Merger Arbitrage Mondays – November 26, 2012

  • November 25, 2012

Merger activity decreased last week with two new deals announced and two deals 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 2012161
Total Number of Deals Not Completed in 20124
Total Number of Pending Deals
Cash Deals42
Stock Deals16
Stock & Cash Deals11
Total Number of Pending Deals69
Total Deal Size$513.96 billion

New Deals:

  1. The acquisition of Outdoor Channel Holdings (OUTD) by InterMedia Outdoors Holdings, LLC for $8.00 per share in a cash or stock deal. Shareholders can elect to either received $8 per share or they can receive one share in the new merged entity called IMOH that will be listed on the Nasdaq. Since IMOH is not yet listed, we are treating this as an all cash deal. According to the press release, the Company’s board has also approved a 25 cent per share special dividend which will be paid on or about December 7, 2012 to stockholders of record as of the close of business on November 27, 2012.
  2. The acquisition of BioMimetic Therapeutics (BMTI) by Wright Medical Group (WMGI) for approximately $380 million, or $12.97 per share. This is a complex deal with a cash component, a stock component and milestone-based contingent value rights (CVR). According to the press release, “Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment® Bone Graft and upon achieving certain revenue milestones. Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:

    i) $3.50 per share upon FDA approval of Augment® Bone Graft;
    ii) $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
    iii) $1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.”

    Based on the closing price of $21.24 for Wright Medical Group (WMGI), the deal is valued at $6.77 without taking the CVR into account. Essentially the market is placing a value of just 26 cents for the CVR that could be worth as much as $6.50 provided all milestones are met.

    We have not yet included this deal in our database. If you have any thoughts on how to value this deal (assign probabilities to each milestone and discount back to current value?), I would love to hear from you.

Updated Deals:

  • On November 20, 2012, BGI-Shenzhen announced that it, through its wholly-owned subsidiary Beta Acquisition Corporation, has extended its all cash tender offer to purchase all outstanding shares of common stock of Complete Genomics, Inc. (GNOM) to 12:00 midnight on Friday, December 14, 2012. The Offer was previously scheduled to expire at 12:00 midnight on Wednesday, November 21, 2012.

Closed Deals:

  1. The acquisition of Dollar Thrifty Automotive Group (DTG) by Dollar Thrifty Automotive Group (HTZ) on November 20, 2012.
  2. The acquisition of Ramtron International (RMTR) by Cypress Semiconductor (CY) on November 21, 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)$6.67$4.1311/30/201261.40%5602.60%
ECBE09/25/2012Crescent Financial Bancshares, Inc. (CRFN)$17.75$14.5203/31/201322.25%64.96%
ABVA05/03/2012Washington First Bankshares (WFBI)$5.23$4.5012/31/201216.30%169.94%
WSB09/10/2012Old Line Bancshares, Inc. (OLBK)$6.65$5.7706/30/201315.17%25.64%
CFFC08/02/2012City Holding Company (CHCO)$5.89$5.3603/31/20139.82%28.69%
OUTD11/16/2012InterMedia Outdoors Holdings, LLC (N/A)$8.00$7.3203/31/20139.29%27.13%
NXY07/23/2012CNOOC Ltd. (CEO)$27.50$25.2012/31/20129.13%95.18%
GEOY07/23/2012DigitalGlobe, Inc. (DGI)$32.05$30.1003/31/20136.47%18.89%
JEF11/12/2012Leucadia National Corp. (LUK)$17.09$16.1503/31/20135.83%17.01%
ANNB10/23/2012F.N.B. Corporation (FNB)$12.61$11.9604/30/20135.41%12.74%

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$6.67$4.1332,98711/30/201261.40%5602.60%
+ECBE09/25/2012Crescent Financial Bancshares, Inc. (CRFN)All Stock$51.6 million$17.75$14.525,28003/31/201322.25%64.96%
+ABVA05/03/2012Washington First Bankshares (WFBI)All Stock$24.4 million$5.23$4.5018,34312/31/201216.30%169.94%
+WSB09/10/2012Old Line Bancshares, Inc. (OLBK)All Stock$49 million$6.65$5.77N/A06/30/201315.17%25.64%
+CFFC08/02/2012City Holding Company (CHCO)All Stock$26.1 million$5.89$5.36N/A03/31/20139.82%28.69%
+OUTD11/16/2012InterMedia Outdoors Holdings, LLC (N/A)All CashN/A$8.00$7.3243,79003/31/20139.29%27.13%
+NXY07/23/2012CNOOC Ltd. (CEO)All Cash$15.1 billion$27.50$25.202,110,61812/31/20129.13%95.18%
+GEOY07/23/2012DigitalGlobe, Inc. (DGI)Cash Plus Stock$900 million$32.05$30.1090,95103/31/20136.47%18.89%
+JEF11/12/2012Leucadia National Corp. (LUK)All Stock$3.59 billion$17.09$16.15894,20003/31/20135.83%17.01%
+ANNB10/23/2012F.N.B. Corporation (FNB)All Stock$51 million$12.61$11.961,30004/30/20135.41%12.74%
+VRTA05/31/2012Vestin Realty Mortgage II, Inc. (VRTB)All StockN/A$1.19$1.1311,36712/31/20125.22%54.45%
+PRWT10/30/2012AmericanWest Bank (N/A)All Cash$16.6 million$1.65$1.573,93706/30/20135.10%8.61%
+BXG11/14/2011BFC Financial Corporation (BFCF)All StockN/A$9.12$8.6843,48112/31/20125.07%52.86%
+CYBI10/17/2012UM Holdings, Ltd. (N/A)All CashN/A$2.55$2.4320,10003/31/20134.94%14.42%
+TEA11/14/2012Starbucks Corporation (SBUX)All Cash$620 million$15.50$14.85344,38012/31/20124.38%45.65%
+BTFG05/29/2012Trustmark Corporation (TRMK)All Stock$55.4 million$2.80$2.706,20212/31/20123.75%39.11%
+DITC09/18/2012Nuance Communications, Inc. (NUAN)All Cash$22.5 million$1.45$1.409,46012/31/20123.57%37.24%
+FSBI07/19/2012WesBanco Inc. (WSBC)Cash Plus Stock$70.8 million$22.07$21.38N/A03/31/20133.22%9.39%
+CYMI10/17/2012ASML Holding NV (ASML)Cash Plus Stock$2.5 billion$86.17$83.63421,12606/30/20133.04%5.13%
+CRBC09/13/2012FirstMerit Corporation (FMER)All Stock$912 million$19.17$18.66124,82106/30/20132.71%4.58%
+SHAW07/30/2012Chicago Bridge & Iron Company (CBI)Cash Plus Stock$3 billion$46.10$44.89354,77303/31/20132.69%7.86%
+HCBK08/27/2012M&T Bank Corporation (MTB)All Stock$3.7 billion$8.38$8.16597,89403/31/20132.64%7.70%
+RVR11/15/2012Parthenon Capital Partners (N/A)All Cash$79.5 million$21.93$21.37N/A03/31/20132.62%7.65%
+SEH10/24/2012PolyOne Corporation (POL)Cash Plus Stock$393 million$8.81$8.62453,11303/31/20132.25%6.57%
+FCAL11/06/2012PacWest Bancorp (PACW)All Cash$231 million$8.00$7.8327,97003/31/20132.17%6.34%
+ALNC10/08/2012NBT Bancorp Inc. (NBTB)All Stock$233.4 million$42.75$41.8734,58106/30/20132.11%3.56%
+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$9.3158,96712/31/20122.04%21.28%
+PSSI10/25/2012McKesson Corporation (MCK)All Cash$2.1 billion$29.00$28.46298,38803/31/20131.90%5.54%
+LMLP09/24/2012Digital River, Inc. (DRIV)All Cash$102.8 million$3.45$3.3978,78703/31/20131.77%5.17%
+KBW11/05/2012Stifel Financial Corp. (SF)All Cash$575 million$17.50$17.20144,55712/31/20691.74%0.03%
+MRX09/03/2012Valeant Pharmaceuticals International, Inc. (VRX)All Cash$2.6 billion$44.00$43.29488,18306/30/20131.64%2.77%
+CVH08/20/2012Aetna Inc. (AET)Cash Plus Stock$7.3 billion$44.00$43.40434,17006/30/20131.39%2.34%
+WWIN07/24/2012Winner Holding Limited (N/A)All CashN/A$4.50$4.443,83803/31/20131.35%3.95%
+ACOM10/22/2012Permira Advisers LLP (N/A)All Cash$1.6 billion$32.00$31.59140,11703/31/20131.30%3.79%
+KYAK11/08/2012priceline.com Incorporated (PCLN)All Cash$1.65 billion$40.00$39.5335,83303/31/20131.19%3.47%
+WRC10/31/2012PVH Corp. (PVH)Cash Plus Stock$2.9 billion$71.97$71.16255,35603/31/20131.14%3.32%
+GEN07/23/2012NRG Energy, Inc. (NRG)All Stock$1.7 billion$2.43$2.401,621,26103/31/20131.08%3.15%
+SRZ08/22/2012Health Care REIT, Inc. (HCN)All Cash$845 million$14.50$14.35379,45506/30/20131.05%1.77%
+YTEC08/13/2012New Sihitech Limited (N/A)All Cash$79.5 million$3.90$3.8632,16412/31/20121.04%10.81%
+SUNH06/20/2012Genesis HealthCare (N/A)All Cash$275 million$8.50$8.4422,47912/31/20120.71%7.41%
+JDAS11/01/2012RedPrairie (N/A)All Cash$1.9 billion$45.00$44.71249,88612/31/20120.65%6.76%
+RBN08/09/2012National Oilwell Varco, Inc. (NOV)All Cash$2.5 billion$60.00$59.6560,41912/31/20120.59%6.12%
+NOOF10/15/2012LFP Broadcasting, LLC (N/A)All Cash$33 million$2.02$2.0111,70912/31/20120.50%5.19%
+FSR08/30/2012Validus Holdings, Ltd. (VR)Cash Plus Stock$600 million$8.70$8.6665,38912/31/20120.47%4.93%
+ZZ09/27/2012Tempur-Pedic International Inc. (TPX)All Cash$1.3 billion$2.20$2.19215,63006/30/20130.46%0.77%
+AGP07/09/2012WellPoint Inc. (WLP)All Cash$4.9 billion$92.00$91.59117,79003/31/20130.45%1.31%
+MDF11/05/2012Humana Inc. (HUM)All Cash$850 million$11.25$11.20397,96603/31/20130.45%1.30%
+CBE05/21/2012Eaton Corporation (ETN)Cash Plus Stock$11.46 billion$79.11$78.77738,26212/31/20120.44%4.55%
+SAVB08/08/2012SCBT Financial Corporation (SCBT)All Stock$67.1 million$9.46$9.4254912/31/20120.39%4.02%
+CRDN10/01/20123M Co. (MMM)All Cash$670 million$35.00$34.87661,80012/31/20120.37%3.89%
+WMCO11/01/2012Curtiss-Wright Corp. (CW)All Cash$119 million$15.42$15.3759,20003/31/20130.33%0.95%
+GNOM09/17/2012BGI-Shenzhen (N/A)All Cash$117.6 million$3.15$3.14219,08712/14/20120.32%6.46%
+SBX08/28/2012Enstar Group Limited (ESGR)All Cash$249 million$11.11$11.0924,88403/31/20130.18%0.53%
+PLFE07/13/2012Athene Annuity (N/A)All Cash$415 million$14.00$13.9818,57312/31/20120.14%1.49%
+CHG02/21/2012Fortis Inc. (N/A)All Cash$1.5 billion$65.00$64.9124,14903/31/20130.14%0.40%
+PCBC03/12/2012UnionBanCal Corp. (N/A)All Cash$1.51 billion$46.00$45.957,35712/31/20120.11%1.13%
+CASC10/22/2012Toyota Industries Corporation (N/A)All Cash$759 million$65.00$64.9642,82212/31/20120.06%0.64%
+KNXA08/27/2012International Business Machines Corporation (IBM)All Cash$1.3 billion$46.00$45.9882,99012/31/20120.04%0.45%
+DUSA11/08/2012Sun Pharmaceutical Industries Limited (N/A)All Cash$230 million$8.00$8.00136,87912/31/20690.00%0.00%
+ARCT09/06/2012Realty Income Corp. (O)All Stock$2.95 billion$11.30$11.33655,76203/31/2013-0.23%-0.68%
+OPNT10/29/2012Riverbed Technology, Inc. (RVBD)Cash Plus Stock$921 million$41.47$41.6045,80512/31/2012-0.32%-3.30%
+TIE11/09/2012Precision Castparts Corp. (PCP)All Cash$2.9 billion$16.50$16.59662,95212/31/2012-0.54%-5.66%
+WCBO09/26/2012Columbia Banking System, Inc. (COLB)All Stock$506 million$21.39$21.8444,72703/31/2013-2.07%-6.04%
+TPCG08/27/2012First Reserve Corporation and SK Capital Partners (N/A)All Cash$850 million$45.00$47.9722,51712/31/2012-6.19%-64.57%
+VSNT10/01/2012UNICOM Systems, Inc. (N/A)All Cash$32 million$11.50$12.7949,18801/31/2013-10.09%-55.78%
+FACE08/13/2012Swander Pace Capital (N/A)All Cash$65 million$4.25$4.8359,99912/31/2012-12.01%-125.23%
+TARO08/13/2012Sun Pharmaceutical (N/A)All Cash$1.45 billion$39.50$46.5070012/31/2012-15.05%-156.99%
+WAVE08/02/2012AT&T, Inc. (T)All Cash$600 million$1.00$1.2011,00012/31/2069-16.67%-0.29%
+SHF10/30/2012Bayer HealthCare LLC (N/A)All Cash$1.2 billion$34.00$41.90101,98812/31/2012-18.85%-196.62%