Merger Arbitrage Mondays – May 7, 2018

Merger activity decreased last week with six new deals announced and one pending deal closing. 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:

Total Number of Deals Closed in 2018 52
Total Number of Deals Not Completed in 2018 5
Total Number of Pending Deals
Cash Deals 43
Stock Deals 13
Stock & Cash Deals 17
Collars 1
Special Conditions 8
Total Number of Pending Deals 81
Total Deal Size $858.2 billion

New Deals:

  1. The acquisition of Andeavor (ANDV) by Marathon Petroleum (MPC) for $35.6 billion in a cash or stock deal. Under the terms of the agreement, ANDV shareholders will have the option to choose 1.87 shares of MPC stock, or $152.27 in cash subject to a proration mechanism that will result in 15 percent of ANDV’s fully diluted shares receiving cash consideration.
  2. The acquisition of SteadyMed (STDY) by United Therapeutics Corporation (UTHR) for $216 million. Under the terms of the agreement, shareholders of SteadyMed will receive $4.46 per share in cash at closing and an additional $2.63 per share in cash upon the achievement of a milestone related to the commercialization of Trevyent®.
  3. The acquisition of Financial Engines (FNGN) by Hellman & Friedman for $3.02 billion or $45.00 per share in cash.
  4. The acquisition of ILG (ILG) by Marriott Vacations Worldwide Corporation (VAC) for $5.44 billion in a cash plus stock deal. Under the terms of the merger agreement, ILG shareholders will receive $14.75 in cash and 0.165 shares of MVW common stock for each ILG share. We added ILG as a potential deal to the Deals in the Works section on March 22, 2018 and the price after the news of the potential deal came out was $32.23.
  5. The acquisition of RPX Corporation (RPXC) by HGGC for $555 million or $10.50 per share in cash. We added RPXC as a potential deal to the Deals in the Works section on January 24, 2018 and the price after the news of the potential deal came out was $13.87.
  6. On May 1, 2018, KLX Inc. (KLXI) announced its intention to sell its Aerospace Solutions Group business to The Boeing Company (BA) and to spin-off to KLX shareholders its Energy Services Group business. We have added this deal to the Spinoffs section instead of the Merger Arbitrage Tool.
  7. The acquisition of MTGE Investment (MTGE) by Annaly Capital Management (NLY) for $900 million in a cash plus stock deal. Under the terms of the agreement, MTGE shareholders may elect to receive: (a) $9.82 in cash and 0.9519 shares of Annaly common stock; (b) $19.65 in cash; or (c) 1.9037 shares of Annaly common stock. MTGE shareholders who elect the Cash Consideration Option or Stock Consideration Option will be subject to proration, in each of the exchange offer and the subsequent second step merger, so that the aggregate consideration will consist of approximately 50% of Annaly’s common stock and approximately 50% in cash.

Deal Updates:

  1. On April 30, 2018, Analogic Corporation (ALOG) announced that it has received notice from the U.S. Federal Trade Commission that early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended , was granted in connection with the pending acquisition of Analogic by an affiliate of Altaris Capital Partners.
  2. On April 30, 2018, SJW Group (SJW) and Connecticut Water Service (CTWS) announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the companies’ merger of equals.
  3. On May 1, 2018, Novartis AG (NVS) announced that the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 applicable to Novartis` cash tender offer for AveXis (AVXS) has expired.
  4. On May 2, 2018, McDermott International (MDRshareholders approved the merger with Chicago Bridge & Iron (CBI).
  5. On May 4, 2018, U.S. aerospace and industrial company United Technologies (UTXsecured conditional EU approval for its $23 billion bid for avionics maker Rockwell Collins (COL).

Closed Deals:

  1. The acquisition of MuleSoft (MULE) by salesforce.com (CRM) on May 2, 2018. It took 43 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 $11.74 06/30/2018 189.61% 1281.61%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.02 07/01/2018 79.80% 529.59%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.63 09/30/2018 53.37% 133.44%
ESRX 03/08/2018 Cigna Corporation (CI) $90.41 $70.22 12/31/2018 28.76% 44.10%
NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) $127.50 $100.28 05/31/2018 27.14% 412.81%
SCG 01/03/2018 Dominion Energy, Inc. (D) $43.87 $36.5 12/31/2018 20.18% 30.95%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $19.78 07/31/2018 18.81% 80.76%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $49.39 $41.81 06/30/2019 18.13% 15.79%
AET 12/03/2017 CVS Health (CVS) $197.87 $172.26 12/31/2018 14.86% 22.80%
CAVM 11/20/2017 Marvell Technology Group Ltd. (MRVL) $86.23 $75.27 06/30/2018 14.57% 98.45%

List of all pending deals:

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

Disclaimer: I hold positions in WGL Holdings (WGL), AveXis (AVXS), 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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