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Merger Arbitrage Mondays – August 1, 2011

  • 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 2011131
Total Number of Deals Not Completed in 20111
Total Number of Pending Deals
Cash Deals36
Stock Deals24
Stock & Cash Deals11
Total Number of Pending Deals71

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:

GRAN04/27/2011FNB United Corp (FNBN)$1.49$0.83509/30/2011 77.84% 473.55%
HRBN06/20/2011Tech Full Electric Company Limited (N/A)$24.00$16.4312/31/2011 46.07% 110.64%
FNDT06/27/2011S1 Corporation (SONE)$25.57$18.9012/31/2011 35.28% 84.72%
TAM01/19/2011LAN Airlines S.A. (LFL)$23.56$19.4712/31/2011 21.02% 50.47%
MHS07/21/2011Express Scripts, Inc. (ESRX)$72.75$62.8806/30/2012 15.70% 17.15%
ABVA07/27/2011Eagle Bancorp, Inc. (EGBN)$5.82$5.1012/31/2011 14.19% 34.07%
CFSG05/20/2011Bain Capital Partners (N/A)$9.00$7.8911/15/2011 14.07% 48.44%
HYC11/17/2010Verifone Systems (PAY)$9.06$8.1109/30/2011 11.65% 70.89%
CSR04/20/2011Rightmark Holdings Limited (N/A)$6.50$5.8309/30/2011 11.49% 69.91%
CRU05/05/2011Capital Product Partners L.P. (CPLP)$12.59$11.5209/30/2011 9.28% 56.46%

List of all pending deals:

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