acquisition of SAVVIS Inc. (SVVS) by CenturyLink Inc. (CTL) in a cash plus stock deal for $2.5 billion, where SAVVIS shareholders will receive in exchange for each Savvis share $30 in cash and $10 in CenturyLink shares. The number of CenturyLink shares issued will be based upon the volume-weighted average price of CenturyLink stock during the thirty trading day period ending three trading days prior to the closing, provided that if this average price is less than or equal to $34.42, each Savvis share will receive $30 in cash and 0.2905 of a CenturyLink share.
  4. The acquisition of Bank of Granite Corporation (GRAN) by FNB United (FNBN) in an all-stock deal, where Bank of Granite shareholders will receive 3.375 shares of FNB’s common stock in exchange for each share of Bank of Granite common stock they own. The huge spread on the deal can partially be attributed to the post merger dilution on account of a private placement with The Carlyle Group and Oak Hill Capital Partners as discussed below.
  5. The acquisition of LoopNet (LOOP) by CoStar Group (CSGP) for $860 million in a cash plus stock deal, where LoopNet shareholders will receive $16.50 in cash and 0.03702 shares of CoStar Group common stock per share held.
  6. The acquisition of Vital Images (VTAL) by Toshiba Medical Systems Corporation for $273 million or $18.75 per share in cash.
  7. The acquisition of Constellation Energy Group (CEG) by Exelon Group (EXC) for $7.9 billion in an all-stock deal, where Constellation’s shareholders will receive 0.930 shares of Excelon common stock in exchange for each share of Constellation common stock.
  8. The acquisition of State Bancorp Inc. (STBC) by Valley National Bancorp (VLY) in an all-stock deal for $222 million, where State Bancorp shareholders will receive 1 share of Valley National Bancorp common stock per State Bancorp share held. I had picked up shares of New York based State Bancorp last year following insider purchases but unfortunately sold my shares early a few months ago.


Updated Deals:

  1. Duncan Energy Partners (DEP) and Enterprise Products Partners (EPD) announce Merger Agreement. The initial proposal was announced on February 23rd and finalized last week.


Closed Deals:

  1. The acquisition of Novell (NOVL) by Attachmate Corporation on April 27, 2011.
  2. The acquisition of RC2 Corporation (RCRC) by TOMY Company on April 28, 2011.


Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring

Company

Closing

Price

Last
Price
Closing
Date
ProfitAnnu.
Profit
GRAN04/27/2011FNB United Corp (FNBN)$1.49$0.9809/30/2011

51.53%

124.56%
CSR04/20/2011Rightmark Holdings Limited (N/A)$6.50$5.3809/30/2011 20.82% 50.32%
TAM01/19/2011LAN Airlines S.A. (LFL)$25.20$20.8812/31/2011

20.69%

31.08%
TLCR06/07/2010Grifols (GRF.MC)$31.87$27.9206/30/2011 14.14% 87.49%
STBC04/28/2011Valley National Bancorp (VLY)$14.32$13.2010/31/2011 8.48% 17.02%
CEG04/28/2011Exelon Corporation (EXC)$39.22$36.4201/31/2012 7.68% 10.23%
GLBC04/11/2011Level 3 Communications (LVLT)$24.88$23.3812/31/2010 6.42% 0.00%
SVVS04/27/2011CenturyLink (CTL)$41.85$39.3612/31/2011 6.32% 9.49%
HYC11/17/2010Verifone Systems (PAY)$12.61$11.9709/30/2011 5.34% 12.90%
CLFC12/09/2010Nara Bancorp Inc. (NARA)$7.68$7.2909/30/2011 5.33% 12.89%

List of all pending deals:

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