Merger Arbitrage Mondays – November 12, 2012

  • November 12, 2012

Merger activity decreased last week with five new deals announced and five 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 2012158
Total Number of Deals Not Completed in 20122
Total Number of Pending Deals
Cash Deals40
Stock Deals16
Stock & Cash Deals11
Total Number of Pending Deals67
Total Deal Size$506.77 billion

New Deals:

  1. The acquisition of Metropolitan Health Networks (MDF) by Humana (HUM) for $850 million or $11.25 per share in cash.
  2. The acquisition of KBW Inc. (KBW) by Stifel Financial Corp. (SF). Under the terms of the agreement, KBW shareholders will receive $17.50 per share, comprised of $10.00 per share in cash and $7.50 per share in Stifel common stock. The stock component of the consideration is fixed at $7.50 per share, subject to a collar, provided that the volume weighted average closing price of Stifel common stock for the ten days prior to closing is between $29.00 and $35.00 per share. If the volume weighted average price rises above $35.00 per share, the exchange ratio will be fixed at 0.2143 shares of Stifel common stock for each share of KBW, and if it falls below $29.00 per share, the exchange ratio will be fixed at 0.2586 shares of Stifel common stock for each share of KBW. Because the stock component is fixed at $7.50, subject to a collar, we are going to treat this as an all cash deal for now.
  3. The acquisition of First California Financial Group (FCAL) by PacWest Bancorp (PACW) for $231 million or $8.00 per share in an all stock deal. The number of shares of PacWest common stock deliverable for each share of First California common stock will be determined based on an average price of PacWest common stock over a measuring period prior to the receipt of regulatory approval, and will fluctuate if such average price is between $20.00 and $27.00 and will be fixed if such average price is below $20.00 or above $27.00. Based on PacWest’s closing stock price of $22.27 on Monday, November 5, 2012, First California stockholders would have received 0.3592 of a share of PacWest common stock for each share of First California common stock. On account of this variable ratio subject to a collar, we are going to treat this as an all cash deal for now.
  4. The acquisition of DUSA Pharmaceuticals (DUSA) by Sun Pharmaceutical Industries Limited for $230 million or $8.00 per share in cash.
  5. The acquisition of Kayak Software Corporation (KYAK) by priceline.com Incorporated (PCLN) for $1.65 billion or $40.00 per share in a cash or stock deal. KAYAK shareholders will have the right to elect to receive cash or stock with a value of $40 per KAYAK share, (subject to (i) the collar mechanism described below and (ii) pro ration such that the overall consideration in the deal to KAYAK shareholders will consist of one-third cash and two-thirds stock).  The stock portion of the consideration will be subject to a 10% collar pursuant to which the value of thePriceline.com stock delivered to those receiving stock will be $40 per KAYAK share so long as the aggregate volume-weighted averagePriceline.com trading price for the 30-day period ending 2 days prior to Closing (as set forth more fully in the Merger Agreement) is between$571.31 and $698.27 per Priceline.com share.  If such average price is above $698.27 or below $571.31, those receiving Priceline.com stock will receive a fixed exchange ratio as set forth in the Merger Agreement. On account of the variable ratio for those electing to receive stock and the collar, we are treating this as an all cash deal for now.

Updated Deals:

  1. On November 8, 2012, TPC Group (TPCG) agreed to a higher buyout price of $45.00 per share by entities managed by private equity firms First Reserve and SK Capital.
  2. On November 9, 2012, due to failure to regain compliance with the $1 minimum bid price for its common stock for continued listing, the NASDAQ Hearings Panel has determined to delist BIDZ.com’s (BIDZ) shares, effective at the open of business on Tuesday, November 13, 2012. We have removed the deal from our list of active mergers and are treating it as a failed deal because the Glendon Group appears to have walked away from the deal.

Closed Deals:

  1. The acquisition of Presstek (PRST) by MAI Holdings, Inc., an entity affiliated with AIP Capital Fund IV, L.P. on November 5, 2012.
  2. The acquisition of Union Drilling (UDRL) by Sidewinder Drilling on November 5, 2012.
  3. The acquisition of Pansoft Company Limited (PSOF) by Timesway Group Limited on November 9, 2012.
  4. The acquisition of Mediware Information Systems (MEDW) by Thoma Bravo, LLC on November 9, 2012.
  5. The acquisition of Central Bancorp (CEBK) by Independent Bank (INDB) on November 9, 2012.

Top 10 deals with largest spreads:

SymbolAnnounced

Date

Acquiring

Company

Closing

Price

Last

Price

Closing

Date

ProfitAnnualized

Profit

PLXT04/30/2012Integrated Device Technology, Inc. (IDTI)$6.57$4.1611/30/201257.96%1175.36%
NXY07/23/2012CNOOC Ltd. (CEO)$27.50$23.9612/31/201214.77%110.06%
BXG11/14/2011BFC Financial Corporation (BFCF)$6.36$5.8512/31/20128.72%64.94%
GEOY07/23/2012DigitalGlobe, Inc. (DGI)$32.71$30.2603/31/20138.09%21.23%
WSB09/10/2012Old Line Bancshares, Inc. (OLBK)$6.22$5.7606/30/20138.07%12.81%
VRTA05/31/2012Vestin Realty Mortgage II, Inc. (VRTB)$1.23$1.1512/31/20126.96%51.82%
GNOM09/17/2012BGI-Shenzhen (N/A)$3.15$2.9603/31/20136.42%16.86%
SHAW07/30/2012Chicago Bridge & Iron Company (CBI)$45.80$43.5303/31/20135.22%13.71%
FCAL11/06/2012PacWest Bancorp (PACW)$8.00$7.6103/31/20135.12%13.46%
BTFG05/29/2012Trustmark Corporation (TRMK)$2.77$2.6412/31/20125.02%37.39%

List of all pending deals:

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


SymbolAnnounced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

VolumeClosing

Date

ProfitAnnu.

Profit

+PLXT04/30/2012Integrated Device Technology, Inc. (IDTI)Cash Plus Stock$330 million$6.57$4.16286,08511/30/201257.96%1175.36%
+NXY07/23/2012CNOOC Ltd. (CEO)All Cash$15.1 billion$27.50$23.9611,346,45412/31/201214.77%110.06%
+BXG11/14/2011BFC Financial Corporation (BFCF)All StockN/A$6.36$5.8512,66912/31/20128.72%64.94%
+GEOY07/23/2012DigitalGlobe, Inc. (DGI)Cash Plus Stock$900 million$32.71$30.26199,61903/31/20138.09%21.23%
+WSB09/10/2012Old Line Bancshares, Inc. (OLBK)All Stock$49 million$6.22$5.7611,70006/30/20138.07%12.81%
+VRTA05/31/2012Vestin Realty Mortgage II, Inc. (VRTB)All StockN/A$1.23$1.151,90012/31/20126.96%51.82%
+GNOM09/17/2012BGI-Shenzhen (N/A)All Cash$117.6 million$3.15$2.96254,31503/31/20136.42%16.86%
+SHAW07/30/2012Chicago Bridge & Iron Company (CBI)Cash Plus Stock$3 billion$45.80$43.53437,36503/31/20135.22%13.71%
+FCAL11/06/2012PacWest Bancorp (PACW)All Cash$231 million$8.00$7.61354,23803/31/20135.12%13.46%
+BTFG05/29/2012Trustmark Corporation (TRMK)All Stock$55.4 million$2.77$2.6417,17012/31/20125.02%37.39%
+CFFC08/02/2012City Holding Company (CHCO)All Stock$26.1 million$5.80$5.539,76103/31/20134.96%13.02%
+MRX09/03/2012Valeant Pharmaceuticals International, Inc. (VRX)All Cash$2.6 billion$44.00$42.0317,056,00806/30/20134.69%7.44%
+CRBC09/13/2012FirstMerit Corporation (FMER)All Stock$912 million$18.52$17.70388,44406/30/20134.65%7.37%
+CYBI10/17/2012UM Holdings, Ltd. (N/A)All CashN/A$2.55$2.4488,39903/31/20134.51%11.84%
+ABVA05/03/2012Washington First Bankshares (WFBI)All Stock$24.4 million$4.55$4.356,69012/31/20124.50%33.54%
+PRWT10/30/2012AmericanWest Bank (N/A)All Cash$16.6 million$1.65$1.5811,21206/30/20134.43%7.03%
+DITC09/18/2012Nuance Communications, Inc. (NUAN)All Cash$22.5 million$1.45$1.39115,76612/31/20124.32%32.15%
+CYMI10/17/2012ASML Holding NV (ASML)Cash Plus Stock$2.5 billion$83.70$80.31659,80006/30/20134.22%6.69%
+DTG08/27/2012Hertz Global Holdings, Inc. (HTZ)All Cash$2.3 billion$87.50$84.006,257,31703/31/20134.17%10.94%
+HCBK08/27/2012M&T Bank Corporation (MTB)All Stock$3.7 billion$8.33$8.0310,684,19803/31/20133.69%9.70%
+ANNB10/23/2012F.N.B. Corporation (FNB)All Stock$51 million$12.17$11.792,40304/30/20133.25%7.02%
+FSIN06/28/2012Chairman and Co-Chief Executive Officer, Mr. Li Fu, and Abax Global Capital (Hong Kong) Limited (N/A)All CashN/A$9.50$9.26213,59412/31/20122.59%19.31%
+ALNC10/08/2012NBT Bancorp Inc. (NBTB)All Stock$233.4 million$43.34$42.3834,72806/30/20132.27%3.60%
+ECBE09/25/2012Crescent Financial Bancshares, Inc. (CRFN)All Stock$51.6 million$14.91$14.604,20003/31/20132.12%5.58%
+SEH10/24/2012PolyOne Corporation (POL)Cash Plus Stock$393 million$8.90$8.72406,74903/31/20132.06%5.41%
+PSSI10/25/2012McKesson Corporation (MCK)All Cash$2.1 billion$29.00$28.441,189,42303/31/20131.97%5.17%
+ACOM10/22/2012Permira Advisers LLP (N/A)All Cash$1.6 billion$32.00$31.40985,37803/31/20131.91%5.02%
+GEN07/23/2012NRG Energy, Inc. (NRG)All Stock$1.7 billion$2.50$2.4524,419,65203/31/20131.90%4.98%
+YTEC08/13/2012New Sihitech Limited (N/A)All Cash$79.5 million$3.90$3.832,98012/31/20121.83%13.61%
+CVH08/20/2012Aetna Inc. (AET)Cash Plus Stock$7.3 billion$43.66$42.911,346,53306/30/20131.76%2.79%
+WRC10/31/2012PVH Corp. (PVH)Cash Plus Stock$2.9 billion$71.59$70.44996,61503/31/20131.63%4.28%
+WWIN07/24/2012Winner Holding Limited (N/A)All CashN/A$4.50$4.4327,87003/31/20131.58%4.15%
+KBW11/05/2012Stifel Financial Corp. (SF)All Cash$575 million$17.50$17.27780,76912/31/20691.33%0.02%
+FSBI07/19/2012WesBanco Inc. (WSBC)Cash Plus Stock$70.8 million$21.86$21.601,90003/31/20131.21%3.17%
+SAVB08/08/2012SCBT Financial Corporation (SCBT)All Stock$67.1 million$9.35$9.2521812/31/20121.04%7.75%
+CBE05/21/2012Eaton Corporation (ETN)Cash Plus Stock$11.46 billion$77.15$76.371,548,42212/31/20121.03%7.64%
+SBX08/28/2012Enstar Group Limited (ESGR)All Cash$249 million$11.11$11.0099,05903/31/20131.00%2.63%
+RBN08/09/2012National Oilwell Varco, Inc. (NOV)All Cash$2.5 billion$60.00$59.42251,00712/31/20120.98%7.27%
+LMLP09/24/2012Digital River, Inc. (DRIV)All Cash$102.8 million$3.45$3.42147,62403/31/20130.88%2.30%
+NEBS05/31/2012United Financial Bancorp, Inc. (UBNK)All Stock$91.0 million$13.66$13.551,16512/31/20120.84%6.24%
+KYAK11/08/2012priceline.com Incorporated (PCLN)All Cash$1.65 billion$40.00$39.672,626,31203/31/20130.83%2.18%
+MDF11/05/2012Humana Inc. (HUM)All Cash$850 million$11.25$11.161,163,02603/31/20130.81%2.12%
+SUNH06/20/2012Genesis HealthCare (N/A)All Cash$275 million$8.50$8.44115,37212/31/20120.71%5.30%
+FSR08/30/2012Validus Holdings, Ltd. (VR)Cash Plus Stock$600 million$8.60$8.54192,13512/31/20120.71%5.26%
+AGP07/09/2012WellPoint Inc. (WLP)All Cash$4.9 billion$92.00$91.36206,62203/31/20130.70%1.84%
+SRZ08/22/2012Health Care REIT, Inc. (HCN)All Cash$845 million$14.50$14.40310,89906/30/20130.69%1.10%
+JDAS11/01/2012RedPrairie (N/A)All Cash$1.9 billion$45.00$44.721,548,09012/31/20120.63%4.66%
+DUSA11/08/2012Sun Pharmaceutical Industries Limited (N/A)All Cash$230 million$8.00$7.96844,01112/31/20690.50%0.01%
+NOOF10/15/2012LFP Broadcasting, LLC (N/A)All Cash$33 million$2.02$2.0156,13512/31/20120.50%3.71%
+ARCT09/06/2012Realty Income Corp. (O)All Stock$2.95 billion$11.04$10.991,700,80003/31/20130.42%1.10%
+PLFE07/13/2012Athene Annuity (N/A)All Cash$415 million$14.00$13.9558,79312/31/20120.36%2.67%
+WMCO11/01/2012Curtiss-Wright Corp. (CW)All Cash$119 million$15.42$15.371,53003/31/20130.33%0.85%
+RMTR09/19/2012Cypress Semiconductor Corporation (CY)All Cash$109.8 million$3.10$3.0924,04512/31/20120.32%2.41%
+PCBC03/12/2012UnionBanCal Corp. (N/A)All Cash$1.51 billion$46.00$45.8835,00512/31/20120.26%1.95%
+KNXA08/27/2012International Business Machines Corporation (IBM)All Cash$1.3 billion$46.00$45.90737,06212/31/20120.22%1.62%
+CHG02/21/2012Fortis Inc. (N/A)All Cash$1.5 billion$65.00$64.9035,94303/31/20130.15%0.40%
+SHF10/30/2012Bayer HealthCare LLC (N/A)All Cash$1.2 billion$34.00$33.95243,25612/31/20120.15%1.10%
+CRDN10/01/20123M Co. (MMM)All Cash$670 million$35.00$34.97235,83812/31/20120.09%0.64%
+ZZ09/27/2012Tempur-Pedic International Inc. (TPX)All Cash$1.3 billion$2.20$2.20319,71306/30/20130.00%0.00%
+CASC10/22/2012Toyota Industries Corporation (N/A)All Cash$759 million$65.00$65.2444,55812/31/2012-0.37%-2.74%
+OPNT10/29/2012Riverbed Technology, Inc. (RVBD)Cash Plus Stock$921 million$41.41$41.69250,64512/31/2012-0.67%-5.00%
+VSNT10/01/2012UNICOM Systems, Inc. (N/A)All Cash$32 million$11.50$11.7517,73001/31/2013-2.13%-9.71%
+TPCG08/27/2012First Reserve Corporation and SK Capital Partners (N/A)All Cash$850 million$45.00$46.42356,60512/31/2012-3.06%-22.79%
+WCBO09/26/2012Columbia Banking System, Inc. (COLB)All Stock$506 million$20.94$21.6427,64903/31/2013-3.26%-8.55%
+FACE08/13/2012Swander Pace Capital (N/A)All Cash$65 million$4.25$4.47161,96412/31/2012-4.92%-36.66%
+TARO08/13/2012Sun Pharmaceutical (N/A)All Cash$1.45 billion$39.50$46.4118,65812/31/2012-14.89%-110.91%
+WAVE08/02/2012AT&T, Inc. (T)All Cash$600 million$1.00$1.191,33312/31/2069-15.97%-0.28%

Voluntary Disclosure: I hold a long position in CYBI.