Merger Arbitrage Mondays – December 4, 2017

Merger activity increased last week with six new deals announced and three 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 205
Total Number of Deals Not Completed in 2017 11
Total Number of Pending Deals
Cash Deals 39
Stock Deals 19
Stock & Cash Deals 8
Collars 1
Special Conditions 8
Total Number of Pending Deals 74
Total Deal Size $1043.04 billion

New Deals:

  1. The acquisition of Barracuda Networks (CUDA) by Thoma Bravo for $1.29 billion or $27.55 per share in cash.
  2. The acquisition of MGC Diagnostics Corporation (MGCD) by affiliates of Altus Capital Partners for $52.63 million or $11.03 per share in cash.
  3. The acquisition of Bazaarvoice (BV) by entities affiliated with the global investment firm, Marlin Equity Partners for $398.69 million or $5.50 per share in cash.
  4. The acquisition of Buffalo Wild Wings (BWLD) by Arby’s Restaurant Group for $2.9 billion or $157 per share in cash. We added this “potential” deal to our Deals in the Works tool on November 13, 2017.
  5. The acquisition of Aetna (AET) by CVS Health (CVS) for $77 billion or $207 per share in a cash plus stock deal. We added this “potential” deal to our Deals in the Works tool on November 30, 2017.
  6. The acquisition of General Cable Corporation (BGC) by Prysmian Group for $3 billion or $30.00 per share in cash.

Deal Updates:

  1. On November 28, 2017, AT&T (T) and Time Warner (TWX) argued that their proposed $85.4 billion  merger was “pro-competitive” and “pro-consumer”, as they sought to refute U.S. Justice Department allegations that the deal breaks antitrust law. The two companies have reportedly extended the deadline of their proposed merger to Apr 22, 2018. The duration of the deal was extended in order to gain the remaining regulatory approvals required to close the merger.
  2. On November 29, 2017, Orbital ATK (OA) announced that its stockholders overwhelmingly approved the merger agreement providing for the proposed acquisition of Orbital ATK by Northrop Grumman Corporation (NOC).
  3. On November 29, 2017, Genworth Financial (GNW) and China Oceanwide Holdings Group announced that they have agreed to a second waiver and agreement of each party’s right to terminate the previously announced merger agreement. The second waiver and agreement extends the previous deadline of Nov. 30, 2017, to April 1, 2018, and allows additional time for regulatory reviews of the transaction.
  4. On December 1, 2017, Bayer and Monsanto (MON) announced that the Committee on Foreign Investment in the United States (“CFIUS”) has completed its review of the proposed merger, and has concluded that there are no unresolved national security concerns with respect to the transaction.
  5. On December 1, 2017, At a special Meeting of Shareholders, Tesco (TESOshareholders approved, by a large majority, the Arrangement pursuant to which Nabors (NBR) will acquire all of Tesco’s common shares in a stock-for-stock transaction.

Closed Deals:

  1. The acquisition of Fidelity & Guaranty Life (FGL) by CF Corporation (CFCO) on November 30, 2017. It took 190 days for this deal to be completed.
  2. The acquisition of Park Sterling Corporation (PSTB) by South State Corporation (SSB) on December 1, 2017. It took 219 days for this deal to be completed.
  3. The acquisition of Capital Bank Financial (CBF) by First Horizon National (FHN) on December 1, 2017. It took 211 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 $3.41 04/01/2018 59.24% 183.23%
BGC 12/04/2017 Prysmian Group (N/A) $30.00 $21.80 09/30/2018 37.61% 45.76%
BCEI 11/15/2017 SandRidge Energy (SD) $36.00 $27.99 03/31/2018 28.62% 89.28%
MGI 01/26/2017 Ant Financial Services Group (N/A) $18.00 $14.17 12/31/2017 27.03% 365.39%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $25.35 06/30/2018 18.34% 32.19%
TWX 10/22/2016 AT&T, Inc. (T) $106.20 $91.30 04/22/2018 16.32% 42.86%
SXE 11/01/2017 American Midstream Partners, LP (AMID) $1.95 $1.70 06/30/2018 14.82% 26.01%
AET 12/03/2017 CVS Health (CVS) $207.94 $181.31 12/31/2018 14.69% 13.67%
YUME 09/05/2017 RhythmOne plc (RTHM.L) $4.11 $3.61 03/31/2018 13.93% 43.44%
GLBL 03/07/2017 Brookfield Asset Management Inc. (BAM) $5.10 $4.65 12/31/2017 9.68% 130.82%

List of all pending deals:

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

Disclaimer: I hold positions in Aetna (AET), TerraForm Global (GLBL), Fortress Investment Group (FIG), Southcross Energy Partners (SXE) and NewStar Financial (NEWS). 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

3 Comments

  1. GeorgeCiardi
    December 4, 2017 at 3:23 pm

    Shouldn’t the SVA target price be $8 now?

    • Asif Suria
      December 4, 2017 at 5:28 pm

      Did they accept the higher $8 offer from Sinobioway? I have not seen anything confirming that they accepted that offer.

  2. GeorgeCiardi
    December 4, 2017 at 6:30 pm

    I wasn’t 100% if they accepted the offer either, just noting that the offer was made and it is trading really close to that offer price. I guess proper reporting would be to wait for the official word they accepted the Offer.

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