Merger Arbitrage Mondays – June 11, 2018

Merger activity increased last week with one new deal announced and four pending deals closing. The biggest news related to M&A came over the weekend, when the Committee on Foreign Investment in the United States (CFIUS) completed its review of the Genworth (GNW) acquisition in the midst of a growing trade war. The market had pretty much assumed this deal would get blocked by CFIUS and this was reflected by the fat spread on the deal, which had increased to over 100% in April as you can see from the chart below. The trend in the spread over the last month was probably the canary in the coal mine regarding the prospects of this deal. I expect the spread to narrow significantly on Monday but it is not a done deal yet as it requires other regulatory approvals before the deal can close.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section.

Deal Statistics:

New Deals:

1. The acquisition of AV Homes (AVHI) by Taylor Morrison Home Corporation (TMHC) for $963 million. Under the terms of the agreement, AV Homes stockholders will have the option to receive, at their election, consideration per share equal to (i) $21.50 in cash, (ii) 0.9793 shares of Taylor Morrison Class A common stock or (iii) the combination of $12.64 in cash and 0.4034 shares of Taylor Morrison Class A common stock, subject to an overall proration of approximately 60% cash and 40% stock. We have added this as an all cash deal.

Only plus or premium subscribers can access this post. Subscribe today.