Merger Arbitrage Mondays – May 28, 2018

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

Deal Statistics:

Total Number of Deals Closed in 2018 58
Total Number of Deals Not Completed in 2018 5
Total Number of Pending Deals
Cash Deals 42
Stock Deals 15
Stock & Cash Deals 19
Collars 1
Special Conditions 9
Total Number of Pending Deals 85
Total Deal Size $969.9 billion

New Deals:

  1. The acquisition of MB Financial (MBFI) by Fifth Third Bancorp (FITB) for $4.7 billion in a cash plus stock deal. Under the terms of the agreement, common shareholders of MB Financial will receive $54.20 of total consideration, consisting of 1.45 shares of Fifth Third common stock and $5.54 in cash for each share of MB Financial common stock.
  2. The acquisition of LaSalle Hotel Properties (LHO) by affiliates of Blackstone Real Estate Partners for $4.8 billion or $33.50 per share in cash. We added LHO as a potential deal to the Deals in the Works section on March 28, 2018 and the price after the news of the potential deal came out was $28.13.
  3. The acquisition of Guaranty Bancorp (GBNK) by Independent Bank Group (IBTX) for $1 billion in an all stock deal. Under the terms of the merger agreement, shareholders of Guaranty Bancorp will receive 0.45 shares of IBTX common stock for each share of GBNK common stock.

Deal Updates:

  1. On May 21, 2018, The Competition Commission of India (CCI) approved the acquisition of U.S. seed major Monsanto (MON) by Bayer AG (BAYRY), in a decision that moves the deal a step closer to the finish line.
  2. On May 21, 2018, Hydro One Limited and Avista Corporation (AVA) announced that the Committee on Foreign Investment in the United States (“CFIUS”) has completed its review of the proposed merger, and has concluded that there are no unresolved national security concerns with respect to the transaction.
  3. On May 21, 2018, The U.S. Federal Communications Commission said it wants additional comments on Sinclair Broadcast Group’s (SBGI) acquisition of Tribune Media (TRCO) and disclosed it does not expect to make a decision before July 12.
  4. On May 22, 2018, LyondellBasell (LYB) announced that it has received unconditional clearance from the Chinese State Administration of Market Regulation for its pending acquisition of A. Schulman (SHLM).
  5. On May 22, 2018, Jacksonville Bancorp (JXSB) announced that its stockholders overwhelmingly approved their pending merger with CNB Bank Shares. Subject to the receipt of the required regulatory approvals and the satisfaction of customary closing conditions, the parties expect to close the merger on May 31, 2018.
  6. On May 23, 2018, Microchip Technology Incorporated (MCHP) announced, in connection with its pending acquisition of Microsemi Corporation (MSCC), that it has obtained antitrust clearance from the Taiwan Fair Trade Commission.  Additionally, Microchip announced that the shareholders of Microsemi overwhelmingly approved the merger with 99.5% of the Microsemi shares that voted being in favor of the merger. Microchip currently expects that the merger will close on May 29, 2018.
  7. May 23, 2018: A U.S. Senate committee plans to hold a hearing on June 27 on the proposed  merger of T-Mobile US (TMUS) and Sprint (S). T-Mobile and Sprint said they expected to complete their deal no later than the first half of 2019.
  8. May 23, 2018: According to Bloomberg, Comcast (CMCSAconfirmed that it may make an offer for the entertainment assets that 21st Century Fox (FOX) has agreed to sell to Walt Disney (DIS), escalating a bidding war that’s already underway over Fox’s European satellite business.
  9. On May 24, 2018, Marvell (MRVL) announced that the Committee on Foreign Investment in the United States (CFIUS) has completed its review of the company’s previously announced merger transaction with Cavium (CAVM) and determined that there are no unresolved national security concerns with respect to the merger. The merger remains subject to customary closing conditions, including receipt of regulatory approval from China’s State Administration for Market Regulation. Marvell continues to expect the merger to close mid-calendar year of 2018.

Closed Deals:

  1. The acquisition of CommerceHub (CHUBA) by GTCR and Sycamore Partners on May 21, 2018. It took 76 days for this deal to be completed.
  2. The acquisition of Bravo Brio Restaurant Group (BBRG) by Spice Private Equity, an affiliate of GP Investments on May 24, 2018. It took 77 days for this deal to be completed.
  3. The acquisition of Hardinge (HDNG) by an affiliate of Privet Fund Management on May 25, 2018. It took 101 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 $14.07 06/30/2018 141.65% 1566.72%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.47 07/01/2018 56.48% 606.37%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.66 09/30/2018 50.60% 147.76%
SCG 01/03/2018 Dominion Energy, Inc. (D) $42.93 $35.81 12/31/2018 19.88% 33.44%
ESRX 03/08/2018 Cigna Corporation (CI) $91.56 $77.08 12/31/2018 18.79% 31.61%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $165.23 06/30/2019 17.86% 16.38%
TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) $41.64 $36.12 09/30/2018 15.27% 44.59%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $49.49 $43.21 06/30/2019 14.52% 13.32%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $20.55 07/31/2018 14.36% 81.87%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $5.80 $5.15 06/30/2019 12.70% 11.64%

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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