Merger Arbitrage Mondays – May 21, 2018

Merger activity decreased last week with three new deals announced and two 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 55
Total Number of Deals Not Completed in 2018 5
Total Number of Pending Deals
Cash Deals 44
Stock Deals 14
Stock & Cash Deals 18
Collars 1
Special Conditions 9
Total Number of Pending Deals 85
Total Deal Size $959.41 billion

New Deals:

  1. The acquisition of State Bank Financial Corporation (STBZ) by Cadence Bancorporation (CADE) for $1.6 billion in an all stock deal. Under the terms of the merger agreement, State Bank Financial Corporation  shareholders will receive 1.160 shares of Cadence Bancorporation Class A common stock for each share of State Bank common stock.
  2. The acquisition of Abaxis (ABAX) by Zoetis (ZTS) for $1.7 billion or $83 per share in cash.
  3. The acquisition of Williams Partners (WPZ) by The Williams Companies (WMB) for $10.5 billion in an all stock deal. Under the terms of the merger agreement, Williams will acquire all of the outstanding units of Williams Partners at a fixed exchange ratio of 1.494 Williams shares for each public unit of Williams Partners (or a fixed exchange ratio of 1.513 if the closing does not occur before the record date for Williams’ dividend to be paid in the third quarter of 2018).

Deal Updates:

  1. May 14, 2018: According to Bloomberg, Chinese regulators have restarted their review of Qualcomm (QCOM)’s application to acquire NXP Semiconductors (NXPI) after having shelved the work earlier in reaction to growing trade tensions with the U.S.
  2. On May 15, 2018, Microchip Technology Incorporated (MCHP) announced, in connection with its pending acquisition of Microsemi Corporation (MSCC), that it has obtained antitrust clearances from China’s Ministry of Commerce, the Japan Fair Trade Commission, the Philippine Competition Commission, the Austrian Federal Competition Authority, and the German Federal Cartel Office. Completion of the merger also remains subject to certain other closing conditions, including approval by the Taiwan Fair Trade Commission and Microsemi stockholders. Assuming the timely receipt of the remaining regulatory approvals and the satisfaction of the other closing conditions, Microchip anticipates that the merger will be completed in late May/early June 2018.
  3. On May 18, 2018, Fresenius SE’s chief executive defended the company’s decision to pull out of a planned $4.8 billion takeover of Akorn (AKRX), saying it was the only option after uncovering data integrity breaches at the U.S drugmaker.

Closed Deals:

  1. The acquisition of AveXis (AVXS) by Novartis (NVS) on May 15, 2018. It took 37 days for this deal to be completed.
  2. The acquisition of ZAIS Group Holdings (ZAIS) by Z Acquisition on May 18, 2018. It took 126 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
AKRX 04/24/2017 Fresenius Kabi (N/A) $34.00 $13.98 06/30/2018 143.20% 1306.74%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.34 07/01/2018 62.57% 557.07%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.69 09/30/2018 47.93% 132.53%
SCG 01/03/2018 Dominion Energy, Inc. (D) $42.34 $34.32 12/31/2018 23.37% 38.08%
ESRX 03/08/2018 Cigna Corporation (CI) $92.09 $75.65 12/31/2018 21.73% 35.42%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $49.67 $42.6 06/30/2019 16.59% 14.95%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $20.28 07/31/2018 15.88% 81.62%
NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) $127.50 $111.02 05/31/2018 14.84% 541.81%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $169.61 06/30/2019 14.82% 13.35%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $5.84 $5.11 06/30/2019 14.26% 12.85%

List of all pending deals:

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

Disclaimer: I hold positions in SteadyMed (STDY), WGL Holdings (WGL), GGP Inc. (GGP), magicJack VocalTec (CALL), Monsanto (MON), 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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