Merger Arbitrage Mondays – September 26, 2016

Merger activity decreased last week with six new deals announced and four deals closing. We had a new deal with the highest premium I have ever seen since we started tracking this data. The acquisition of Tobira Therapeutics (TBRA) by Allergan (AGN) discussed below led to a jump of 721% in the stock of Tobira because just the cash portion of the deal at $28.35 was several times higher than the Tobira’s closing price of $4.74 the previous day. The deal also includes a Contingent Value Right (CVR) that could pay up to $49.84 per share if certain conditions are met. Given the complexity of the deal, we have entered it as a “Special Conditions” deal and will publish a follow-up article explaining how we came up with our rough estimate of $40.89 per share for the deal.

The acquisition of Hutchinson Technology (HTCH) by TDK appears to be nearing completion and you can read a blow-by-blow account of my experience with this deal in a new article called A Wild Ride With Hutchinson Technology And The Case For Diversified Portfolios that is a follow-up to our earlier article Collecting Pennies in Front of a Bulldozer.

You can find all the active deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

Deal Statistics:

New Deals:

1. The acquisition of Isle of Capri Casinos (ISLE) by Eldorado Resorts (ERI) for $1.7 billion in a cash or stock deal. Under the terms of the agreement, Eldorado will acquire all of the outstanding shares of Isle of Capri for $23.00 in cash or 1.638 shares of Eldorado common stock. Elections are subject to proration such that the outstanding shares of Isle common stock will be exchanged for aggregate consideration comprised of 58% cash and 42% Eldorado common stock. We are treating this deal as a cash deal.
2. The acquisition of Infoblox (BLOX) by Vista Equity Partners for $1.6 billion or $26.50 per share in cash.
3. The acquisition of DTS (DTSI) by Tessera Technologies (TSRA) for $850 million or $42.50 per share in cash.

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