Merger Arbitrage Mondays – October 31, 2016

Merger Activity decreased last week with four new deals 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 2016 187
Total Number of Deals Not Completed in 2016 16
Total Number of Pending Deals
Cash Deals 58
Stock Deals 15
Stock & Cash Deals 11
Special Conditions 8
Total Number of Pending Deals 92
Total Deal Size $1259.76 billion

New Deals:

  1. The acquisition of Merchants Bancshares (MBVT) by Community Bank System (CBU) for $304 million. Under the terms of the agreement, shareholders of Merchants Bancshares will have the option to receive, at their election, consideration per share equal to (i) 0.963 shares of Community Bank System common stock, (ii) $40.00 in cash or (iii) the combination of 0.6741 shares of Community Bank System common stock and $12.00 in cash, subject to an overall proration to 70% stock and 30% cash. We are treating this as an all stock deal.
  2. The acquisition of JP Energy Partners (JPEP) by American Midstream Partners (AMID) in an all stock deal. Under the terms of the agreement, American Midstream common units will be issued to JP Energy public unitholders at an exchange ratio of 0.5775:1.
  3. The acquisition of Middleburg Financial Corporation (MBRG) by Access National Corporation (ANCX) for $233.1 million in an all stock deal. Under the terms of the merger agreement, Middleburg shareholders will receive a fixed exchange ratio of 1.3314 Access National shares for each share of Middleburg common stock owned.
  4. The acquisition of NXP Semiconductors (NXPI) by QUALCOMM Incorporated (QCOM) for $38 billion or $110 per share in cash.

Deal Updates:

  1. On October 24, 2016, The German government withdraws its approval for a Chinese takeover of chip equipment maker Aixtron (AIXG), raising an unexpected hurdle for a €670M ($728M) deal on the home stretch.
  2. October 25, 2016: Shareholders have filed five separate suits in two weeks against Spectra Energy (SE), alleging the Houston pipeline company is selling itself too cheaply to the Canadian energy firm Enbridge.
  3. On October 26, 2016, The European Commission said that it had approved U.S. laser tools and systems maker Coherent’s (COHR) $942 million acquisition of rival Rofin-Sinar Technologies (RSTI), subject to conditions.
  4. On October 26, 2016, Monster Worldwide (MWW) announced that its Board of Directors has unanimously rejected the highly-conditional, partial tender offer made by an affiliate of MediaNews Group on October 25, 2016 to acquire up to approximately 10% of the outstanding shares of common stock of Monster at a price of $3.70 per share.
  5. On October 27, 2016, St. Jude Medical (STJ), announced that, based on the preliminary voting results from St. Jude Medical’s Annual Meeting of Shareholders held earlier today, St. Jude Medical shareholders approved the merger agreement under which Abbott (ABT) will acquire St. Jude Medical.
  6. On October 27, 2016, Randstad Holding (RAND) announced that it has received merger control clearance from the European Commission for its acquisition of Monster Worldwide (MWW).
  7. On October 28, 2016, European Union antitrust regulators opened an in-depth investigation into state-owned Chinese chemicals group ChemChina’s $43 billion bid for Swiss pesticides and seeds group Syngenta (SYT), China’s biggest-ever foreign acquisition.
  8. On October 28, 2016, NetSuite (N) disclosed that it had received a letter from T. Rowe Price saying that if Oracle were to offer $133 per share, T. Rowe would be on board.
  9. On October 29, 2016, The Sherwin-Williams Company (SHW) and The Valspar Corporation (VAL) issued the following statement in response to unfounded market rumors concerning regulatory approvals for the definitive agreement between Sherwin-Williams and Valspar, which was announced on March 20, 2016: Sherwin-Williams and Valspar continue to cooperate fully with the FTC staff and continue to expect the transaction will close by the end of Q1 calendar year 2017.  Given the complementary nature of the businesses and the benefits this transaction will provide to customers, Sherwin-Williams and Valspar continue to believe that no or minimal divestitures should be required to complete the transaction.

Closed Deals:

  1. The acquisition of Chicopee Bancorp, Inc. by Westfield Financial on October 21, 2016. It took 200 days for this deal to be completed.
  2. The acquisition of  CommunityOne Bancorp by Capital Bank Financial on October 26, 2016.  It took 338 days for this deal to be completed.
  3. The acquisition of Vitae Pharmaceuticals by Allergan plc on October 26, 2016. It took 42 days for this deal to be completed.
  4. The acquisition of Raptor Pharmaceutical Corp. by Horizon Pharma plc on October 25, 2016. It took 43 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) $166.07 $121.63 03/31/2017 36.54% 88.32%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.98 06/30/2017 36.43% 54.95%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $6.615 01/31/2017 36.05% 143.04%
WGBS 05/13/2016 Takara Bio USA Holdings, Inc. (N/A) $0.95 $0.705 03/31/2017 34.75% 84.00%
AIXG 05/23/2016 Fujian Grand Chip Investment Fund LP (N/A) $6.66 $4.98 12/31/2016 33.73% 201.86%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $100.97 12/31/2017 26.77% 22.94%
HUM 07/03/2015 Aetna Inc. (AET) $214.96 $171.11 12/31/2016 25.63% 153.36%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $44.58 12/31/2016 25.62% 153.28%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $87.50 12/31/2017 22.86% 19.58%
FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) $26.80 $21.90 12/31/2016 22.37% 133.88%

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), Rite Aid (RAD), Syngenta (SYT) 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

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