Merger Arbitrage Mondays – August 1, 2011

Merger activity declined last week with three new deals announced and three closing.

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

Deal Statistics:

Total Number of Deals Closed in 2011	131
Total Number of Deals Not Completed in 2011	1
Total Number of Pending Deals
Cash Deals	36
Stock Deals	24
Stock & Cash Deals	11
Total Number of Pending Deals	71

New Deals:

1. The acquisition of OceanFreight (OCNFD) by DryShips (DRYS) in a cash plus stock deal worth $19.85/share or $239 million where OceanFreight’s shareholders will receive $11.25 in cash and 0.52326  of a share of common stock of Ocean Rig UDW Inc., a global provider of offshore ultra deepwater drilling services that is 78% owned by DryShips. Ocean Rig shares will be listed on the Nasdaq Global Select Market upon the closing of the merger.
2. The acquisition of Alliance Bankshares Corporation (ABVA) by Eagle Bancorp (EGBN) for $31.2 million in an all stock deal, where Alliance shareholders will receive 0.4317 shares (the “Conversion Ratio”) of Eagle common stock for each share of Alliance common stock subject to adjustment based upon certain factors set forth in the Agreement. I have analyzed some complex deals in the past but the lengthy list of factors that could affect the conversion ratio of this deal takes the cake. It is therefore not surprising that the spread on the deal is so large. You can find additional information about the adjustment to the “conversion ratio” in this 8-K form filed with the SEC.
3. The acquisition of Allied Healthcare International (AHCI) by Saga Group Limited for $175 million or $3.90 per share in cash.

Closed Deals:

1. The acquisition of L-1 Identity Solutions (ID) by Safran on July 26, 2011
2. The acquisition of Integral Systems (ISYS) by Kratos Defense & Security Solutions (KTOS) on July 28, 2011
3. The acquisition of Sterling Bancshares (SBIB) by Comerica Incorporated (CMA) on July 28, 2011

Top 10 deals with largest spreads:

Symbol	Announced Date	Acquiring Company	Closing Price	Last Price	Closing Date	Profit	Annualized Profit
GRAN	04/27/2011	FNB United Corp (FNBN)	$1.49	$0.835	09/30/2011	77.84%	473.55%
HRBN	06/20/2011	Tech Full Electric Company Limited (N/A)	$24.00	$16.43	12/31/2011	46.07%	110.64%
FNDT	06/27/2011	S1 Corporation (SONE)	$25.57	$18.90	12/31/2011	35.28%	84.72%
TAM	01/19/2011	LAN Airlines S.A. (LFL)	$23.56	$19.47	12/31/2011	21.02%	50.47%
MHS	07/21/2011	Express Scripts, Inc. (ESRX)	$72.75	$62.88	06/30/2012	15.70%	17.15%
ABVA	07/27/2011	Eagle Bancorp, Inc. (EGBN)	$5.82	$5.10	12/31/2011	14.19%	34.07%
CFSG	05/20/2011	Bain Capital Partners (N/A)	$9.00	$7.89	11/15/2011	14.07%	48.44%
HYC	11/17/2010	Verifone Systems (PAY)	$9.06	$8.11	09/30/2011	11.65%	70.89%
CSR	04/20/2011	Rightmark Holdings Limited (N/A)	$6.50	$5.83	09/30/2011	11.49%	69.91%
CRU	05/05/2011	Capital Product Partners L.P. (CPLP)	$12.59	$11.52	09/30/2011	9.28%	56.46%

List of all pending deals:

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