Merger Arbitrage Mondays – October 17, 2016

Merger activity decreased last week with one new deal 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 2016 181
Total Number of Deals Not Completed in 2016 16
Total Number of Pending Deals
Cash Deals 57
Stock Deals 14
Stock & Cash Deals 11
Special Conditions 6
Total Number of Pending Deals 88
Total Deal Size $1151.45 billion

New Deals:

  1. The acquisition of Gas Natural (EGAS) by First Reserve Energy Infrastructure for $196 million or $13.10 per share in cash.

Deal Updates:

  1. On October 10, 2016, InterOil Corporation (IOC) announced that, after the close of business on October 7, 2016, the Supreme Court of Yukon approved the pending transaction with Exxon Mobil Corporation (XOM), including finding that the transaction is fair and reasonable. The decision of the Supreme Court of Yukon followed a contested hearing held on September 27, 2016.
  2. On October 12, 2016, Capital Bank Financial (CBF) and CommunityOne Bancorp (COB) finally received regulatory approval to merge. The companies announced that the deal received approval from the Federal Reserve, the FDIC and the North Carolina Office of the Commissioner of Banks to complete the previously announced merger. The deal is expected to close on or about Oct. 26.
  3. On October 14, 2016, Alaska Air Group (ALK) said that it was making “good progress” in talks with the Justice Department on a planned merger with Virgin America (VA). The Seattle-based company had said previously that it would not close its deal with Virgin before Oct. 17, and spokeswoman Bobbie Egan declined to spell out what would happen after that date.

Closed Deals:

  1. The acquisition of ITC Holdings (ITC) by Fortis (FTS.TO) on October 14, 2016. It took 248 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) $165.79 $120.90 03/31/2017 37.13% 82.13%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $43.16 12/31/2016 29.75% 144.78%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $7.06 12/31/2016 27.48% 133.73%
HUM 07/03/2015 Aetna Inc. (AET) $216.82 $170.82 12/31/2016 26.93% 131.06%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $102.11 12/31/2017 25.36% 21.03%
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 $8.46 12/31/2016 18.20% 88.59%
FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) $26.80 $22.95 12/31/2016 16.78% 81.64%
CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) $36.00 $31.13 04/15/2017 15.64% 31.72%
MHGC 05/09/2016 SBE (N/A) $2.25 $1.97 12/31/2016 14.21% 69.17%
TSL 08/01/2016 Investor consortium comprising Mr. Gao and other entities. (N/A) $11.60 $10.39 03/31/2017 11.62% 25.71%

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 WhiteWave Foods (WWAV), LinkedIn (LNKD), Tobira Therapeutics (TBRA), 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

4 Comments

  1. Ajay Mehta
    October 20, 2016 at 12:56 pm

    I think you are missing SYT from your list.

    Ajay

    • Asif Suria
      October 24, 2016 at 11:18 am

      You are right and we have added the deal now.

  2. Nachtwacht
    November 2, 2016 at 11:08 am

    Hello,

    First of all my compliments for your site. Very informative.

    I wanted to do some analisys on the deals that did not go through. Wanted to see how much it would have “cost” if I would have taken a position in those 16 deals.

    Unfortunatly I see that from the 10 of october to the 17th of october, there are 3 more deals that are registered as “did not complete” but unfortunatly you do not have listed the actual companies involved.

    Do you have a list for that somewhere or am I missing something on the site ?

    Thanks in advance,

    greetings

    • Asif Suria
      November 2, 2016 at 11:26 am

      Thank you for your kind words. The last three failed deals we closed in the database were the acquisition of KLA-Tencor Corporation (KLAC) by Lam Research, the acquisition of National Holdings Corporation (NHLD) by Fortress and the acquisition of Emmis Communications (EMMS). These deals didn’t all fail between Oct 10th and 17th and we most likely updated the database after a few days/weeks after the event.

      Regarding NHLD, while the merger failed because not enough shares were tendered, Fortress accepted all tendered shares and hence the deal worked out well for arbs.

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