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Merger Arbitrage Mondays – October 30, 2017

  • October 30, 2017

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

Deal Statistics:

Total Number of Deals Closed in 2017184
Total Number of Deals Not Completed in 201711
Total Number of Pending Deals
Cash Deals40
Stock Deals18
Stock & Cash Deals8
Special Conditions9
Total Number of Pending Deals75
Total Deal Size$918.46 billion

New Deals:

  1. The acquisition of BroadSoft (BSFT) by Cisco (CSCO) for $1.9 billion or $55.00 per share in cash.
  2. The acquisition of Deltic Timber Corporation (DEL) by Potlatch Corporation (PCH) for $1.18 billion in an all stock deal. Under the terms of the agreement, Deltic stockholders will receive 1.80 common shares of Potlatch stock for each common share of Deltic that they own.
  3. The acquisition of Exactech (EXAC) by TPG Capital for $625 million or $42.00 per share in cash.
  4. The acquisition of Inventure Foods (SNAK) by Utz Quality Foods for $165 million or $4.00 per share in cash.
  5. The acquisition of Gigamon (GIMO) by Elliott Management for $1.6 billion or $38.50 per share in cash.
  6. The acquisition of Planet Payment (PLPM) by Fintrax Group for $184.93 million or $4.50 per share in cash.
  7. The acquisition of Enzymotec (ENZY) by Frutarom for $156.88 million or $11.90 per share in cash.

Deal Updates:

  1. On October 23, 2017, Brazil’s antitrust authority, the Conselho Administrativo de Defesa Econômica (CADE) approved AT&T’s (T) pending acquisition of Time Warner (TWX). With CADE’s approval, AT&T and Time Warner have received all required merger approvals outside of the United States.  In the United States, the transaction remains under review by the U.S. Department of Justice.  AT&T expects the transaction to close by the end of 2017.
  2. On October 24, 2017, Bank Mutual Corporation (BKMU) announced that its shareholders voted to approve the previously announced merger agreement providing for the merger of Bank Mutual with Associated Banc-Corp (ASB). The merger transaction remains subject to regulatory approvals and customary closing conditions; the companies expect the transaction will close in early 2018.
  3. On October 26, 2017, Bayer cut the value of its takeover of Monsanto (MON) by $2.5 billion (£1.89 billion), which combined with windfalls from asset sales means it may have to raise less than expected from shareholders. The Monsanto deal is now valued at $63.5 billion including debt, down from an initial $66 billion, because the U.S. seeds giant had lowered its financial liabilities.
  4. On October 26, 2017, seven groups from across the political spectrum joined together to urge the Justice Department to reject AT&T’s (T) $85B bid for Time Warner (TWX), objecting to the power over television that the combined company would have.
  5. On October 26, 2017, At separate special meetings, shareholders of both Union Bankshares Corporation (UBSH) and Xenith Bankshares (XBKSapproved the merger of Xenith with and into Union. All regulatory approvals have been received and the merger is expected to close during early January 2018.
  6. On October 26, 2017, Ultragenyx Pharmaceutical (RARE) and Dimension Therapeutics (DMTX)  announced that the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to Ultragenyx’s proposed acquisition of Dimension expired on October 25, 2017. The tender offer is scheduled to expire on November 7, 2017.
  7. On October 27, 2017, Huntsman Corporation (HUN) and Clariant (CLN.VX) today jointly announced that they have terminated their proposed merger of equals by mutual agreement after facing pressure from U.S. activist investors who wanted to block the deal. The decision was unanimously approved by the Boards of Directors of Huntsman and Clariant.
  8. On October 27, 2017, NxStage Medical (NXTM) announced that at a special meeting of stockholders, the Company’s stockholders voted to adopt the previously announced Agreement and Plan of Merger with Fresenius Medical Care Holdings.
  9. On October 27, 2017, Carolina Financial Corporation (CARO) and First South Bancorp (FSBK) announced that they have received all required regulatory approvals and the approval of each company’s stockholders to proceed with the merger of First South with and into Carolina Financial. The closing of the mergers of Carolina Financial and First South and their subsidiary banks are expected to occur on November 1, 2017.
  10. On October 27, 2017, Dominion Diamond Corporation (DDC) announced that The Washington Companies has received Investment Canada Act approval in connection with 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. The Arrangement has previously received shareholder approval, court approval, and clearance under the Competition Act (Canada). No further regulatory or shareholder approvals are required in connection with the Arrangement. The Arrangement is expected to be completed on or about November 1, 2017, subject to the satisfaction or waiver of the remaining conditions of closing.

Closed Deals:

  1. The acquisition of NeuroDerm (NDRM) by Mitsubishi Tanabe Pharma Corporation on October 18, 2017. It took 86 days for this deal to be completed.
  2. The acquisition of CU Bancorp (CUNB) by PacWest Bancorp (PACW) on October 23, 2017. It took 200 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
GNW10/23/2016China Oceanwide Holdings Group Co., Ltd. (N/A)$5.43$3.4012/31/201759.71%351.49%
MGI01/26/2017Ant Financial Services Group (N/A)$18.00$15.8012/31/201713.92%81.97%
NXTM08/07/2017Fresenius Medical Care (N/A)$30.00$27.0506/30/201810.91%16.38%
BRCD11/02/2016Broadcom Limited (AVGO)$12.75$11.6412/15/20179.54%75.67%
CBMX07/31/2017Invitae Corporation (NVTA)$8.33$7.6512/31/20178.89%52.33%
TWX10/22/2016AT&T, Inc. (T)$107.50$98.7912/31/20178.82%51.90%
SNI07/31/2017Discovery Communications, Inc. (DISCK)$90.00$83.4103/31/20187.90%18.97%
YUME09/05/2017RhythmOne plc (RTHM.L)$4.35$4.0603/31/20187.05%16.93%
ENZY10/29/2017Frutarom (N/A)$11.90$11.2503/31/20185.78%13.87%
MON09/14/2016Bayer AG (BAYRY)$128.00$121.5201/31/20185.33%20.93%

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 Fortress Investment Group (FIG), CombiMatrix (CBMX) and Brocade Communication Systems (BRCD). 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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