Merger Arbitrage Mondays – December 25, 2017

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

Deal Statistics:

Total Number of Deals Closed in 2017 215
Total Number of Deals Not Completed in 2017 11
Total Number of Pending Deals
Cash Deals 43
Stock Deals 19
Stock & Cash Deals 9
Collars 1
Special Conditions 7
Total Number of Pending Deals 78
Total Deal Size $1141.08702 billion

New Deals:

  1. The acquisition of Amplify Snack Brands (BETR) by The Hershey Company (HSY) for $1.6 billion or $12.00 per share in cash.
  2. The acquisition of Pinnacle Entertainment (PNK) by Penn National Gaming (PENN) for $5.85 billion. Under the terms of the agreement, Pinnacle shareholders will receive $20.00 in cash and 0.42 shares of Penn National common stock for each Pinnacle share. We added this “potential” deal to our Deals in the Works tool on October 5, 2017.
  3. The acquisition of Snyder’s-Lance (LNCE) by Campbell Soup Company (CPB) for $5.8 billion or $50.00 per share in cash. We added this “potential” deal to our Deals in the Works tool on December 14, 2017.
  4. The acquisition of Chicago Bridge & Iron Company (CBI) by McDermott International (MDR) for $3.73 billion. Under the terms of the agreement, CB&I shareholders will be entitled to receive 2.47221 shares of McDermott common stock for each share of CB&I common stock owned (or 0.82407 shares if McDermott effects a planned three-to-one reverse stock split prior to closing), subject to any withholding taxes. Shareholders of neither company were pleased by this announcement as both companies saw their stock price drop after the merger was announced.
  5. The acquisition of Kindred Healthcare (KND) by TPG Capital, Welsh, Carson, Anderson & Stowe and Humana (HUM) for $4.1 billion or $9.00 per share in cash. We added this “potential” deal to our Deals in the Works tool on April 20, 2017.
  6. The acquisition of Gener8 Maritime (GNRT) by Euronav (EURN) for $2.08 billion in an all stock deal. Under the terms of the agreement Gener8 shareholders will receive 0.7272 shares of Euronav shares for each share of Gener8. We added this “potential” deal to our Deals in the Works tool on May 31, 2017.
  7. The acquisition of Ignyta (RXDX) by Roche Holding AG (RHHBY) for $1.7 billion or $27.00 per share in cash.

Deal Updates:

  1. On December 18, 2017, The Ruby Tuesday (RT) Board of Directors rejected a highly-conditional and not fully-financed acquisition proposal from The Boaz Group.
  2. On December 18, 2017, Arc Logistics Partners (ARCX) announced that at the special meeting of the Partnership’s common unitholders, the Partnership’s unitholders voted to approve the Purchase Agreement and Plan of Mergerwith Zenith. Subject to satisfaction of the remaining closing conditions, the parties currently expect to close the Proposed Transaction on or about December 21, 2017.
  3. On December 21, 2017, Xcerra (XCRA) said that it would resubmit its deal to be acquired by a Chinese state-backed semiconductor investment fund to give U.S. regulators more time to review the transaction for national security concerns.
  4. December 21, 2017: According to Reuters, the judge overseeing the Justice Department’s bid to stop AT&T (T) from buying Time Warner (TWX) said that he would deny a request to tighten protections on confidential data.
  5. On December 22, 2017, BD (Becton, Dickinson and Company) (BDXissued a statement regarding the clearance by the U.S. Federal Trade Commission (FTC) for BD to acquire C. R. Bard (BCR).
  6. On December 21, 2017, AT&T (T), Time Warner (TWX), Corporate Sub and Merger LLC entered into a limited waiver and agreement, pursuant to which AT&T and Time Warner each waived, until June 21, 2018, its right to terminate the Merger Agreement due to a failure to complete their merger contemplated thereunder by April 22, 2018.

Closed Deals:

  1. The acquisition of Omega Protein Corporation (OME) by Cooke on December 19, 2017. It took 74 days for this deal to be completed.
  2. The acquisition of Planet Payment (PLPM) by Fintrax Group on December 20, 2017. It took 55 days for this deal to be completed.
  3. The acquisition of Ruby Tuesday (RT) by NRD Capital on December 21, 2017. It took 66 days for this deal to be completed.
  4. The acquisition of NewStar Financial (NEWS) by First Eagle Investment Management on December 22, 2017. It took 66 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 $3.20 04/01/2018 69.69% 262.23%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $13.20 12/31/2017 36.36% 2212.12%
SXE 11/01/2017 American Midstream Partners, LP (AMID) $2.14 $1.72 06/30/2018 24.19% 47.21%
BCEI 11/15/2017 SandRidge Energy (SD) $36.00 $30.06 03/31/2018 19.76% 75.13%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $25.23 06/30/2018 18.91% 36.90%
TWX 10/22/2016 AT&T, Inc. (T) $109.71 $92.38 06/21/2018 18.76% 38.46%
AET 12/03/2017 CVS Health (CVS) $206.50 $179.96 12/31/2018 14.75% 14.51%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $4.07 $3.63 03/31/2018 12.18% 46.31%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $116.28 03/31/2018 10.08% 38.32%
ROSG 12/15/2017 Genoptix, Inc. (N/A) $0.60 $0.5500 03/31/2018 9.09% 34.56%

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), Southcross Energy Partners (SXE), NewStar Financial (NEWS), Sparton Corporation (SPA) and Rosetta Genomics (ROSG). 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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