Merger Arbitrage Mondays – May 1, 2017

Merger activity increased last week with seven new deals announced and five 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 were two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2017 68
Total Number of Deals Not Completed in 2017 3
Total Number of Pending Deals
Cash Deals 52
Stock Deals 19
Stock & Cash Deals 11
Special Conditions 9
Total Number of Pending Deals 91
Total Deal Size $729.14 billion

New Deals:

  1. The acquisition of FelCor Lodging Trust Incorporated (FCH) by RLJ Lodging Trust (RLJ) for $2.5 billion in an all stock deal. Under the terms of the agreement, each share of FelCor common stock will be converted into 0.362 shares of newly issued common shares of RLJ common stock in a taxable merger.
  2. The acquisition of Akorn (AKRX) by Fresenius Kabi for $4.75 billion or $34.00 per share in cash.
  3. The acquisition of Advancepierre Foods Holdings (APFH) by Tyson Foods (TSN) for $4.2 billion or $40.25 per share in cash.
  4. The acquisition of NORD ANGLIA EDUCATION (NORD) by Canada Pension Plan Investment Board and Baring Private Equity Asia for $4.3 billion or $32.50 in cash.
  5. The acquisition of Sajan (SAJA) by AMPLEXOR International for $28.5 million or $5.83 per share in cash.
  6. The acquisition of Park Sterling Corporation (PSTB) by South State Corporation (SSB) for $690.8 million in an all stock deal. Under the terms of the agreement, shareholders of Park Sterling Corporation will receive 0.14 shares of South State common stock for each share of Park Sterling common stock.
  7. The acquisition of Paragon Commercial (PBNC) by TowneBank (TOWN) for $323.7 million in an all stock deal. Under the terms of the agreement, shareholders of Paragon Commercial will receive 1.7250 shares of TowneBank common stock for each outstanding share of Paragon common stock.

Deal Updates:

  1. On April 25, 2017, Straight Path Communications (STRP) announced that the Straight Path Board of Directors determined that an unsolicited offer from a multi-national telecommunications company to acquire 100% of the issued and outstanding shares of Straight Path for $104.64 per share, which will be paid in Bidder stock in an all-stock transaction constitutes a “Superior Proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with AT&T (T). Straight Path has notified AT&T of the Straight Path Board’s determination and, pursuant to the AT&T Merger Agreement, AT&T has the option for the next five business days to negotiate a possible amendment of that agreement to match or exceed the Bidder’s offer.
  2. On April 25, 2017, Stillwater Mining Company (SWC) announced that its shareholders adopted the merger agreement with Sibanye Gold Limited at Stillwater’s annual shareholder meeting. In addition, Sibanye announced that its shareholders approved the transaction and the related issuance of shares by Sibanye in a rights offering. Subject to customary closing conditions in accordance with the merger agreement, the merger is expected to close on or about May 4, 2017.
  3. On April 26, 2017, Community Bank System (CBU) and Merchants Bancshares (MBVT) announced that they have received regulatory approvals from the Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency for their proposed merger. Community Bank System and Merchants also announced that they have set Friday, May 12, 2017 as the closing date for the merger.
  4. April 27, 2017: As of April 26, 2017, Eldorado Resorts (ERI), and Isle of Capri Casinos (ISLE) received all consents and approvals from state gaming commissions necessary to consummate their previously announced merger.  Subject to the satisfaction of customary closing conditions, Eldorado and Isle expect that the merger will close on May 1, 2017.
  5. On April 27, 2017, Stonegate Mortgage Corporation (SGM) announced that its stockholders overwhelmingly approved all proposals relating to the pending acquisition of Stonegate Mortgage by Home Point Financial Corporation at a special meeting of Stonegate Mortgage’s stockholders.
  6. On April 28, 2017, Synutra International (SYUT) announced that at its special meeting of stockholders, the Company’s stockholders voted in favor of the proposal to adopt the previously announced agreement and plan of merger. The parties currently expect to complete the merger in May 2017.
  7. On April 29, 2017, China Oceanwide Holdings Group said that it had refiled its application for U.S. approval of its $2.7 billion acquisition of life insurance company Genworth Financial (GNW), in a bid to add more time to the regulatory review.

Closed Deals:

  1. The acquisition of Clayton Williams Energy (CWEI) by Noble Energy (NBL) on April 25, 2017. It took 98 days for this deal to be completed.
  2. The acquisition of Midcoast Energy Partners (MEP) by Enbridge (ENB) on April 27, 2017. It took 91 days for this deal to be completed.
  3. The acquisition of Universal American (UAM) by WellCare Health Plans (WCG) on April 28, 2017. It took 162 days for this deal to be completed.
  4. The acquisition of Energy Transfer Partners (ETP) by Sunoco Logistics Partners (SXL) on April 28, 2017. It took 158 days for this deal to be completed.
  5. The acquisition of ZELTIQ Aesthetics (ZLTQ) by Allergan (AGN) on April 28, 2017.  It took 74 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 $4.00 07/31/2017 62.50% 250.69%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.04 06/30/2017 34.41% 209.30%
LSCC 11/03/2016 Canyon Bridge Capital Partners, Inc. (N/A) $8.30 $6.86 06/30/2017 20.99% 127.70%
WR 05/31/2016 Great Plains Energy Incorporated (GXP) $60.00 $52.03 06/30/2017 15.32% 93.19%
CAB 10/03/2016 Bass Pro Shops (N/A) $61.50 $54.60 09/30/2017 12.64% 30.35%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $116.61 12/31/2017 9.77% 14.61%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $99.27 12/31/2017 8.29% 12.40%
MBVT 10/24/2016 Community Bank System Inc. (CBU) $53.88 $49.80 05/12/2017 8.19% 271.84%
ADGE 11/02/2016 Tecogen Inc. (TGEN) $0.34 $0.3195 06/30/2017 7.69% 46.80%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.75 12/31/2017 7.37% 11.02%

List of all pending deals:

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

Disclaimer: I hold positions in Cabela’s (CAB), Rite Aid (RAD), 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.

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