Merger Arbitrage Mondays – June 4, 2018

There were no new deals announced last week. Two pending deals closed and one deal failed. 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 60
Total Number of Deals Not Completed in 2018 6
Total Number of Pending Deals
Cash Deals 40
Stock Deals 15
Stock & Cash Deals 18
Collars 1
Special Conditions 9
Total Number of Pending Deals 82
Total Deal Size $969.91 billion

Deal Updates:

  1. On May 29, 2018, Bayer (BAYRYwon U.S. antitrust approval for its planned takeover of Monsanto (MON) on condition that it sells about $9 billion in assets.
  2. On May 29, 2018, Rosetta Genomics (ROSG) announced that the pending of merger of a subsidiary of Genoptix, with the Company has not occurred as scheduled and that Genoptix has refused to provide assurances that it intends to complete the transaction. Unless the transaction is completed by May 30, 2018, the Company intends to file for bankruptcy protection in Israel and the United States. This was an unfortunate outcome for a deal that failed twice. The first time, shareholders rejected the deal and Rosetta Genomics sold a portion of the company. The second time around, shareholders approved the deal and the spread on the deal was negligible right before the company declared bankruptcy. We have marked this deal as not completed.
  3. On May 29, 2018, Jacksonville Bancorp (JXSB) and CNB Bank Shares received the final regulatory approval necessary to complete the merger. The parties expect to complete the Merger on or about June 4, 2018, subject to the satisfaction of customary closing conditions.
  4. On May 30, 2018, RPX Corporation (RPXC) and HGGC announced that they have received clearance from the German Federal Cartel Office in connection with the previously-announced tender offer by HGGC’s affiliate, Riptide Purchaser.
  5. On May 31, 2018, Connecticut Water Service (CTWS) announced that it and SJW Group (SJWhave amended the terms of the companies’ merger agreement. The amended agreement, which was unanimously approved by the Connecticut Water Board of Directors, includes a new go-shop provision, pursuant to which Connecticut Water, with the assistance of its financial advisors, will actively solicit proposals for an alternative merger, acquisition or other strategic transaction involving Connecticut Water.
  6. On June 1, 2018, Kemper Corporation (KMPR) and Infinity Property and Casualty Corporation (IPCC) announced that the companies’ respective shareholders approved proposals related to the previously announced merger agreement under which Kemper will acquire Infinity.
  7. June 1, 2018: According to Reuters, China’s markets regulator said that it is still reviewing Qualcomm’s (QCOM) proposed acquisition of NXP Semiconductors (NXPI) and is in talks with Qualcomm about ways to eliminate negative impact from the deal. The Qualcomm merger of NXP has been approved by eight of nine required global regulators, with Chinese clearance the only one pending. We have extended the closing date for this deal to June 30, 2018.
  8. On June 2, 2018, Prysmian Group and General Cable Corporation (BGC) announced that the parties have been informed that they have obtained clearance from the Committee on Foreign Investment in the United States (CFIUS) for the proposed acquisition of General Cable by Prysmian. Prysmian and General Cable currently expect that the closing of the transaction will occur on June 6, 2018, subject to the satisfaction or waiver of the remaining customary conditions to closing set forth in the merger agreement between the parties.
  9. June 3, 2018: According to Reuters, Bayer (BAYRYlaunched a 6 billion euros ($7 billion) rights issue, a cornerstone of the financing package for its planned $62.5 billion takeover of seeds maker Monsanto (MON). Bayer is set to close the transaction on June 7.

Closed Deals:

  1. The acquisition of Microsemi Corporation (MSCC) by Microchip Technology Incorporated (MCHP) on May 29, 2018. It took 88 days for this deal to be completed.
  2. The acquisition of Atlantic Coast Financial Corporation (ACFC) by Ameris Bancorp (ABCB) on May 29, 2018.  It took 88 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 $13.79 06/30/2018 146.56% 2057.41%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.57 09/30/2018 59.24% 183.23%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.55 07/01/2018 52.96% 715.91%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $160.75 06/30/2019 21.14% 19.74%
SCG 01/03/2018 Dominion Energy, Inc. (D) $42.39 $35.35 12/31/2018 19.91% 34.60%
ESRX 03/08/2018 Cigna Corporation (CI) $90.33 $77.07 12/31/2018 17.20% 29.90%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $20.36 07/31/2018 15.42% 98.76%
TIG 01/05/2018 Takeda Pharmaceutical Company Limited (N/A) $42.72 $37.1 06/30/2018 15.15% 212.66%
TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) $41.37 $35.99 09/30/2018 14.95% 46.25%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $49.20 $42.98 06/30/2019 14.46% 13.50%

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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