Merger Arbitrage Mondays – September 25, 2017

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

Deal Statistics:

Total Number of Deals Closed in 2017 155
Total Number of Deals Not Completed in 2017 9
Total Number of Pending Deals
Cash Deals 46
Stock Deals 24
Stock & Cash Deals 12
Special Conditions 10
Total Number of Pending Deals 92
Total Deal Size $916.91 billion

New Deals:

  1. The acquisition of Orbital ATK (OA) by Northrop Grumman Corporation (NOC) for $9.2 billion or $134.50 per share in cash.
  2. The acquisition of Silver Spring Networks (SSNI) by Itron (ITRI) for $712 million or $16.25 per share in cash.
  3. The acquisition of Bob Evans Farms (BOBE) by Post Holdings (POST) for $1.53 billion or $77 per share in cash.
  4. The acquisition of Calgon Carbon Corporation (CCC) by Kuraray for $1.3 billion or $21.50 per share in cash.

Deal Updates:

  1. On September 18, 2017, PAREXEL International Corporation (PRXL) announced that its shareholders approved the previously announced proposed acquisition of the Company by certain investment funds affiliated with Pamplona Capital Management. The closing of the transaction is anticipated to occur on or about Friday, September 29, 2017.
  2. On September 18, 2017, Ultragenyx Pharmaceutical (RARE) announced that it has made a proposal to acquire all of the outstanding shares of common stock of Dimension Therapeutics (DMTX) for $5.50 per share, or approximately $138 million, in cash. On September 19, 2017, Dimension Therapeutics announced that its Board of Directors has determined in good faith, after consultation with its financial advisor and outside legal counsel, that the non-binding, unsolicited proposal from Ultragenyx Pharmaceutical to acquire Dimension could reasonably be expected to lead to a “Superior Proposal” as defined in Dimension’s merger agreement with Regenxbio (RGNX).
  3. On September 18, 2017, Mitel Networks Corporation (MITL) announced that the tender offer made by Mitel’s indirect, wholly-owned subsidiary to acquire all of the issued and outstanding shares of common stock of ShoreTel (SHORhas been extended until  September 22, 2017. The Offer was previously scheduled to expire on September 18, 2017.
  4. On September 18, 2017, Abbott (ABT) announced that it is extending its previously announced tender offer to purchase for cash all outstanding shares of Series B Convertible Perpetual Preferred Stock of Alere (ALR) at a price of $402.00 per share of Preferred Stock, plus accrued but unpaid dividends.  The Offer is being extended to allow additional time for the consummation of the Merger, which is a condition to the completion of the Offer.  The Offer was previously scheduled to expire on September 15, 2017 and will now expire on September 29, 2017.
  5. On September 19, 2017, Bayer said it would likely take until early next year to complete the planned $66 billion takeover of Monsanto (MON), which it had previously expected to be under wraps by the end of 2017. Bayer also said that it was unable to propose the sale of any digital farming assets to allay EU concerns about its planned $66 billion takeover of Monsanto.
  6. September 19, 2017: China’s Oceanwide Holdings is aiming to close its $2.7 billion acquisition of U.S. insurer Genworth Financial (GNW) by end of this year after securing approval from a U.S. government panel, said an executive of the Chinese firm.
  7. On September 19, 2017, Dominion Diamond Corporation (DDC) announced that at the special meeting of the shareholders of the Company, Shareholders overwhelmingly approved the previously-announced plan of arrangement pursuant to which Northwest Acquisitions has agreed to acquire all of the issued and outstanding common shares of the Company.
  8. On September 19, 2017, ASB Bancorp (ASBB) shareholders approved the merger with First Bancorp (FBNC). The merger is expected to close on October 1, 2017.
  9. On September 19, 2017, White Tale Holdings, the Cayman Island-based vehicle created by hedge funds Corvex and 40 North increased its stake in Clariant (CLN.VX) above 15 percent in order to maintain its opposition to the merger of equals between Huntsman (HUN) and Clariant. In response, Huntsman issued a statement stating that White Tale’s attacks on Huntsman are false.
  10. On September 22, 2017, Dominion Diamond Corporation (DDC) announced that the Ontario Superior Court of Justice has issued a final order approving its previously-announced plan of arrangement pursuant to which Northwest Acquisitions has agreed to acquire all of the issued and outstanding common shares of the Company.
  11. On September 22, 2017, Sevcon (SEV) announced that its stockholders overwhelmingly approved the proposed acquisition of Sevcon by BorgWarner at the Special Meeting of Stockholders. Subject to satisfaction or waiver of all other conditions, the closing of the acquisition is expected to occur on or about September 27, 2017.
  12. On September 22, 2017, Qualcomm Incorporated (QCOM) announced that Qualcomm River Holdings, an indirect wholly owned subsidiary of Qualcomm, has extended the offering period of its previously announced cash tender offer to purchase all of the outstanding common shares of NXP Semiconductors (NXPI). The tender offer is now scheduled to expire on October 20, 2017, unless extended or earlier terminated, in either case pursuant to the terms of the Purchase Agreement. The transaction is expected to close by the end of calendar 2017.

Closed Deals:

  1. The acquisition of ClubCorp Holdings (MYCC) by certain Investment Funds Affiliated with Apollo Global Management on September 18, 2017. It took 70 days for this deal to be completed.
  2. The acquisition of Monogram Residential Trust (MORE) by Greystar Growth and Income Fund on September 19, 2017. It took 76 days for this deal to be completed.
  3. The acquisition of Delta Natural Gas Company (DGAS) by Peoples Natural Gas on September 20, 2017. It took 211 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.82 12/31/2017 42.15% 158.59%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $16.13 12/31/2017 11.59% 43.62%
CBMX 07/31/2017 Invitae Corporation (NVTA) $8.33 $7.50 12/31/2017 11.07% 41.64%
ASBB 05/01/2017 First Bancorp (FBNC) $47.65 $43.20 10/01/2017 10.30% 626.58%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $5.15 $4.76 03/31/2018 8.24% 16.09%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $27.77 06/30/2018 8.03% 10.54%
COL 09/04/2017 United Technologies Corp. (UTX) $140.00 $130.48 09/30/2018 7.30% 7.20%
HUN 05/22/2017 CLARIANT N (CLN.VX) $29.29 $27.32 12/31/2017 7.20% 27.11%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $119.77 01/31/2018 6.87% 19.59%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.775 12/31/2017 6.81% 25.61%

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.

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