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Merger Arbitrage Mondays – September 15, 2014

  • September 14, 2014

Merger Activity increased last week with six new mergers announced and one deal 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 2014116
Total Number of Deals Not Completed in 20142
Total Number of Pending Deals
Cash Deals24
Stock Deals20
Stock & Cash Deals15
Special Conditions8
Total Number of Pending Deals67
Total Deal Size$487.49 billion

New Deals:

  1. The acquisition of Multimedia Games Holding Company (MGAM) by Global Cash Access Holdings (GCA) for $1.2 billion or $36.50 per share in cash.
  2. The acquisition of The Bank of Kentucky Financial Corporation (BKYF) by BB&T Corporation (BBT) in a cash plus stock deal. Under the terms of the agreement, shareholders of The Bank of Kentucky Financial Corporation will receive 1.0126 shares of BB&T common stock and $9.40 of cash for each share of The Bank of Kentucky stock.
  3. The acquisition of Annie’s (BNNY) by General Mills (GIS) for $820 million or $46.00 per share in cash.
  4. The acquisition of Colonial Financial Services (COBK) by Cape Bancorp (CBNJ) for $55 million in a cash or stock deal. Under the terms of the agreement, shareholders of Colonial Financial Services will be entitled to elect to receive either $14.50 per share in cash or 1.412 shares of Cape’s common stock, subject to 50% of the shares being exchanged for stock and 50% for cash. We are treating this as an all-stock deal.
  5. The acquisition of Taminco Corporation (TAM) by Eastman Chemical (EMN) for $2.8 billion or $26.00 per share in cash.
  6. The acquisition of Conversant (CNVR) by Alliance Data Systems Corporation (ADS) in a cash or stock deal. Under the terms of the transaction, the consideration to be received by Conversant shareholders is valued at $35 per share. The offer comprises 52% stock and 48% cash, which is equal to $18.20 per share of Alliance Data stock (based on a fixed exchange ratio of 0.07037) and $16.80 per share of cash to Conversant shareholders. The exchange ratio of 0.07037 that determines the aggregate stock consideration will remain fixed at close. The cash portion of the aggregate consideration floats within a 10% symmetrical collar that provides for a minimum of $14.98 per share (at $284 per share of Alliance Data stock) up to a maximum of $18.62 per share (at a $233 price per share of Alliance Data stock) – equaling $35.00 of total value within the collar. If such average Alliance Data stock price is outside of the collar range, Conversant shareholders will receive in the aggregate (i) 0.07037 shares of Alliance Data stock, and (ii) either the minimum $14.98 per share of cash above $284 or the maximum $18.62 of cash below $233. The final target Alliance Data share price used to calculate the collar and cash consideration mix will be based on the 15 day volume weighted average price of Alliance Data stock as of the second day prior to closing. Conversant shareholders may elect to receive (i) all cash, (ii) all stock (each subject to proration in the event of oversubscription), or (iii) the aggregate mix of consideration. We are tracking this deal as an all cash deal priced at $35.

Deal Updates:

  1. On September 9, 2014, Interdealer broker BGC Partners launched a $675 million hostile bid for rival GFI Group (GFIG), topping an agreed offer from exchange operator CME Group Inc.
  2. On September 11, 2014, after being rejected twice, Dollar General Corporation (DG) went hostile and initiated a tender offer of $80.00 per share to shareholders of Family Dollar Stores (FDO).

Closed Deals:

  1. The acquisition of MICROS Systems (MCRS) by Oracle Corporation (ORCL) on September 9, 2014. It took 78 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

LO07/15/2014Reynolds American Inc. (RAI)$67.20$59.0806/30/201513.74%17.41%
TWGP01/06/2014ACP Re Ltd. (N/A)$2.50$2.2311/15/201412.11%72.45%
LIN03/22/2014Media General, Inc. (MEG)$25.97$23.3703/31/201511.13%20.61%
DTV05/18/2014AT&T, Inc. (T)$95.00$86.8505/31/20159.38%13.28%
OABC04/29/2014Southside Bancshares Inc. (SBSI)$27.62$25.4412/31/20148.56%29.19%
MONT06/11/2014Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A)$22.60$20.8509/30/20148.39%204.24%
IGT07/16/2014GTECH S.p.A. (GTKYY)$18.25$16.8906/30/20158.05%10.20%
COV06/15/2014Medtronic, Inc. (MDT)$97.51$90.6701/31/20157.55%19.96%
TWC02/13/2014Comcast Corporation (CMCSA)$164.11$154.3112/31/20146.35%21.65%
TRLA07/28/2014Zillow, Inc. (Z)$56.80$54.1903/31/20154.81%8.91%

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

+LO07/15/2014Reynolds American Inc. (RAI)Cash Plus Stock$27.4 billion$67.20$59.081,031,52406/30/201513.74%17.41%
+TWGP01/06/2014ACP Re Ltd. (N/A)All Cash$172.1 million$2.50$2.231,360,42811/15/201412.11%72.45%
+LIN03/22/2014Media General, Inc. (MEG)Special Conditions$2.6 billion$25.97$23.37126,11703/31/201511.13%20.61%
+DTV05/18/2014AT&T, Inc. (T)Special Conditions$48.5 billion$95.00$86.852,049,35805/31/20159.38%13.28%
+OABC04/29/2014Southside Bancshares Inc. (SBSI)Cash Plus Stock$307 million$27.62$25.4411,49012/31/20148.56%29.19%
+MONT06/11/2014Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A)All Cash$693 million$22.60$20.85463,76209/30/20148.39%204.24%
+IGT07/16/2014GTECH S.p.A. (GTKYY)Special Conditions$6.4 billion$18.25$16.891,413,69206/30/20158.05%10.20%
+COV06/15/2014Medtronic, Inc. (MDT)Cash Plus Stock$42.9 billion$97.51$90.672,031,82101/31/20157.55%19.96%
+TWC02/13/2014Comcast Corporation (CMCSA)All Stock$45.2 billion$164.11$154.311,324,82412/31/20146.35%21.65%
+TRLA07/28/2014Zillow, Inc. (Z)All Stock$3.5 billion$56.80$54.191,241,06803/31/20154.81%8.91%
+SWY03/06/2014AB Acquisition LLC (N/A)Special ConditionsN/A$36.15$34.501,166,91112/31/20144.78%16.31%
+EDS12/02/2013Pan Long Company Limited (N/A)All Cash$60.1 million$1.78$1.7046,76509/30/20144.71%114.51%
+HCBK08/27/2012M&T Bank Corporation (MTB)All Stock$3.7 billion$10.58$10.132,314,89512/31/20144.47%15.25%
+OVRL05/15/2014Sphere 3D Corporation (ANY)All Stock$81.13 million$3.43$3.28268,17009/30/20144.39%106.83%
+BYI08/01/2014Scientific Games Corporation (SGMS)All Cash$5.1 billion$83.30$80.26663,04901/31/20153.79%10.02%
+QRE07/24/2014Breitburn Energy Partners L.P. (BBEP)All Stock$3 billion$21.41$20.63308,99401/31/20153.77%9.96%
+FFCO04/14/2014CB Financial Services, Inc. (CBFV)All Stock54.5 million$22.72$21.9049811/15/20143.73%22.31%
+FFKY04/22/2014Community Bank Shares of Indiana Inc. (CBIN)All Stock$17.9 million$3.99$3.853,70509/19/20143.72%339.64%
+ENVE06/30/2014Consolidated Communications Holdings Inc. (CNSL)All Stock$350 million$18.42$17.8235,13912/31/20143.35%11.41%
+PTEK04/30/2014Multimedia Games, Inc. (N/A)All CashN/A$1.35$1.312,31512/31/20143.05%10.42%
+TEG06/23/2014Wisconsin Energy Corp. (WEC)Cash Plus Stock$9.1 billion$68.34$66.59206,43106/30/20152.62%3.32%
+CPWR09/02/2014Thoma Bravo, LLC (N/A)All Cash$2.5 billion$10.92$10.655,953,93801/31/20152.54%6.71%
+EPB08/10/2014Kinder Morgan, Inc. (KMI)Cash Plus StockN/A$40.34$39.491,892,79312/31/20142.14%7.32%
+FRNK07/15/2014Towne Bank (TOWN)All Stock$275 million$19.99$19.5826,48912/31/20142.10%7.18%
+SPBC05/05/2014Green Bank (N/A)All Cash$46.2 million$29.55$29.017,82509/30/20141.86%45.29%
+PEOP08/05/2014Independent Bank Corp. (INDB)All Stock$130.6 million$20.81$20.436,34703/31/20151.84%3.40%
+BKYF09/08/2014BB&T Corporation (BBT)Cash Plus Stock$363 million$48.04$47.2144,06203/31/20151.76%3.26%
+KMP08/10/2014Kinder Morgan, Inc. (KMI)Cash Plus StockN/A$93.58$91.981,930,68712/31/20141.74%5.94%
+CHRM05/19/2014Engadin Parent Limited (N/A)Special ConditionsN/A$4.70$4.625,88809/30/20141.73%42.14%
+THRD06/04/2014National Penn Bancshares Inc. (NPBC)All Stock$138 million$43.42$42.7014,04712/31/20141.70%5.78%
+GECR06/23/2014State Bank Financial Corporation (STBZ)Special Conditions$82 million$22.35$22.00N/A03/31/20151.59%2.95%
+KMR08/10/2014Kinder Morgan, Inc. (KMI)All StockN/A$93.83$92.42740,26012/31/20141.53%5.20%
+NBTF08/04/2014Peoples Bancorp Inc. (PEBO)Cash Plus Stock$109 million$30.41$30.0011,24803/31/20151.38%2.56%
+FWLT02/13/2014AMEC PLC (AMCBF)Cash Plus Stock$3.3 billion$32.02$31.59184,42912/31/20141.35%4.60%
+FRF08/12/2014Tiptree Financial Inc. (TIPT)All Cash$218 million$10.00$9.88120,01901/31/20151.21%3.21%
+NOVB01/21/2014TriCo Bancshares (TCBK)All Stock$178.4 million$22.65$22.406,41009/30/20141.11%27.01%
+FUBC05/08/2014Valley National Bancorp (VLY)All Stock$312 million$8.91$8.8279,65810/31/20141.01%8.00%
+KOG07/13/2014Whiting Petroleum Corp. (WLL)All Stock$6 billion$14.78$14.642,730,05312/31/20140.99%3.37%
+PSMI08/22/2014Murata Electronics North America, Inc. (N/A)All Cash$471 million$12.50$12.39277,93501/31/20150.89%2.35%
+IRF08/20/2014Infineon Technologies AG (IFNNY)All Cash$2.4 billion$40.00$39.661,300,18401/31/20150.86%2.27%
+TQNT02/24/2014RF Micro Devices Inc. (RFMD)All Stock$1.6 billion$20.33$20.182,228,51612/31/20140.77%2.61%
+TWTC06/16/2014Level 3 Communications, Inc. (LVLT)Cash Plus Stock$7.3 billion$41.26$40.951,742,32712/31/20140.76%2.60%
+PL06/03/2014Dai-ichi Life Insurance Company (N/A)All Cash$5.7 billion$70.00$69.60441,99701/31/20150.57%1.52%
+CNVR09/11/2014Alliance Data Systems Corporation (ADS)Special Conditions$2.3 billion$35.00$34.8013,886,25012/31/20140.57%1.96%
+POM04/30/2014Exelon Corporation (EXC)All Cash$7.2 billion$27.25$27.101,203,90309/30/20150.55%0.53%
+PIKE08/04/2014Court Square Capital Partners & J. Eric Pike, the Company�s Chairman and Chief Executive Officer (N/A)All CashN/A$12.00$11.96110,02412/31/20140.33%1.14%
+ITMN08/24/2014Roche (N/A)All Cash$8.3 billion$74.00$73.782,709,86912/31/20140.30%1.02%
+BOLT09/03/2014Teledyne Technologies Inc. (TDY)All Cash$171 million$22.00$21.9473,50612/31/20140.27%0.93%
+OBAF04/08/2014F.N.B. Corporation (FNB)All Stock$94 million$22.74$22.692,21009/30/20140.24%5.72%
+MEAS06/18/2014TE Connectivity Ltd. (TEL)All Cash$1.7 billion$86.00$85.80227,15212/31/20140.23%0.80%
+COBR08/28/2014Monomoy Capital Partners II, L.P. (N/A)All CashN/A$4.30$4.2930,46612/31/20140.23%0.80%
+ROC07/15/2014Albemarle Corporation (ALB)Cash Plus Stock$6.2 billion$81.29$81.11620,02503/31/20150.22%0.41%
+MDCI06/25/2014Owens & Minor, Inc. (OMI)All Cash$208 million$13.80$13.7930,39012/31/20140.07%0.25%
+LSBI06/04/2014Old National Bancorp. (ONB)Cash Plus Stock$66.7 million$41.58$41.569,38912/31/20140.05%0.16%
+URS07/13/2014AECOM Technology Corporation (ACM)Cash Plus Stock$6 billion$60.28$60.27279,30010/31/20140.02%0.17%
+ARX05/20/2014Cobham plc (N/A)All Cash$1.46 billion$10.50$10.50406,74009/30/20140.00%0.00%
+BNNY09/08/2014General Mills, Inc. (GIS)All Cash$820 million$46.00$46.001,073,97812/31/20140.00%0.00%
+COBK09/10/2014Cape Bancorp, Inc. (CBNJ)All Stock$55 million$13.22$13.3037,21706/30/2014-0.63%2.98%
+HCT06/02/2014Ventas, Inc. (VTR)All Stock$2.6 billion$10.33$10.405,794,90612/31/2014-0.68%-2.33%
+MGAM09/08/2014Global Cash Access Holdings, Inc. (GCA)All Cash$1.2 billion$36.50$36.84548,79103/31/2015-0.92%-1.71%
+IMCB07/23/2014Columbia Banking System Inc. (COLB)Cash Plus Stock$121.5 million$19.41$19.631,02112/31/2014-1.11%-3.79%
+SWS04/01/2014Hilltop Holdings Inc. (HTH)Cash Plus Stock$260 million$7.08$7.17194,87512/31/2014-1.30%-4.44%
+TAM09/11/2014Eastman Chemical Co. (EMN)All Cash$2.8 billion$26.00$26.533,225,57612/31/2014-2.00%-6.81%
+FDO07/28/2014Dollar Tree, Inc. (DLTR)Special Conditions$9.2 billion$74.50$78.491,790,28401/31/2015-5.08%-13.45%
+AUXL06/26/2014QLT Inc. (QLTI)All StockN/A$20.16$22.481,052,47712/31/2014-10.30%-35.15%
+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$23.8832,68312/31/2014-18.34%-62.57%
+GFIG07/30/2014CME Group (N/A)All CashN/A$4.55$6.022,117,43801/31/2015-24.42%-64.59%

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

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