Merger Arbitrage Mondays – January 15, 2018

Merger activity increased last week with three new deals announced and two pending deal 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 2018 3
Total Number of Deals Not Completed in 2018 1
Total Number of Pending Deals
Cash Deals 38
Stock Deals 17
Stock & Cash Deals 8
Collars 1
Special Conditions 6
Total Number of Pending Deals 69
Total Deal Size $460.04 billion

New Deals:

  1. The acquisition of TiGenix NV (TIG) by Takeda Pharmaceutical Company Limited for $520.25 million. Under the terms of the agreement, Takeda intends to acquire 100% of the securities with voting rights or giving access to voting rights of TiGenix not already owned by Takeda or affiliates at a price of EUR 1.78 per share in cash and an equivalent price in cash per American Depository Share, warrant and convertible bond. We are using the current Euro to Dollar Exchange rate of 1.2. Each American Depository Share represents 20 ordinary shares of TiGenix. The spread on the deal is subject to change based on the currency exchange rates.
  2. The acquisition of DST Systems (DST) by SS&C Technologies Holdings (SSNC) for $5.4 billion or $84.00 per share in cash.
  3. The acquisition of ZAIS Group Holdings (ZAIS) by Z Acquisition LLC for $42.2 million or $4.10 per share in cash.

Deal Updates:

  1. On January 8, 2018, Delek US Holdings (DK) and Alon USA Partners (ALDW) announced that Delek US’ Registration Statement on Form S-4 has been declared effective by the Securities and Exchange Commission and that Alon Partners has filed a definitive consent statement with the SEC with respect to the proposed acquisition. The consent process will conclude on February 5, 2018. Delek US expects the closing of the acquisition to occur on February 7, 2018, subject to the satisfaction or waiver of the remaining customary conditions to closing.
  2. On January 11, 2018, Meredith Corporation (MDP) announced that it has extended its previously announced tender offer to purchase all of the outstanding shares of common stock of Time (TIME). The Offer will now expire on January 25, 2018, per terms of the merger agreement, unless further extended. On January 12, 2018, Meredith Corporation announced that early termination of the waiting period has been granted under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 applicable to its acquisition of Time.
  3. On January 11, 2018, Rockwell Collins (COL) announced that its shareowners overwhelmingly approved the proposed acquisition of Rockwell Collins by United Technologies (UTX). The proposed transaction is expected to close by the third quarter of 2018.
  4. January 11, 2018: According to The Wall Street Journal, Qualcomm (QCOM) is set to clinch conditional European Union antitrust approval for its acquisition of NXP Semiconductors (NXPI) as soon as next week.
  5. On January 11, 2018, The Federal Communications Commission paused its review of Sinclair Broadcast Group (SBGI)’s proposed purchase of Tribune Media (TRCO) to give time for the companies to arrange for the sale of some TV stations to bring the $3.9 billion deal in line with broadcast ownership limits.
  6. On January 12, 2018, OceanFirst Financial (OCFC) and Sun Bancorp (SNBC) announced that the “Election Deadline”, as well as holders of Sun restricted stock awards and restricted stock unit awards is January 29, 2018. The Election Deadline, as provided in the Merger Agreement, is the deadline by which Sun Holders may elect to receive cash, shares of OceanFirst common stock or both as “merger consideration” in connection with the Transaction pursuant to a formula, and subject to allocation and proration procedures, set forth in the Merger Agreement.
  7. On January 12, 2018, CVS Health (CVSsaid that it plans to keep Aetna’s (AET) headquarters in Connecticut after it completes its $69 billion acquisition of the U.S. health insurer.

Closed Deals:

  1. The acquisition of Enzymotec (ENZY) by Frutarom on January 11, 2018. It took 74 days for this deal to be completed.
  2. The acquisition of Bob Evans Farms (BOBE) by Post Holdings (POST) on January 12, 2018. It took 115 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 $3.23 04/01/2018 68.11% 327.11%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $24.77 06/30/2018 21.11% 46.43%
SXE 11/01/2017 American Midstream Partners, LP (AMID) $2.29 $1.95 06/30/2018 17.33% 38.11%
TWX 10/22/2016 AT&T, Inc. (T) $106.78 $92.05 06/21/2018 16.00% 37.19%
SCG 01/03/2018 Dominion Energy, Inc. (D) $50.80 $44.05 06/30/2018 15.33% 33.71%
AET 12/03/2017 CVS Health (CVS) $211.00 $184.20 12/31/2018 14.55% 15.17%
MON 09/14/2016 Bayer AG (BAYRY) $128.00 $119.70 03/31/2018 6.93% 33.75%
ANCB 04/11/2017 Washington Federal, Inc. (WAFD) $25.75 $24.85 06/30/2018 3.62% 7.96%
WGL 01/25/2017 AltaGas Ltd. (N/A) $88.25 $85.39 06/30/2018 3.35% 7.36%
TIG 01/05/2018 Takeda Pharmaceutical Company Limited (N/A) $42.72 $41.35 04/30/2018 3.31% 11.52%

List of all pending deals:

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

Disclaimer: I hold positions in Southcross Energy Partners (SXE), Sparton Corporation (SPA), Rosetta Genomics (ROSG) and Akorn (AKRX). 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

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