Merger Arbitrage Mondays – February 26, 2018

Merger activity increased last week with three new deals announced, one pending deal closing, one deal priced higher and one deal failing. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There was one new deal announced in the Deals in the Works section.

Deal Statistics:

New Deals:

1. The acquisition of Rite Aid Corporation (RAD) by Albertsons Companies for $5.98 billion. Under the terms of the agreement, Ride Aid shareholders would receive 0.10 of Parent common stock plus either (i) an amount in cash equal to $0.1832 per share or (ii) 0.0079 share of the Parent common stock. Using these options we have calculated that one share of the combined company is estimated to be worth $23.16. Hence each Rite Aid share is worth an estimated $2.499. We have added this deal as a “Special Conditions” deal. I posted a group of tweets about this merger last week and hope to expand it into a full article this week.
2. The acquisition of Fogo de Chao (FOGO) by Rhône Capital for $560 million or $15.75 per share in cash.
3. The acquisition of Blue Buffalo Pet Products (BUFF) by General Mills (GIS) for $8 billion or $40.00 per share in cash. At 22 times adjusted EBITDA, General Mills is paying up for growth.

Deal Updates:

1. On February 20, 2018, Qualcomm Incorporated (QCOM) announced that Qualcomm River Holdings, an indirect wholly owned subsidiary of Qualcomm, has reached an amended agreement with NXP Semiconductors (NXPI) to increase to $127.50 per share its previously announced cash tender offer to purchase all outstanding shares of NXP.
2. On February 20, 2018, Liberty Interactive Corporation  (LVNTA) and GCI Liberty (GNCMA) announced that GCI Liberty received notice from the Commissioner of the Department of Commerce, Community and Economic Development of the State of Alaska that its amended and restated articles of incorporation were accepted for filing. GCI Liberty and LIC continue to expect that the closing of the proposed transactions will occur in the first quarter of 2018.
3. On February 20, 2018, Celgene Corporation (CELG) announced that the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the previously announced tender offer for all issued and outstanding shares of common stock of Juno Therapeutics (JUNO) expired on February 20, 2018.
4. February 20, 2018: According to The Wall Street Journal, a federal judge on Tuesday undercut AT&T (T)’s plans to argue that the Justice Department is challenging its acquisition of Time Warner (TWX) for political reasons, ruling that the company can’t have information on internal government deliberations.
5. On February 22, 2018, LHC Group (LHCG) and Almost Family (AFAM) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, with respect to the proposed business combination of LHC Group and Almost Family, has expired, satisfying one of the important conditions to the closing of the pending transaction.
6. On February 22, 2018, Xcerra Corp (XCRA) said on Thursday that a U.S. national security panel had blocked its $580-million sale to a Chinese state-backed semiconductor investment fund.
7. On February 22, 2018, First Financial Bancorp (FFBC) and MainSource Financial Group (MSFG) announced the receipt of regulatory approval from the Board of Governors of the Federal Reserve System to move forward with the proposed merger of MainSource Financial Group  into First Financial Bancorp. The Ohio Division of Financial Institutions approved the proposed merger in January 2018. The official closing of the merger transaction is scheduled for April 1, 2018, when the two banks will legally become one company.
8. On February 23, 2018, Sanofi (SNY) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to Sanofi’s proposed acquisition of Bioverativ (BIVV) has expired.
9. On February 23, 2018, Rosetta (ROSG) reported that an insufficient number of votes were cast in favor of the transaction to constitute a majority of the shares outstanding needed for the proposed merger with Genoptix. Rosetta noted that the extraordinary general meeting has been rescheduled twice, and that it is unable to reschedule the meeting again. As a result, Genoptix has issued a notice to the Company that they are terminating the merger agreement effective immediately, but Genoptix has indicated that they remain interested in pursuing alternative options to consummate a transaction with Rosetta.

Closed Deals:

1. The acquisition of Deltic Timber Corporation (DEL) by Potlatch Corporation (PCH) on February 20, 2018. It took 120 days for this deal to be completed.

Top 10 deals with largest spreads:

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 Rite Aid (RAD), Juno Therapeutics (JUNO), Southcross Energy Partners (SXE), Sparton Corporation (SPA) 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.

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