Merger Arbitrage Mondays – July 21, 2014

  • July 21, 2014

Merger Activity increased last week with five new mergers announced and four 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 201492
Total Number of Deals Not Completed in 20142
Total Number of Pending Deals
Cash Deals29
Stock Deals18
Stock & Cash Deals13
Special Conditions6
Total Number of Pending Deals66
Total Deal Size$444.74 billion

New Deals:

  1. The acquisition of Rockwood Holdings (ROC) by Albemarle Corporation (ALB) for $6.2 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Rockwood Holdings will receive $50.65 in cash and 0.4803 of a share of Albemarle common stock.
  2. The acquisition of Lorillard (LO) by Reynolds American Inc. (RAI) for $27.4 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Lorillard will receive $50.50 in cash and 0.2909 of a share in RAI stock.
  3. The acquisition of Franklin Financial Corporation (FRNK) by Towne Bank (TOWN) for $275 million in an all stock deal. Under the terms of the agreement, shareholders of Franklin Financial Corporation will receive 1.40 shares of TowneBank common stock for each share of Franklin.
  4. The acquisition of zipRealty (ZIPR) by Realogy Holdings (RLGY) for $166 million or $6.75 per share in cash.
  5. The acquisition of International Game Technology (IGT) by GTECH S.p.A. (GTKYY) for $6.4 billion. Under the terms of the agreement, shareholders of International Game Technology will receive an aggregate value of $18.25 per IGT share in a combination of $13.69 in cash plus 0.1819 ordinary shares of NewCo for each share of IGT common stock, as described below according to the press release. GTECH shareholders will exchange each of their existing GTECH shares for one (1) newly issued NewCo share. Assuming a mixed consideration election, the stock consideration portion is subject to adjustment with a 15% up and down collar based on the trading price of GTECH shares prior to the closing of the transaction.  The exchange ratio of IGT common stock for NewCo stock will be determined by the average of the volume-weighted average price of GTECH stock (converted to USD) on ten randomly selected trading days occurring within the twenty trading-day period ending on (and including) the second full trading day prior to the closing of the transaction (the “GTECH Share Trading Price”).  If the GTECH Share Trading Price is between or equal to $25.08 and $28.84, the exchange ratio will vary between 0.1819x and 0.1582x.  Above $28.84, the exchange ratio will be fixed at 0.1582x.  Between or equal to $21.32 and $25.08, IGT shareholders will receive NewCo stock at a fixed ratio of 0.1819x plus additional cash consideration up to $0.68 per IGT share.  Below $21.32 IGT shareholders receive 0.1819 NewCo shares and additional cash consideration equal to the GTECH Share Trading Price multiplied by 0.0321. Given the limitations of our tool, we have entered this deal as a “special conditions” deal with a closing value of $18.25.

Closed Deals:

  1. The acquisition of Hastings Entertainment (HAST) by an affiliate of Joel Weinshanker on July 15, 2014. It took 120 days for this deal to be completed.
  2. The acquisition of PetroLogistics (PDH) by Flint Hills Resources on July 16, 2014. It took 49 days for this deal to be completed.
  3. The acquisition of AutoNavi Holdings Limited (AMAP) by affiliate of Alibaba Group Holding Limited (“Alibaba”) on July 17, 2014. It took 97 days for this deal to be completed.
  4. The acquisition of Cbeyond (CBEY) by Birch Communications on July 18, 2014. It took 88 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced

Date

Acquiring

Company

Closing

Price

Last

Price

Closing

Date

ProfitAnnualized

Profit

TWGP01/06/2014ACP Re Ltd. (N/A)$2.50$1.8311/15/201436.61%114.22%
FFKY04/22/2014Community Bank Shares of Indiana Inc. (CBIN)$4.05$3.6812/31/201410.18%22.79%
LO07/15/2014Reynolds American Inc. (RAI)$67.56$61.6806/30/20159.54%10.12%
DTV05/18/2014AT&T, Inc. (T)$95.00$86.9605/31/20159.25%10.75%
OABC04/29/2014Southside Bancshares Inc. (SBSI)$26.06$24.2312/31/20147.54%16.88%
MONT06/11/2014Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A)$22.60$21.0509/30/20147.36%37.85%
COV06/15/2014Medtronic, Inc. (MDT)$94.81$88.5301/31/20157.09%13.34%
OVRL05/15/2014Sphere 3D Corporation (ANY)$4.59$4.3009/30/20146.75%34.70%
IGT07/16/2014GTECH S.p.A. (GTKYY)$18.25$17.1506/30/20156.41%6.81%
HCBK08/27/2012M&T Bank Corporation (MTB)$10.26$9.7112/31/20145.63%12.61%

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

+TWGP01/06/2014ACP Re Ltd. (N/A)All Cash$172.1$2.50$1.83336,26011/15/201436.61%114.22%
+FFKY04/22/2014Community Bank Shares of Indiana Inc. (CBIN)All Stock$17.9 million$4.05$3.6813,70812/31/201410.18%22.79%
+LO07/15/2014Reynolds American Inc. (RAI)Cash Plus Stock$27.4 billion$67.56$61.686,863,31106/30/20159.54%10.12%
+DTV05/18/2014AT&T, Inc. (T)Special Conditions$48.5 billion$95.00$86.963,308,64705/31/20159.25%10.75%
+OABC04/29/2014Southside Bancshares Inc. (SBSI)Cash Plus Stock$307 million$26.06$24.2327,23512/31/20147.54%16.88%
+MONT06/11/2014Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A)All Cash$693 million$22.60$21.05565,78309/30/20147.36%37.85%
+COV06/15/2014Medtronic, Inc. (MDT)Cash Plus Stock$42.9 billion$94.81$88.535,292,32801/31/20157.09%13.34%
+OVRL05/15/2014Sphere 3D Corporation (ANY)All Stock$81.13 million$4.59$4.3014,50109/30/20146.75%34.70%
+IGT07/16/2014GTECH S.p.A. (GTKYY)Special Conditions$6.4 billion$18.25$17.1518,448,15206/30/20156.41%6.81%
+HCBK08/27/2012M&T Bank Corporation (MTB)All Stock$3.7 billion$10.26$9.714,391,26012/31/20145.63%12.61%
+TWC02/13/2014Comcast Corporation (CMCSA)All Stock$45.2 billion$156.80$148.461,623,59912/31/20145.62%12.58%
+CHRM05/19/2014Engadin Parent Limited (N/A)Special ConditionsN/A$4.70$4.506,14309/30/20144.44%22.85%
+SPCHA06/30/2014Vestis Retail Group, LLC (N/A)All CashN/A$1.20$1.155,95909/30/20144.35%22.35%
+SWY03/06/2014AB Acquisition LLC (N/A)Special ConditionsN/A$36.15$34.769,563,35412/31/20144.00%8.95%
+FRNK07/15/2014Towne Bank (TOWN)All Stock$275 million$21.60$20.8931,67912/31/20143.41%7.63%
+SUSS04/28/2014Energy Transfer Partners, L.P. (ETP)All Stock$1.8 billion$82.38$79.94180,47009/30/20143.05%15.69%
+NED04/02/2014Rainbow Education Holding Limited (N/A)All CashN/A$2.85$2.771,60008/15/20142.89%42.17%
+THRD06/04/2014National Penn Bancshares Inc. (NPBC)All Stock$138 million$43.00$41.807612/31/20142.88%6.44%
+QCOR04/07/2014Mallinckrodt plc (MNK)Cash Plus Stock$5.6 billion$97.37$95.011,453,02509/30/20142.49%12.79%
+SPBC05/05/2014Green Bank (N/A)All Cash$46.2 million$29.55$28.8510009/30/20142.43%12.47%
+PTEK04/30/2014Multimedia Games, Inc. (N/A)All CashN/A$1.35$1.326,51812/31/20142.27%5.09%
+FFCO04/14/2014CB Financial Services, Inc. (CBFV)All Stock54.5 million$22.37$21.9066611/15/20142.14%6.68%
+GECR06/23/2014State Bank Financial Corporation (STBZ)Special Conditions$82 million$22.35$21.9145903/31/20152.01%2.90%
+LSBI06/04/2014Old National Bancorp. (ONB)Cash Plus Stock$66.7 million$42.10$41.28N/A12/31/20141.99%4.45%
+FUBC05/08/2014Valley National Bancorp (VLY)All Stock$312 million$8.65$8.4971,11810/31/20141.89%6.78%
+IDIX06/09/2014Merck & Co. Inc. (MRK)All Cash$3.85 billion$24.50$24.062,517,13709/30/20141.83%9.40%
+OBAF04/08/2014F.N.B. Corporation (FNB)All Stock$94 million$21.84$21.521,46609/30/20141.46%7.53%
+DCIN05/15/2014Carmike Cinemas Inc. (CKEC)All StockN/A$5.77$5.6917,55309/30/20141.45%7.44%
+FWLT02/13/2014AMEC PLC (AMCBF)Cash Plus Stock$3.3 billion$34.38$33.97208,47012/31/20141.22%2.72%
+TWTC06/16/2014Level 3 Communications, Inc. (LVLT)Cash Plus Stock$7.3 billion$42.44$41.962,180,22112/31/20141.14%2.55%
+EDS12/02/2013Pan Long Company Limited (N/A)All Cash$60.1 million$1.78$1.765,20007/30/20141.14%46.09%
+NOVB01/21/2014TriCo Bancshares (TCBK)All Stock$178.4 million$21.54$21.3129,76109/30/20141.06%5.44%
+TQNT02/24/2014RF Micro Devices Inc. (RFMD)All Stock$1.6 billion$17.20$17.034,932,15512/31/20141.01%2.26%
+TEG06/23/2014Wisconsin Energy Corp. (WEC)Cash Plus Stock$9.1 billion$69.77$69.14337,05606/30/20150.91%0.96%
+ROC07/15/2014Albemarle Corporation (ALB)Cash Plus Stock$6.2 billion$84.37$83.611,537,98003/31/20150.91%1.31%
+PL06/03/2014Dai-ichi Life Insurance Company (N/A)All Cash$5.7 billion$70.00$69.39773,29901/31/20150.88%1.65%
+GA03/16/2014Giant Investment Limited (�Parent�) and Giant Merger Limited (N/A)All Cash$3 billion$12.00$11.925,423,77212/31/20140.67%1.50%
+ZIPR07/15/2014Realogy Holdings Corp. (RLGY)All Cash$166 million$6.75$6.7051,027,39709/30/20140.67%3.45%
+ENVE06/30/2014Consolidated Communications Holdings Inc. (CNSL)All Stock$350 million$16.08$16.0025,65912/31/20140.53%1.18%
+NDZ03/28/2014Sterigenics (N/A)All Cash$727 million$13.00$12.941,204,03712/31/20140.46%1.04%
+MEAS06/18/2014TE Connectivity Ltd. (TEL)All Cash$1.7 billion$86.00$85.62138,99612/31/20140.44%0.99%
+HCT06/02/2014Ventas, Inc. (VTR)All Stock$2.6 billion$10.93$10.882,141,54212/31/20140.43%0.96%
+HSH07/02/2014Tyson Foods, Inc. (TSN)All Cash$8.55 billion$63.00$62.762,323,94609/27/20140.38%2.05%
+MCRS06/23/2014Oracle Corporation (ORCL)All Cash$4.6 billion$68.00$67.812,768,05612/31/20140.28%0.63%
+RDA11/11/2013Tsinghua Unigroup Ltd. (N/A)All Cash$910 million$18.50$18.454,401,94308/08/20140.27%5.50%
+URS07/13/2014AECOM Technology Corporation (ACM)Cash Plus Stock$6 billion$59.00$58.852,755,82110/31/20140.25%0.90%
+ESC02/20/2014Brookdale Senior Living Inc. (BKD)All Stock$2.8 billion$33.74$33.66385,06409/30/20140.25%1.28%
+PLXT06/24/2014Avago Technologies Limited (AVGO)All Cash$293 million$6.50$6.485335,78211/03/20140.23%0.80%
+SGK03/17/2014Matthews International Corporation (MATW)Cash Plus Stock$577 million$20.68$20.6533,73009/30/20140.13%0.67%
+VITC07/02/2014The Kroger Co. (KR)All Cash$280 million$8.00$7.99315,06109/30/20140.13%0.64%
+TAYC07/15/2013MB Financial Inc. (MBFI)Cash Plus Stock$680 million$21.46$21.4384,38609/30/20140.12%0.62%
+DFZ05/02/2014Mill Road Capital (N/A)All Cash$215 million$19.00$18.9844,86909/30/20140.11%0.54%
+HITT06/09/2014Analog Devices, Inc. (ADI)All Cash$2 billion$78.00$77.92644,38609/30/20140.10%0.53%
+FIO06/16/2014SanDisk Corp. (SNDK)All Cash$1.1 billion$11.25$11.241,437,05109/30/20140.09%0.46%
+OPEN06/13/2014The Priceline Group Inc. (PCLN)All Cash$2.6 billion$103.00$102.99450,87309/30/20140.01%0.05%
+LIN03/22/2014Media General, Inc. (MEG)Special Conditions$2.6 billion$27.82$27.8569,21503/31/2015-0.11%-0.16%
+ARX05/20/2014Cobham plc (N/A)All Cash$1.46 billion$10.50$10.5299,80509/30/2014-0.19%-0.98%
+MDCI06/25/2014Owens & Minor, Inc. (OMI)All Cash$208 million$13.80$13.83255,16412/31/2014-0.22%-0.49%
+EQU12/09/2013Petroflow Energy Corporation (N/A)All Cash$230 million$5.43$5.45396,94907/31/2014-0.37%-13.39%
+UNS12/11/2013Fortis, Inc. (N/A)All Cash$4.3 billion$60.25$60.49272,61312/31/2014-0.40%-0.89%
+POM04/30/2014Exelon Corporation (EXC)All Cash$7.2 billion$27.25$27.391,374,69409/30/2015-0.51%-0.43%
+SWS04/01/2014Hilltop Holdings Inc. (HTH)Cash Plus Stock$260 million$7.22$7.2667,48912/31/2014-0.60%-1.34%
+ISS06/06/2013Mr. Tianwen Liu, the Company’s CEO and the chairman of its Board of Directors, and ChinaAMC Capital Management Limited (N/A)All CashN/A$5.45$5.49442,38109/30/2014-0.73%-3.75%
+KOG07/13/2014Whiting Petroleum Corp. (WLL)All Stock$6 billion$15.57$16.017,591,47612/31/2014-2.73%-6.12%
+AUXL06/26/2014QLT Inc. (QLTI)All StockN/A$18.03$19.241,037,13712/31/2014-6.28%-14.07%
+CHDX02/17/2014a buyer consortium (the “Buyer Consortium”) of an affiliate of TPG (together with its affiliates, “TPG”), an affiliate of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun”), and Ms. Roberta Lipson, the CEO of the Company (N/A)All Cash$369 million$19.50$23.48185,15612/31/2014-16.95%-37.96%

Voluntary Disclosure: I hold a long position in Safeway (SWY).

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria