Merger Arbitrage Mondays – June 26, 2017

Merger activity increased last week with five 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 four new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2017 100
Total Number of Deals Not Completed in 2017 4
Total Number of Pending Deals
Cash Deals 56
Stock Deals 21
Stock & Cash Deals 12
Special Conditions 8
Total Number of Pending Deals 97
Total Deal Size $821.28 billion

New Deals:

  1. The acquisition of Rice Energy (RICE) by EQT Corporation (EQT) for $8.2 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Rice Energy will receive 0.37 shares of EQT common stock and $5.30 in cash per share of Rice common stock.
  2. The acquisition of Novadaq Technologies (NVDQ) by Stryker Corporation (SYK) for $701 million or $11.75 per share in cash.
  3. The acquisition of PAREXEL International Corporation (PRXL) by Pamplona Capital Management for $5 billion or $88.10 per share in cash.
  4. The acquisition of ARI Network Services (ARIS) by an affiliate of True Wind Capital Management for $140 million or $7.10 per share in cash.
  5. The acquisition of EnerNOC (ENOC) by Enel Green Power North America for $300 million or $7.67 per share in cash.

Deal Updates:

  1. On June 23, 2017, Caesars Entertainment Corporation (CZR) and Caesars Acquisition Company (CACQ) announced that the Securities and Exchange Commission has declared effective the Registration Statement on Form S-4 previously filed by Caesars Entertainment on March 13, 2017, and amended on June 5, 2017 and June 20, 2017. Caesars Entertainment and Caesars Acquisition also announced that they have individually scheduled special meetings of Caesars Entertainment and Caesars Acquisition stockholders on July 25, 2017 in connection with the pending Merger. We are extending the closing date for this deal to July 31, 2017.
  2. On June 23, 2017, Norsat International (NSAT) announced that at the adjourned 2017 annual general and special meeting of securityholders of Norsat held on June 22, 2017, securityholders of Norsat voted in favour of a special resolution to approve the plan of arrangement, pursuant to which Hytera Communications will acquire all the issued and outstanding shares of Norsat.
  3. On June 23, 2017, Forestar Group (FOR) announced that it had received a revised binding proposal from D.R. Horton to acquire 75% of the outstanding shares of Forestar common stock for $17.75 per share in cash and that its board of directors has unanimously determined that the revised proposal constitutes a “Superior Proposal,” as defined in Forestar’s amended merger agreement with Starwood Capital Group. Forestar also announced that it has also entered into a second amendment to its merger agreement with Starwood to increase the merger consideration to $16.00 per share in cash. In accordance with the amended merger agreement with Starwood, Forestar will discuss and negotiate with Starwood in good faith until the end of the business day on June 28, 2017 such adjustments in the terms and conditions of the merger agreement with Starwood as would permit the Forestar board of directors not to terminate the amended merger agreement with Starwood.
  4. On June 23, 2017, Coach (COH) announced that it has extended the expiration of its previously announced tender offer to purchase all of the outstanding shares of common stock, of Kate Spade & Company (KATE) until July 10, 2017, unless further extended or earlier terminated.
  5. On June 24, 2017, The National Farmers Union urged the Federal Trade Commission to oppose the proposed China National Chemical Corp’s acquisition of Syngenta (SYT).

Closed Deals:

  1. The acquisition of Exeter Resource Corporation (XRA) by Goldcorp (GG) on June 20, 2017. It took 84 days for this deal to be completed.
  2. The acquisition of TRC Companies (TRR) by New Mountain Capital on June 21, 2017. It took 81 days for this deal to be completed.
  3. The acquisition of MOCON (MOCO) by AMETEK (AME) on June 22, 2017. It took 66 days for this deal to be completed.
  4. The acquisition of PrivateBancorp (PVTB) by Canadian Imperial Bank of Commerce (CM) on June 23, 2017. It took 359 days for this deal to be completed.
  5. The acquisition of Eastern Virginia Bankshares (EVBS) by Southern National Bancorp of Virginia (SONA) on June 23, 2017. It took 192 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
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $6.50 $3.1100 07/31/2017 109.00% 1136.75%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.70 06/30/2017 46.76% 4266.55%
DEST 12/20/2016 Orchestra-Premaman S.A. (KAZI.PA) $5.86 $4.42 10/31/2017 32.48% 93.35%
LSCC 11/03/2016 Canyon Bridge Capital Partners, Inc. (N/A) $8.30 $6.65 06/30/2017 24.81% 2264.10%
WR 05/31/2016 Great Plains Energy Incorporated (GXP) $60.00 $53.1100 06/30/2017 12.97% 1183.79%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $117.02 12/31/2017 9.38% 18.22%
TWX 10/22/2016 AT&T, Inc. (T) $107.50 $99.70 12/31/2017 7.82% 15.19%
CAB 10/03/2016 Bass Pro Shops (N/A) $61.50 $57.3900 09/30/2017 7.16% 27.23%
SGBK 03/27/2017 Home Bancshares, Inc. (HOMB) $49.00 $45.97 12/31/2017 6.59% 12.80%
WGL 01/25/2017 AltaGas Ltd. (N/A) $88.25 $83.45 06/30/2018 5.75% 5.69%

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 Whole Foods (WFM), Cabela’s (CAB), Rite Aid (RAD) and Fortress Investment Group (FIG). 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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