Merger Arbitrage Mondays – June 25, 2018

Merger activity increased last week with nine new deals announced and five 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 two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2018 74
Total Number of Deals Not Completed in 2018 6
Total Number of Pending Deals
Cash Deals 38
Stock Deals 15
Stock & Cash Deals 19
Special Conditions 9
Total Number of Pending Deals 81
Total Deal Size $1.01 trillion

New Deals:

  1. The acquisition of CoBiz Financial (COBZ) by BOK Financial Corporation (BOKF) for $977 million in a cash plus stock deal. Under the terms of the agreement, shareholders of CoBiz Financial will receive 0.17 shares of BOK Financial common stock and $5.70 in cash for each share of CoBiz common stock.
  2. The acquisition of Rent-A-Center (RCII) by Vintage Capital for $1.365 billion or $15.00 per share in cash. We added RCII as a potential deal to the Deals in the Works section on July 10, 2017 and the price after the news of the potential deal came out was $11.10.
  3. The acquisition of Energy XXI Gulf Coast (EGC) by a Cox Oil affiliate for $322 million or $9.10 per share in cash.
  4. The acquisition of Perry Ellis International (PERY) by George Feldenkreis, Perry Ellis’ founder for $492 million or $27.50 per share in cash. We added PERY as a potential deal to the Deals in the Works section on February 7, 2018 and the price after the news of the potential deal came out was $27.06.
  5. The acquisition of Cotiviti Holdings (COTV) by Verscend for $4.9 billion or $44.75 per share in cash.
  6. The acquisition of Foundation Medicine (FMI) by Roche (RHHBY) for $4.89 billion or $137.00 per share in cash.
  7. The acquisition of Cheniere Energy Partners LP Holdings (CQH) by Cheniere Energy (LNG) for $7.12 billion in an all stock deal. Under the terms of the agreement, Cheniere Partners Holdings’ shareholders will receive a fixed exchange ratio of 0.4750 Cheniere shares for each outstanding publicly-held share of Cheniere Partners Holdings. We added CQH as a potential deal to the Deals in the Works section on May 17, 2018 and the price after the news of the potential deal came out was $28.13.
  8. The acquisition of First Connecticut Bancorp (FBNK) by People’s United Financial (PBCT) for $544 million in an all stock deal. Under the terms of the agreement First Connecticut Bancorp shareholders will receive 1.725 shares of People’s United Financial stock for each First Connecticut Bancorp share.
  9. The acquisition of Web.com Group (WEB) by an affiliate of Siris Capital Group for $2 billion or $25.00 per share in cash. We added WEB as a potential deal to the Deals in the Works section on May 25, 2018 and the price after the news of the potential deal came out was $18.50.

Deal Updates:

  1. June 18, 2018: According to Reuters, LaSalle Hotel Properties (LHOsided with Blackstone Group’s offer to buy the company, as it looks to thwart Pebblebrook Hotel Trust’s (PEBtakeover bid.
  2. On June 18, 2018, Connecticut Water Service (CTWS) announced that the deadline to submit non-binding indicative proposals under the Company’s previously announced “go-shop” process has expired and that no proposals or indications of interest were received.
  3. On June 19, 2018, Cincinnati Bell (CBB) announced that the U.S. Federal Communications Commission (FCC) has approved Cincinnati Bell’s acquisition of Hawaiian Telcom Holdco (HCOM).
  4. On June 20, 2018, The Walt Disney Company (DIS) announced that it has signed an amended acquisition agreement with Twenty-First Century Fox (FOX), for $38 per share in cash and stock. The collar on the stock consideration will ensure that 21st Century Fox shareholders will receive a number of Disney shares equal to $38 in value if the average Disney stock price at closing is between $93.53 and $114.32. 21st Century Fox shareholders will receive an exchange ratio of 0.3324 shares of Disney common stock if the average Disney stock price at closing is above $114.32 and 0.4063 shares of Disney common stock if the average Disney stock price at closing is below $93.53. Elections of cash and stock will be subject to proration to the extent cash or stock is oversubscribed.
  5. On June 21, 2018, Analogic Corporation (ALOG) announced that its stockholders have approved the previously announced merger agreement under which an affiliate of Altaris Capital Partners will acquire all of the outstanding shares of Analogic.
  6. On June 21, 2018, AmTrust Financial Services (AFSI) announced that AmTrust stockholders have approved the proposed amended merger transaction in which Evergreen will acquire the approximately 45% of the Company’s issued and outstanding common shares that the Karfunkel-Zyskind Family and certain of its affiliates and related parties do not presently own or control.
  7. On June 22, 2018, Qualcomm Incorporated (QCOM) announced that Qualcomm River Holdings, has extended the offering period of its previously announced cash tender offer to purchase all of the outstanding common shares of NXP Semiconductors (NXPI). The tender offer is now scheduled to expire on June 29, 2018, unless extended or earlier terminated.

Closed Deals:

  1. The acquisition of The Finish Line (FINL) by JD Sports Fashion (JDDSF) on June 18, 2018. It took 84 days for this deal to be completed.
  2. The acquisition of RPX Corporation (RPXC) by HGGC on June 19, 2018. It took 49 days for this deal to be completed.
  3. The acquisition of 8point3 Energy Partners (CAFD) by Capital Dynamics on June 20, 2018. It took 135 days for this deal to be completed.
  4. The acquisition of ARMO BioSciences (ARMO) by Eli Lilly and Company (LLY) on June 22, 2018. It took 43 days for this deal to be completed.
  5. The acquisition of Analogic Corporation (ALOG) by Altaris Capital Partners on June 22, 2018. It took 73 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 $16.03 06/30/2018 112.10% 8183.47%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $2.02 09/30/2018 23.76% 89.42%
SCG 01/03/2018 Dominion Energy, Inc. (D) $44.78 $37.01 12/31/2018 21.00% 40.56%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.51 07/01/2018 20.40% 1240.95%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $161.85 06/30/2019 20.32% 20.05%
CTWS 03/15/2018 SJW Group (SJW) $77.52 $65.58 12/31/2018 18.21% 35.16%
ESRX 03/08/2018 Cigna Corporation (CI) $91.12 $79.23 12/31/2018 15.01% 28.98%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $20.65 07/31/2018 13.80% 139.93%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $6.23 $5.5 06/30/2019 13.36% 13.18%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $48.62 $42.96 06/30/2019 13.19% 13.01%

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), 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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