Merger Arbitrage Mondays – October 10, 2016

Merger activity increased last week with three new deals announced and six 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 2016 180
Total Number of Deals Not Completed in 2016 13
Total Number of Pending Deals
Cash Deals 56
Stock Deals 14
Stock & Cash Deals 12
Special Conditions 6
Total Number of Pending Deals 88
Total Deal Size $1151.25 billion

New Deals:

  1. The acquisition of Cabela’s Incorporated (CAB) by Bass Pro Shops for $5.5 billion or $65.50 per share in cash.
  2. The acquisition of Endurance Specialty Holdings (ENH) by SOMPO Holdings for $6.3 billion or $93.00 per share in cash.
  3. The acquisition of Georgetown Bancorp (GTWN) by Salem Five Bancorp for $49.2 million or $26.00 per share in cash.

Deal Updates:

  1. On October 5, 2016, KLA-Tencor Corporation (KLAC) and Lam Research (LRCX) announced that they have agreed to terminate their proposed merger agreement.
  2. October 5, 2016: Lawyers in the antitrust case surrounding Aetna’s (AET) proposed acquisition of Humana (HUM) have accused the U.S. Department of Justice of “serious delay and misconduct.”
  3. On October 5, 2016, The WhiteWave Foods Company (WWAV) announced that during a special stockholder meeting, the stockholders of the company approved the merger agreement under which Danone S.A. will acquire all of the outstanding shares of WhiteWave. Stockholders also approved other proposals relating to the merger.
  4. On October 7, 2016, Oracle (ORCL) announced that it has extended the expiration of its tender offer for the acquisition of NetSuite (N), for the final time, to November 4, 2016. “This will be the final extension that Oracle is obligated to make under the merger agreement,” Oracle said in a statement. This extension was triggered after only 22% of shareholders tendered shares. T. Rowe Price, one of the largest holders of NetSuite after Oracle’s Larry Ellison, has not been supportive of the deal and wants a higher price. The stock dropped $4.10 or 3.75% on Friday, increasing the spread on the deal to 3.62% and 15.93% on an annualized basis.
  5. On October 7, 2016, Boston Scientific Corporation (BSX) announced that its wholly owned merger subsidiary, Falcon Merger, has launched its previously announced tender offer for all shares of EndoChoice Holdings (GI) at a price of $8.00 per share net to the holder in cash.
  6. October 7, 2016: Anthem (ANTM) and Cigna (CI) should be required to reveal documents in which the health insurance companies accuse each other of breaching their merger agreement, according to an adviser to the judge overseeing a U.S. lawsuit seeking to block the deal. Letters and e-mails between the two companies may become evidence in the Justice Department’s lawsuit seeking to halt the $48 billion deal, Richard Levie, who has been appointed special master in the case, said in a report Thursday. Anthem and Cigna argue the documents shouldn’t be released because they are privileged communications.

Closed Deals:

  1. The acquisition of Golden Enterprises (GLDC) by Utz Quality Foods on October 3, 2016. It took 76 days for this deal to be completed.
  2. The acquisition of Skullcandy (SKUL) by Mill Road on October 3, 2016. It took 40 days for this deal to be completed.
  3. The acquisition of IMS Health Holdings (IMS) by Quintiles Transnational Holdings (Q) on October 3, 2016. It took 153 days for this deal to be completed.
  4. The acquisition of Piedmont Natural Gas (PNY) by Duke Energy Corporation (DUK) on October 4, 2016. It took 344 days for this deal to be completed.
  5. The acquisition of Hutchinson Technology (HTCH) by TDK Corporation on October 6, 2016. It took 338 days for this deal to be completed.
  6. The acquisition of Parkway Properties (PKY) by Cousins Properties Incorporated (CUZ) on October 6, 2016. It took 160 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
CI 07/24/2015 Anthem, Inc. (ANTM) $166.20 $127.23 03/31/2017 30.63% 65.00%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $43.58 12/31/2016 28.50% 126.86%
APOL 02/08/2016 A consortium of investors including The Vistria Group, LLC, funds affiliated with Apollo Global Management, LLC and and Najafi Companies (N/A) $10.00 $8.01 12/31/2016 24.84% 110.59%
HUM 07/03/2015 Aetna Inc. (AET) $220.24 $177.74 12/31/2016 23.91% 106.44%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $103.36 12/31/2017 23.84% 19.47%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $7.41 12/31/2016 21.46% 95.51%
SCTY 08/01/2016 Tesla Motors (TSLA) $21.63 $18.68 04/30/2017 15.78% 28.51%
FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) $26.80 $23.26 12/31/2016 15.22% 67.74%
WGBS 05/13/2016 Takara Bio USA Holdings, Inc. (N/A) $0.95 $0.84 03/31/2017 13.10% 27.79%
CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) $36.00 $31.89 04/15/2017 12.89% 25.16%

List of all pending deals:

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


Disclaimer: I hold long positions in Apollo Education (APOL) and Monster Worldwide (MWW). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria

2 Comments

  1. George Ciardi
    October 12, 2016 at 8:00 pm

    Was PVTB merger announced 9/29 or Jun/29 ? the original date seems to much earlier than stated here.

    • Asif Suria
      October 12, 2016 at 8:51 pm

      George it was 6/29 and not 9/26. Thank you for letting us know about it. I have fixed it.

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