Merger Arbitrage Mondays – July 23, 2018

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

Deal Statistics:

Total Number of Deals Closed in 2018 85
Total Number of Deals Not Completed in 2018 6
Total Number of Pending Deals
Cash Deals 41
Stock Deals 15
Stock & Cash Deals 20
Special Conditions 8
Total Number of Pending Deals 84
Total Deal Size $1.05 trillion

New Deals:

  1. The acquisition of Gulfmark Offshore (GLF) by Tidewater (TDW) for $282.72 million in an all stock deal. Under the terms of the all-stock agreement, GulfMark stockholders will receive 1.100 shares of Tidewater common stock for each share of GulfMark common stock held by them.
  2. The acquisition of Anchor Bancorp (ANCB) by FS Bancorp (FSBW) for $77 million in a cash plus stock deal. Under terms of the Agreement, each share of Anchor common stock will receive fixed consideration consisting of 0.2921 shares of FS Bancorp common stock and $12.40 per share in cash.
  3. The acquisition of Syntel (SYNT) by Atos S.E. for $3.57 billion or $41.00 per share in cash.

Deal Updates:

  1. July 16, 2018: According to Reuters, Federal Communications Commission Chairman Ajit Pai said he has “serious concerns” about Sinclair Broadcast Group’s (SBGI) proposed $3.9 billion acquisition of Tribune Media (TRCO), an announcement that could scuttle the deal.
  2. On July 16, 2018, WMIH Corp. (WMIH) and Nationstar Mortgage Holdings (NSM) announced that, in connection with the anticipated completion of the proposed merger involving WMIH and Nationstar, the deadline for Nationstar stockholders to elect the form of merger consideration they desire to receive in the transaction has been set for July 26, 2018. WMIH and Nationstar have received all required regulatory approvals and expect to close the merger on July 31, 2018, subject to the satisfaction of all other closing conditions.
  3. July 19, 2018: According to Bloomberg, the U.S. Federal Communications Commission will send Sinclair Broadcast Group’s (SBGI) deal to buy Tribune Media (TRCOto a hearing, brushing aside the broadcaster’s offer to revise divestiture plans to meet the agency’s objections. Tribune Media Company released a statement in response to the issues raised in the Federal Communications Commission’s Hearing Designation Order regarding the Company’s pending acquisition by Sinclair Broadcast Group.
  4. July 19, 2018: According to the Wall Street Journal, Comcast (CMCSA) has dropped its pursuit of 21st Century Fox Inc.’s (FOX) entertainment assets, clearing the way for rival Walt Disney (DIS) to acquire key pieces of Rupert Murdoch’s media empire after the two sides dueled in recent weeks.
  5. On July 19, 2018, Penn National Gaming (PENN) announced that, at separate meetings yesterday and today, the Company received approvals from the Ohio Casino Control Commission (“OCCC”) and the Louisiana Gaming Control Board (“LGCB”) in connection with the Company’s pending acquisition of Pinnacle Entertainment (PNK).
  6. On July 20, 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 July 25, 2018, unless extended or earlier terminated.
  7. On July 19, 2018, The Idaho Public Utilities Commission postponed the date for the technical hearing of Hydro One Limited and Avista Corporation (AVA) that was previously scheduled for July 23, 2018. A new date has not yet been scheduled.
  8. On July 20, 2018, Hydro One Limited and Avista Corporation (AVA) received notice from the Washington Utilities and Transportation Commission that it has extended the deadline for a decision on the proposed merger between Hydro One and Avista by four months to December 14, 2018.
  9. On July 20, 2018, LaSalle Hotel Properties (LHO) announced that it has set the record date for the special meeting of shareholders to vote on the proposal to approve the previously announced merger with affiliates of Blackstone Real Estate Partners. Shareholders of record as of the close of business on July 20, 2018 will be entitled to vote at the Special Meeting.
  10. On July 20, 2018, SJW Group (SJW) and Connecticut Water Service (CTWS) announced that on Wednesday, July 18, 2018 they submitted a new application for the approval of their merger of equals, with the Connecticut Public Utilities Regulatory Authority.
  11. On July 20, 2018, Two Harbors Investment (TWO) and CYS Investments (CYSannounced the final exchange ratio for the previously announced proposed merger between Two Harbors and CYS. If the proposed merger is completed after market close on July 31, 2018, as is currently anticipated, each outstanding share of common stock of CYS will be converted into the right to receive from Two Harbors (i) 0.4680 newly issued shares of common stock of Two Harbors and (ii) cash consideration of $0.0965 per share. As an illustrative example, a stockholder holding 1,000 shares of CYS Common Stock would receive 468 shares of Two Harbors Common Stock and an additional $96.50 of cash consideration. The special meeting of stockholders for Two Harbors and CYS will take place on Friday, July 27, 2018.
  12. On July 20, 2018, United Therapeutics Corporation (UTHR) and SteadyMed (STDYannounced the termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 relating to United Therapeutics’ previously announced acquisition of SteadyMed.

Closed Deals:

  1. The acquisition of JA Solar Holdings (JASO) by JASO Holdings Limited, JASO Parent Limited and JASO Acquisition Limited on July 16, 2018. It took 241 days for this deal to be completed.
  2. The acquisition of Validus Holdings (VR) by American International Group (AIG) on July 18, 2018. It took 177 days for this deal to be completed.
  3. The acquisition of Financial Engines (FNGN) by Hellman & Friedman on July 19, 2018. It took 80 days for this deal to be completed.
  4. The acquisition of RSP Permian (RSPP) by Concho Resources (CXO) on July 19, 2018. It took 113 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
AKRX 04/24/2017 Fresenius Kabi (N/A) $34.00 $17.47 07/31/2018 94.62% 4317.01%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.82 09/30/2018 37.36% 197.64%
TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) $41.19 $33.05 09/30/2018 24.62% 130.24%
NXPI 10/27/2016 QUALCOMM Incorporated (QCOM) $127.50 $103.35 07/31/2018 23.37% 1066.13%
SCG 01/03/2018 Dominion Energy, Inc. (D) $47.68 $40.12 12/31/2018 18.84% 42.72%
ESRX 03/08/2018 Cigna Corporation (CI) $92.10 $77.56 12/31/2018 18.74% 42.49%
CTWS 03/15/2018 SJW Group (SJW) $75.45 $63.96 12/31/2018 17.96% 40.73%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.64 08/15/2018 17.03% 270.19%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $171.25 06/30/2019 13.72% 14.64%
SXE 11/01/2017 American Midstream Partners, LP (AMID) $1.79 $1.59 07/31/2018 12.70% 579.64%

List of all pending deals:

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

Disclaimer: I hold positions in SteadyMed (STDY), 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.

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