Merger Arbitrage Mondays – March 5, 2018

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

Deal Statistics:

Total Number of Deals Closed in 2018 25
Total Number of Deals Not Completed in 2018 4
Total Number of Pending Deals
Cash Deals 44
Stock Deals 13
Stock & Cash Deals 7
Collars 1
Special Conditions 7
Total Number of Pending Deals 71
Total Deal Size $566.02 billion

New Deals:

  1. The acquisition of PHH Corporation (PHH) by Ocwen Financial Corporation (OCN) for $479 million or $11.00 per share in cash.
  2. The acquisition of Student Transportation (STB) by a company sponsored by Caisse de dépôt et placement du Québec and Ullico for $1.19 billion or $7.50 per share in cash, based on an exchange rate of $1.2776 Canadian dollars per U.S. dollars as of February 27, 2018..
  3. The acquisition of AmTrust Financial Services (AFSI) by the Karfunkel-Zyskind Family for $3.39 billion or $13.50 per share in cash. We added AFSI as a potential deal to the Deals in the Works section on January 10, 2018 and the price after the news of the potential deal came out was $12.55.
  4. The acquisition of Microsemi Corporation (MSCC) by Microchip Technology Incorporated (MCHP) for $10.15 billion or $68.78 per share in cash. We added MSCC as a potential deal to the Deals in the Works section on January 23, 2018 and the price after the news of the potential deal came out was $63.44.

Deal Updates:

  1. According to Reuters, German healthcare group Fresenius SE has raised doubts about its planned acquisition of Akorn (AKRX) because of a probe into data integrity at the U.S. maker of liquid generic drugs.
  2. On February 27, 208, Discovery Communications (DISCK) disclosed that the US Department of Justice has completed the investigation of the Company’s acquisition of Scripps Networks Interactive (SNI).
  3. February 28, 2018: As previously announced, GCI (GNCMA) and Liberty Interactive Corporation (LVNTA) signed an agreement to combine GCI with certain assets of the Liberty Ventures Group. The companies expect to close the transaction on March 9, 2018.
  4. On March 1, 2018, Liberty Interactive Corporation (LVNTA) announced that it will rename itself “Qurate Retail Group.” Liberty Interactive will begin using this new name once the company completes the split-off of GCI Liberty following the previously announced acquisition of GCI Liberty (GNCMA), and will formally effect this name change at a later date.
  5. On March 1, 2018, Sanofi (SNY) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired and that Sanofi has received clearance from the Federal Cartel Office of Germany in accordance with the Act Against Restraints of Competition, applicable to Sanofi`s proposed acquisition of Ablynx (ABLX).
  6. On March 2, 2018, Kearny Financial (KRNY) and Clifton Bancorp  (CSBK) jointly announced that the shareholders of both companies overwhelmingly approved the previously announced merger of Clifton with and into Kearny at their respective shareholder meetings. Subject to the receipt of the required regulatory approvals and the satisfaction of customary closing conditions, the parties expect to close the merger in early April 2018.
  7. On March 2, 2018, Discovery Communications (DISCK) announced that it has elected to exercise in full the cash top-up option pursuant to the Agreement and Plan of Merger by and among Scripps Networks Interactive (SNI), Discovery and Skylight Merger Sub.
  8. March 3, 2018: According to Reuters, the start date for the trial over whether AT&T Inc (T) can buy Time Warner (TWXmay be delayed by a day to March 20, Judge Richard Leon said on Friday.

Closed Deals:

  1. The acquisition of Straight Path Communications (STRP) by Verizon Communications (VZ) on February 28, 2018. It took 293 days for this deal to be completed.
  2. The acquisition of Entellus Medical (ENTL) by Stryker Corporation (SYK) on February 28, 2018. It took 83 days for this deal to be completed.
  3. The acquisition of Regal Entertainment Group (RGC) by Cineworld Group  on February 28, 2018. It took 85 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 $2.83 04/01/2018 91.87% 1241.98%
AKRX 04/24/2017 Fresenius Kabi (N/A) $34.00 $18.97 03/31/2018 79.23% 1112.27%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.91 09/30/2018 30.89% 53.95%
NXTM 08/07/2017 Fresenius Medical Care (N/A) $30.00 $23.78 06/30/2018 26.16% 81.60%
SCG 01/03/2018 Dominion Energy, Inc. (D) $48.50 $39.65 06/30/2018 22.33% 69.65%
AET 12/03/2017 CVS Health (CVS) $201.52 $177.53 12/31/2018 13.51% 16.39%
TWX 10/22/2016 AT&T, Inc. (T) $105.98 $93.58 06/21/2018 13.26% 44.80%
AVA 07/19/2017 Hydro One Limited (N/A) $53.00 $48.54 12/31/2018 9.19% 11.14%
WGL 01/25/2017 AltaGas Ltd. (N/A) $88.25 $81.71 06/30/2018 8.00% 24.97%
ANCB 04/11/2017 Washington Federal, Inc. (WAFD) $25.75 $24.65 06/30/2018 4.46% 13.92%

List of all pending deals:

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

Disclaimer: I hold positions in Rite Aid (RAD), Juno Therapeutics (JUNO), Southcross Energy Partners (SXE) and Sparton Corporation (SPA). 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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