Merger Arbitrage Mondays – March 19, 2018

Merger activity remained unchanged last week with five new deals announced. 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 2018 32
Total Number of Deals Not Completed in 2018 5
Total Number of Pending Deals
Cash Deals 44
Stock Deals 14
Stock & Cash Deals 10
Collars 1
Special Conditions 5
Total Number of Pending Deals 73
Total Deal Size $652.65 billion

New Deals:

  1. The acquisition of Oclaro (OCLR) by Lumentum Holdings (LITE) for $1.8 billion in a cash plus stock deal. Under the terms of the agreement, for each share of Oclaro stock held, Oclaro stockholders will be entitled to receive $5.60 in cash and 0.0636 of a share of Lumentum common stock.
  2. The acquisition of United Community Bancorp (UCBA) by Civista Bancshares (CIVB) for $114.4 million in a cash plus stock deal. Under the terms of the agreement, the consideration United shareholders will receive is equivalent to 1.027 shares of Civista common stock and $2.54 in cash per share of United common stock.
  3. The acquisition of Cogentix Medical (CGNT) by LABORIE Medical Technologies for $214 million or $3.85 per share in cash.
  4. The acquisition of Coastway Bancorp (CWAY) by HarborOne Bancorp (HONE) for $251.95 million or $28.25 per share in cash.
  5. The acquisition of Connecticut Water Service (CTWS) by SJW Group (SJW) for $1.06 billion in an all stock deal. Under the terms of the agreement, Connecticut Water shareholders will receive 1.1375 shares of SJW Group common stock for each share of Connecticut Water common stock they own.

Deal Updates:

  1. On March 12, 2018, JA Solar Holdings (JASO) announced shareholders’ approval for the merger.
  2. On March 12, 2018, Penn (PENN) and Pinnacle (PNK) each received a Request for Additional Information and Documentary Materials, often referred to as a “Second Request,” from the FTC in connection with the FTC’s review of the Merger.
  3. On March 13, 2018, China’s Commerce Ministry said that it has approved Bayer AG (BAYRY)’s plan to buy Monsanto (MON) but the buyer will have to spin off some assets, among other conditions.
  4. On March 13, 2018, CVS Health Corporation (CVSstockholders voted to approve the shares of company stock to be issued in the company’s acquisition of Aetna (AET). According to the preliminary results announced at the meeting, more than 98 percent of the shares voted were in favor of the proposal. The merger is expected to close in the second half of 2018, subject to required regulatory approvals.
  5. March 13, 2018: AT&T (Tcan cite a voluntary commitment not to withhold content in licensing talks as a key part of its defense when an antitrust trial begins next week over the fate of the company’s planned $85 billion merger with Time Warner (TWX), U.S. District Judge Richard Leon said on Tuesday.
  6. On March 14, 2018, McDermott International (MDR) and CB&I (CBI) announced that the companies have received antitrust clearance in Russia for their proposed combination. With this clearance, McDermott and CB&I have received all the required competition authority approvals for the transaction.
  7. March 15, 2018: According to Reuters. U.S. District Judge Richard Leon said on Thursday a trial to decide if AT&T’s (T) $85 billion acquisition of Time Warner (TWX) is legal under U.S. antitrust law may last six to eight weeks, significantly longer than previously forecast.
  8. March 15, 2018: According to Reuters, Bayer AG’s (BAYRYplan to win antitrust approval to buy U.S. seeds supplier Monsanto (MON) has not satisfied U.S. officials, who are worried the $62.5 billion merger could hurt competition.
  9. On March 16, 2018, Marvell Technology Group (MRVL) announced that its shareholders have voted to approve the issuance of Marvell common shares in connection with the previously announced proposed acquisition of Cavium (CAVM).

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 $2.96 04/01/2018 83.45% 2342.91%
AKRX 04/24/2017 Fresenius Kabi (N/A) $34.00 $18.78 03/31/2018 81.04% 2465.08%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.61 09/30/2018 55.28% 103.47%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $24.00 06/30/2018 25.00% 88.59%
ESRX 03/08/2018 Cigna Corporation (CI) $89.80 $76.02 12/31/2018 18.13% 23.06%
SCG 01/03/2018 Dominion Energy, Inc. (D) $47.24 $40.21 06/30/2018 17.48% 61.94%
AET 12/03/2017 CVS Health (CVS) $200.00 $173.91 12/31/2018 15.00% 19.08%
TWX 10/22/2016 AT&T, Inc. (T) $106.92 $96.28 06/21/2018 11.05% 42.91%
JASO 11/17/2017 JASO Holdings Limited, JASO Parent Limited and JASO Acquisition Limited (N/A) $7.55 $6.85 03/31/2018 10.22% 310.83%
AFSI 03/01/2018 Karfunkel-Zyskind Family (N/A) $13.50 $12.37 12/01/2018 9.14% 12.97%

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) and Southcross Energy Partners (SXE). 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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