Merger Arbitrage Mondays – April 30, 2012

  • April 29, 2012

Merger activity dropped last week with two new deals announced and five closing. We did some interesting spreads last week when Motorola Mobility (MMI) dropped intra-day to $37.08 after Google (GOOG) announced plans to sell a Galaxy Nexus Android phone by Samsung. The spread on this $40 all-cash deal jumped from over 3% to over 6% and I used the drop to start a position in my personal portfolio as mentioned on my Twitter feed. The spread has once again narrowed to 3.33% but still represents potential annualized gains of 19.62% provided the deal closes by the end of Q2 2012.

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 2012 52
Total Number of Pending Deals
Cash Deals 36
Stock Deals 9
Stock & Cash Deals 7
Total Number of Pending Deals 52
Total Deal Size $367.42 billion

New Deals:

  1. The acquisition of Ardea Biosciences (RDEA) by AstraZeneca (AZN) for $1.26 billion or $32.00 per share in cash.
  2. The acquisition of GeoResources (GEOI) by Halcon Resources (HK) for $1 billion in a cash plus stock deal. Under the terms of the merger agreement, GeoResources stockholders will receive $20.00 in cash and 1.932 shares of Halcón Resources common stock for each share of GeoResources common stock that they hold. Interestingly the spread on this deal is still 9.54% or 22.61% annualized without taking the borrowing cost for Halcon Resources into account.

Closed Deals:

  1. The acquisition of Advance America, Cash Advance (AEA) by Grupo Elektra on April 23, 2012.
  2. The acquisition of China Real Estate Information Corporation (CRIC) by E-House (China) Holdings (EJ) on April 23, 2012.
  3. The acquisition of The Connecticut Bank and Trust (CTBC) by Berkshire Hills Bancorp, Inc. (BHLB) on April 26, 2012.
  4. The acquisition of Zoll Medical Corporation (ZOLL) by Asahi Kasei Corp on April 26, 2012.
  5. The acquisition of Transcend Services (TRCR) by Nuance Communications (NUAN) on April 27, 2012.

Top 10 deals with largest spreads:

Symbol Announced

Date

Acquiring

Company

Closing

Price

Last

Price

Closing

Date

Profit Annualized

Profit

CADC 10/24/2011 Novel Gain Holdings Limited (N/A) $2.65 $2.07 06/30/2012 28.02% 167.66%
VQ 01/16/2012 Denver Parent Corporation (N/A) $12.50 $11.09 06/30/2012 12.71% 76.08%
GEOI 04/25/2012 Halcon Resources (HK) $40.60 $37.06 09/30/2012 9.54% 22.76%
TUDO 03/12/2012 Youku Inc. (YOKU) $36.78 $34.52 09/30/2012 6.55% 15.62%
INCB 01/25/2012 Old National Bancorp Capital (ONB) $24.83 $23.43 06/30/2012 5.99% 35.83%
CMFB 12/20/2011 Sandy Spring Bancorp Inc. (SASR) $14.80 $14.00 06/30/2012 5.71% 34.15%
PGN 01/10/2011 Duke Energy Corporation (DUK) $55.99 $53.15 07/01/2012 5.34% 31.41%
VIST 01/26/2012 Tompkins Financial Corporation (TMP) $12.23 $11.72 09/30/2012 4.35% 10.37%
EP 10/16/2011 Kinder Morgan, Inc. (KMI) $30.62 $29.52 06/30/2012 3.71% 22.22%
TAM 01/19/2011 LAN Airlines S.A. (LFL) $25.52 $24.65 06/30/2012 3.55% 21.22%

List of all pending deals:

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