Merger Arbitrage Mondays – April 17, 2017

Merger activity increased last week with nine new deals announced and three deals closing. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There was one new deal announced in the Deals in the Works section. We are pleased to release a new feature called the Deals in the Works Tool that lets you see all the potential deals and see which ones ended up with a definitive merger agreement and which ones were unsuccessful.

Deal Statistics:

Total Number of Deals Closed in 2017 58
Total Number of Deals Not Completed in 2017 2
Total Number of Pending Deals
Cash Deals 53
Stock Deals 18
Stock & Cash Deals 11
Special Conditions 9
Total Number of Pending Deals 91
Total Deal Size $686.59 billion

New Deals:

  1. The acquisition of Intrawest Resorts Holdings (SNOW) by an entity controlled by affiliates of the Aspen Skiing Company and KSL Capital Partners for $1.5 billion or $23.75 per share in cash.
  2. The acquisition of Xcerra Corporation (XCRA) by an affiliate of Sino IC Capital and Unic Capital Management for $439.97 million or $10.25 per share in cash.
  3. The acquisition of Straight Path Communications (STRP) by AT&T (T) for $1.6 billion. Under the terms of the agreement, the stock consideration received by Straight Path shareholders will be based on a variable number of AT&T common stock issued at transaction close to ensure fixed consideration of $95.63 per share.
  4. The acquisition of RetailMeNot (SALE) by Harland Clarke Holdings for $216 million or $11.60 per share in cash.
  5. The acquisition of UCP (UCP) by Century Communities (CCS) for $336 million in a cash plus stock deal. Under the terms of the agreement, each outstanding share of UCP common stock will be converted into the right to receive $5.32 in cash and 0.2309 of a newly issued share of Century common stock.
  6. The acquisition of Anchor Bancorp (ANCB) by Washington Federal (WAFD) for $63.9 million. Under the terms of the merger agreement, each outstanding share of Anchor common stock will be exchanged for shares of Washington Federal, Inc. common stock upon the closing of the transaction. Each share of Anchor common stock was valued at $25.75, which is approximately equal to Anchor’s tangible book value as of December 31, 2016. The exact number of shares to be issued and the exchange ratio will be determined based upon the average of the volume-weighted price of Washington Federal common stock for the twenty trading days ending on the fifth trading day immediately preceding the closing date, subject to a negotiated collar.
  7. The acquisition of Alliance Healthcare Services (AIQ) by Tahoe Investment Group for $682 million or $13.25 per share in cash.
  8. The acquisition of Swift Transportation Company (SWFT) by Knight Transportation (KNX) for $3.24 billion. Under the terms of the definitive agreement each Swift share will convert into 0.72 shares of Knight- Swift by means of a reverse stock split. Each share of Knight will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift is $22.07. Disclaimer: We normally don’t track mergers of companies that result in the creation of a new entity because of uncertainty around the value of the new company. In this case, because Knight shareholders will receive one share of the new company, we are going to treat this as an acquisition of Swift by Knight in order to figure out the spread on the deal.
  9. The acquisition of Nexvet Biopharma (NVET) by Zoetis (ZTS) for $26.93 million or $6.72 per share in cash.

Deal Updates:

  1. On April 12, 2017, ChemChina and Syngenta (SYT) announced that they have received approval from the Ministry of Commerce of the People’s Republic of China for the proposed acquisition of Syngenta by ChemChina.
  2. On April 12, 2017, Ixia (XXIA) announced that at its special meeting of shareholders, Ixia’s shareholders voted to approve the acquisition of Ixia by Keysight Technologies (KEYS).
  3. On April 13, 2017, ChemChina announced that the tender offers to purchase all publicly held Syngenta (SYT) shares and ADSs will end on 4 May, 2017.
  4. On April 14, 2017, Abbott (ABT) and Alere (ALR) announced that the companies have agreed to amend the existing terms of their agreement for Abbott’s acquisition of Alere. Under the amended terms, Abbott will pay $51 per common share to acquire Alere, for a new expected equity value of approximately $5.3 billion, reduced from the originally expected equity value of approximately $5.8 billion. The transaction is expected to close by the end of the third quarter of 2017. Under the amended terms, the date by which necessary regulatory approvals must be received has been extended to Sept. 30, 2017, from April 30, 2017.
  5. On April 14, 2017, Keysight Technologies (KEYS) and Ixia (XXIA) announced that clearance under the antitrust laws of Russia for the previously announced acquisition of Ixia by Keysight has been received, which follows the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, clearance under the antitrust laws of Germany and Israel and approval of the acquisition by Ixia’s shareholders. Subject to satisfaction of the remaining closing conditions, the companies expect the closing of the acquisition to occur on April 18, 2017.
  6. On April 16, 2017, MoneyGram (MGI) and Ant Financial Services Group announced that the companies have entered into an amendment to the definitive agreement under which MoneyGram will merge with Ant Financial. Pursuant to the amendment, Ant Financial increased the offer price to acquire all of the outstanding shares of MoneyGram from $13.25 per share to $18.00 per share in cash. The MoneyGram board of directors has unanimously approved the Amended Merger Agreement.

Closed Deals:

  1. The acquisition of The WhiteWave Foods Company (WWAV) by Danone on April 12, 2017. It took 279 days for this deal to be completed.
  2. The acquisition of B/E Aerospace (BEAV) by Rockwell Collins (COL) on April 13, 2017. It took 172 days for this deal to be completed.
  3. The acquisition of KongZhong Corporation (KZ) by Linkedsee Limited and Wiseman International Limited on April 13, 2017. It took 133 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $6.50 $4.54 07/31/2017 43.17% 150.07%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.00 06/30/2017 35.75% 176.33%
CAB 10/03/2016 Bass Pro Shops (N/A) $65.50 $53.39 06/30/2017 22.68% 111.88%
LSCC 11/03/2016 Canyon Bridge Capital Partners, Inc. (N/A) $8.30 $6.78 03/31/2017 22.42% -481.35%
ALR 02/01/2016 Abbott Laboratories (ABT) $51.00 $42.31 09/30/2017 20.54% 45.16%
WR 05/31/2016 Great Plains Energy Incorporated (GXP) $60.00 $53.70 06/30/2017 11.73% 57.87%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $115.77 12/31/2017 10.56% 14.95%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $98.26 12/31/2017 9.40% 13.30%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $16.51 12/31/2017 9.02% 12.77%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.70 12/31/2017 8.51% 12.04%

List of all pending deals:

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

Disclaimer: I hold positions in Rite Aid (RAD), Syngenta (SYT), Fortress Investment Group (FIG) and NXP Semiconductors (NXPI). 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: or follow me on Twitter@asifsuria

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