Merger Arbitrage Mondays – October 9, 2017

Merger activity increased last week with four new deals announced and ten 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 2017 173
Total Number of Deals Not Completed in 2017 10
Total Number of Pending Deals
Cash Deals 39
Stock Deals 20
Stock & Cash Deals 11
Special Conditions 8
Total Number of Pending Deals 78
Total Deal Size $918.14 billion

New Deals:

  1. The acquisition of Dimension Therapeutics (DMTX) by Ultragenyx Pharmaceutical (RARE) for $151 million or $6.00 per share in cash.
  2. The acquisition of Onvia (ONVI) by Project Diamond Intermediate Holdings and Deltek for $70 million or $9.00 per share in cash.
  3. The acquisition of Omega Protein Corporation (OME) by Cooke for $520.88 million or $22.00 per share in cash.
  4. On September 13, 2017, Inotek Pharmaceuticals Corporation (ITEK) announced that they have entered into a definitive merger agreement with Rocket Pharmaceuticals. Subject to shareholder approval, the combined company will retain the name Rocket Pharmaceuticals. Under the terms of the merger agreement, shareholders of Rocket will receive shares of newly issued Inotek common shares in a private placement. Rocket shareholders are expected to own approximately 81% of the combined Company and current Inotek shareholders will own approximately 19% of the combined Company. We have not added this deal to our database as the company will continue to be listed after the merger.

Deal Updates:

  1. On October 2, 2017, Dimension Therapeutics (DMTX) announced that the Dimension Board of Directors  has determined that an unsolicited proposal received from Ultragenyx Pharmaceutical (RAREconstitutes a “Superior Proposal” as defined in Dimension’s existing merger agreement with REGENXBIO (RGNX). The merger agreement between Dimension Therapeutics and REGENXBIO was terminated on October 3, 2017.
  2. On October 2, 2017, The U.S. Department of Justice agreed to clear CenturyLink’s (CTLpending acquisition of Level 3 Communications (LVLT) subject to conditions outlined in a consent decree, including court approval of certain provisions. The acquisition remains subject to regulatory approval from the Federal Communications Commission and the California Public Utilities Commission, along with other customary closing conditions.
  3. October 2, 2017: A.M. Best commented that the Long-Term Issuer Credit Ratings of “bb-” of Genworth Financial (GNW) and Genworth Holdings as well as their existing Long-Term Issue Credit Ratings will remain under review with negative implications following the announcement that Genworth and China Oceanwide Holdings Group  have withdrawn their joint voluntary notice with the Committee on Foreign Investment in the United States (CFIUS).
  4. October 2, 2017: In order to allow for the additional CFIUS review period, Brocade Communication Systems (BRCD), Broadcom Limited (AVGO), Merger Sub and LSI agreed to refrain from exercising their right to terminate the Merger Agreement for failure to close the Merger by the November 1, 2017 end date under the Merger Agreement until after the earlier of (x) the date that is four business days after the 45th day after CFIUS accepts the parties’ revised joint voluntary notice and (y) November 30, 2017. The Merger Agreement remains in full force and effect. Brocade now anticipates the Merger to be completed by November 30, 2017, subject to clearance from CFIUS.
  5. On October 3, 2017, Calpine Corporation (CPN) announced the expiration of the 45-day “go-shop” period pursuant to the terms of the previously announced definitive agreement under which Energy Capital Partners along with a consortium of investors led by Access Industries and Canada Pension Plan Investment Board will acquire Calpine. The acquisition is expected to be completed during the first quarter of calendar year 2018.
  6. On October 4, 2017, Genworth Financial (GNW) and China Oceanwide Holdings Group announced that the North Carolina Department of Insurance has approved the proposed acquisition of control by Oceanwide of Genworth’s North Carolina-domiciled insurance companies, including Genworth Mortgage Insurance Corporation, as contemplated under the merger agreement entered into by Genworth and Oceanwide.
  7. On October 5, 2017, Sparton Corporation (SPA) announced that at a special meeting of Sparton shareholders, the shareholders approved the adoption of the previously announced Agreement and Plan of Merger by and among Sparton, Ultra Electronics Holdings and Ultra Electronics Aneira.
  8. On October 6, 2017, PacWest Bancorp (PACW) and CU Bancorp (CUNB) announced that all required regulatory approvals for the mergers of CUB into PacWest and California United Bank into Pacific Western Bank have been received.  Subject to the satisfaction of the remaining closing conditions, the mergers are expected to be consummated at the close of business on October 20, 2017.

Closed Deals:

  1. The acquisition of Angie’s List (ANGI) by IAC/InterActiveCorp (IAC) on September 29, 2017. It took 150 days for this deal to be completed.
  2. The acquisition of ASB Bancorp (ASBB) by First Bancorp (FBNC) on October 1, 2017. It took 153 days for this deal to be completed.
  3. The acquisition of Neff Corporation (NEFF) by United Rentals (URI) on October 2, 2017. It took 47 days for this deal to be completed.
  4. The acquisition of First Potomac Realty Trust (FPO) by Government Properties Income Trust (GOV) on October 2, 2017. It took 96 days for this deal to be completed.
  5. The acquisition of Astoria Financial Corporation (AF) by Sterling Bancorp (STL) on October 2, 2017. It took 209 days for this deal to be completed.
  6. The acquisition of Kite Pharma (KITE) by Gilead Sciences (GILD) on October 3, 2017. It took 36 days for this deal to be completed.
  7. The acquisition of Alere (ALR) by Abbott Laboratories (ABT) on October 3, 2017. It took 610 days for this deal to be completed.
  8. The acquisition of DigitalGlobe (DGI) by MacDonald, Dettwiler and Associates (MDA.TO) on October 5, 2017. It took 223 days for this deal to be completed.
  9. The acquisition of Caesars Acquisition Company (CACQ) by Caesars Entertainment Corporation (CZR) on October 6, 2017. It took 1,019 days for this deal to be completed.
  10. The acquisition of Atwood Oceanics (ATW) by Ensco (ESV) on October 7, 2017. It took 130 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 $3.63 12/31/2017 49.59% 218.06%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $15.94 12/31/2017 12.92% 56.83%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $27.68 06/30/2018 8.38% 11.59%
HUN 05/22/2017 CLARIANT N (CLN.VX) $29.67 $27.55 12/31/2017 7.71% 33.91%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $119.73 01/31/2018 6.91% 22.12%
CBMX 07/31/2017 Invitae Corporation (NVTA) $8.33 $7.80 12/31/2017 6.79% 29.88%
COL 09/04/2017 United Technologies Corp. (UTX) $140.00 $132.62 09/30/2018 5.56% 5.71%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.85 12/31/2017 5.15% 22.67%
SNI 07/31/2017 Discovery Communications, Inc. (DISCK) $90.00 $86.02 03/31/2018 4.63% 9.76%
XCRA 04/10/2017 an affiliate of Sino IC Capital and Unic Capital Management (N/A) $10.25 $9.82 12/31/2017 4.38% 19.26%

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: or follow me on Twitter@asifsuria

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