Merger Arbitrage Mondays – September 18, 2017

Merger activity decreased last week with one new deal announced and eight 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 152
Total Number of Deals Not Completed in 2017 9
Total Number of Pending Deals
Cash Deals 45
Stock Deals 24
Stock & Cash Deals 12
Special Conditions 10
Total Number of Pending Deals 91
Total Deal Size $904.17 billion

New Deals:

  1. The acquisition of Richmont Mines (RIC) by Alamos Gold (AGI) for $455.53 million in an all stock deal. Under the terms of the Agreement, all of the Richmont issued and outstanding common shares will be exchanged on the basis of 1.385 Alamos common shares for each Richmont common share.

Deal Updates:

  1. On September 11, 2017, Terraform Global (GLBL) filed a proxy statement inviting shareholders to a special meeting. The stock dropped immediately following this filing and the spread on the deal increased from nearly 0% to 6.81%. The spread was even higher at the end of the week. An investor who read the filing tipped me off to the presence of a holdback clause in the filing related to securities litigation if the litigation is still pending when the merger closes. The holdback will be in the form of a contingent value right (CVR). I often invest in deals that have a CVR associated with them and wrote about one of them in the post Tobira Therapeutics Hits The Jackpot and Provides a Nice Kicker last September.
  2. On September 12, 2017, NeuroDerm (NDRM) announced that at NeuroDerm’s extraordinary general meeting of shareholders, NeuroDerm shareholders voted to approve the previously announced acquisition by Mitsubishi Tanabe Pharma Corporation. The Company expects the merger to be completed in mid-October 2017.
  3. On September 12, 2017, CenturyLink (CTL) announced it is updating the closing timeframe for its acquisition of Level 3 Communications (LVLT). Based on the proposed decision filed by the California Administrative Law Judge last Friday recognizing that the combination of CenturyLink and Level 3 is in the public interest and recommending the California Public Utilities Commission approve the transaction at its Oct. 12 meeting, CenturyLink now anticipates the Level 3 transaction to close in mid-to-late October 2017.
  4. On September 13, 2017, Lattice Semiconductor Corporation (LSCC) announced the termination of the acquisition by Canyon Bridge Capital Partners of Lattice Semiconductor following an order from the President of the United States.
  5. On September 13, 2017, Bankrate (RATE) announced that Bankrate stockholders voted at a special meeting of stockholders to adopt the Agreement and Plan of Merger providing for the merger of a wholly owned subsidiary of Red Ventures Holdco, with and into Bankrate.
  6. On September 14, 2017, Hedge fund D.E. Shaw & Co urged (EQT), which is buying Rice Energy (RICE) in a $6.7 billion deal, to split into two parts after the deal and to speed up efforts to boost the company’s stock price.
  7. On September 14, 2017, Monogram Residential Trust (MORE) announced that Monogram stockholders voted to approve the acquisition of Monogram by Greystar Growth and Income Fund.
  8. On September 14, 2017, Hydro One Limited and Avista Corporation (AVA) filed applications requesting regulatory approval of the proposed merger of the two companies. The applications have been filed with state utility commissions in Washington, Idaho, Oregon, Montana, and Alaska, as well as with the Federal Energy Regulatory Commission (FERC), requesting approval of the transaction on or before August 14, 2018.
  9. On September 15, 2017, ClubCorp (MYCC) announced that its stockholders approved the acquisition of ClubCorp by an affiliate of certain investment funds managed by affiliates of Apollo Global Management. Subject to the satisfaction of the remaining customary closing conditions, ClubCorp expects the transaction to close on or about September 18, 2017.
  10. September 15, 2017: Ant Financial is planning to resubmit its application for U.S. review of its deal to buy MoneyGram International (MGI).

Closed Deals:

  1. The acquisition of Staples (SPLS) by Sycamore Partners on September 12, 2017. It took 76 days for this deal to be completed.
  2. The acquisition of VCA (WOOF) by Mars, Incorporated on September 12, 2017. It took 248 days for this deal to be completed.
  3. The acquisition of CDI Corp (CDI) by affiliates of AE Industrial Partners on September 13, 2017. It took 44 days for this deal to be completed.
  4. The acquisition of West Marine (WMAR) by a wholly owned affiliate of Monomoy Capital Partners on September 14, 2017. It took 77 days for this deal to be completed.
  5. The acquisition of DuPont Fabros Technology (DFT) by Digital Realty Trust (DLR) on September 14, 2017. It took 97 days for this deal to be completed.
  6. The acquisition of Guidance Software (GUID) by Open Text Corporation (OTEX) on September 14, 2017.
  7. The acquisition of VTTI Energy Partners (VTTI) by VTTI B.V. on September 15, 2017. It took 130 days for this deal to be completed.
  8. The acquisition of WebMD Health (WBMD) by Internet Brands on September 15, 2017. It took 53 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
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.00 11/30/2017 35.75% 178.75%
CBMX 07/31/2017 Invitae Corporation (NVTA) $8.33 $7.25 12/31/2017 14.90% 52.28%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $15.92 12/31/2017 13.07% 45.85%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $118.27 12/31/2017 8.23% 28.87%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $27.79 06/30/2018 7.95% 10.18%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $5.03 $4.67 03/31/2018 7.78% 14.65%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.75 12/31/2017 7.37% 25.86%
COL 09/04/2017 United Technologies Corp. (UTX) $140.00 $131.09 09/30/2018 6.80% 6.58%
HCOM 07/10/2017 Cincinnati Bell (CBB) $31.23 $29.38 12/31/2018 6.31% 4.91%
HUN 05/22/2017 CLARIANT N (CLN.VX) $29.54 $27.82 12/31/2017 6.18% 21.70%

List of all pending deals:

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

Disclaimer: I hold positions in Fortress Investment Group (FIG), MaxPoint Interactive (MXPT) and CombiMatrix (CBMX). 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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