Merger Arbitrage Mondays – August 27, 2018

Merger activity remained unchanged last week with three 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 no new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2018 101
Total Number of Deals Not Completed in 2018 12
Total Number of Pending Deals
Cash Deals 40
Stock Deals 16
Stock & Cash Deals 18
Special Conditions 5
Total Number of Pending Deals 79
Total Deal Size $1.12 trillion

New Deals:

  1. The acquisition of SodaStream International (SODA) by PepsiCo (PEP) for $3.2 billion or $144 per share in cash. PepsiCo paid a 32% premium to the 30-day volume weighted average price of SodaStream and this was after the stock had already doubled over the prior two years. The acquisition reminds me of Coca-Cola acquiring a stake in Keurig Green Mountain (GMCR) and GMCR’s eventual acquisition by JAB Holding for a fat premium of almost 78%. Both SODA and GMCR were heavily shorted stocks at various times over the last few years and are reminders that even if the short thesis is valid, acquisitions like these are a big risk for short sellers.
  2. The acquisition of The Navigators Group (NAVG) by The Hartford Financial Services Group (HIG) for $2.1 billion or $70 per share in cash.
  3. The acquisition of Spectra Energy Partners (SEP) by Enbridge (ENB) for $3.3 billion in an all stock deal. Under the terms of the agreement, Enbridge will acquire all of the outstanding public common units of SEP on the basis of 1.111 common shares of Enbridge for each common unit of SEP. We added SEP as a potential deal to the Deals in the Works section on May 18, 2018 and the price after the news of the potential deal came out was $31.03.

Deal Updates:

  1. On August 20, 2018, Annaly Capital Management (NLY) announced that it has extended its previously announced exchange offer to purchase all of the outstanding shares of common stock of MTGE Investment (MTGE). The Offer will now expire on September 7, 2018, unless further extended in accordance with the terms of the merger agreement.
  2. On August 20, 2018, DCT Industrial Trust (DCT) announced that at a Special Meeting of Stockholders, DCT Industrial’s stockholders approved the previously announced merger agreement with Prologis (PLD). The transaction remains subject to certain closing conditions and is expected to close on or around August 22, 2018.
  3. On August 21, 2018, Annaly Capital Management (NLY) announced that it has received the requisite regulatory approvals to complete its previously announced exchange offer to purchase all of the outstanding shares of common stock of MTGE Investment (MTGE).
  4. On August 21, 2018, Fidelity National Financial (FNF) announced that FNF received a “no-action letter” from the Canadian Competition Bureau, indicating that the Bureau does not intend to oppose completion of the previously announced acquisition of Stewart Information Services Corporation (STC).
  5. On August 22, 2018, LaSalle Hotel Properties (LHO) confirmed that it received a proposal from Pebblebrook Hotel Trust (PEB) to acquire LaSalle in a transaction with consideration of 0.92 common shares of Pebblebrook per common share of LaSalle.
  6. On August 23, 2018, Conagra Brands (CAG) and Pinnacle Foods (PF) announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  7. On August 23, 2018, BOK Financial Corporation (BOKF) announced that all necessary regulatory approvals required to complete the previously announced acquisition of CoBiz Financial (COBZ) have been received. The closing of the transaction is expected to occur in the fourth quarter of 2018, subject to the approval of CoBiz shareholders who will vote at a special meeting of shareholders on September 27, 2018.
  8. On August 24, 2018, Broadcom (AVGO) said that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired with respect to the proposed acquisition of CA Technologies (CA).
  9. On August 24, 2018, Cotiviti Holdings (COTV), announced today that Cotiviti’s shareholders voted to approve the proposed merger of Cotiviti with a subsidiary of Verscend at a special meeting of Cotiviti’s shareholders.
  10. August 24, 2018: According to Reuters, Shareholder advisory firm ISS recommended against a buyout deal of LaSalle Hotel Properties (LHO) by private equity company Blackstone, in another boon for LaSalle’s unwelcome suitor Pebblebrook Hotel Trust (PEB).
  11. August 24, 2018: Stockholders of Express Scripts Holding Company (ESRXapproved the proposed acquisition of Express Scripts by Cigna (CI).
  12. On August 24, 2018, AV Homes (AVHI) announced that it has set the date of its special meeting of stockholders to consider and vote on the proposal to approve the previously announced merger with a subsidiary of Taylor Morrison Home Corporation (TMHC), as well as other related proposals, for Wednesday, September 26, 2018.

Closed Deals:

  1. The acquisition of Mattersight Corporation (MATR) by an affiliate of NICE Ltd. on August 20, 2018. It took 116 days for this deal to be completed.
  2. The acquisition of Farmers Capital Bank Corporation (FFKT) by WesBanco (WSBC) on August 20, 2018. It took 123 days for this deal to be completed.
  3. The acquisition of VeriFone Systems (PAY) by Francisco Partners on August 20, 2018. It took 133 days for this deal to be completed.
  4. The acquisition of A. Schulman (SHLM) by LyondellBasell (LYB) on August 21, 2018. It took 187 days for this deal to be completed.
  5. The acquisition of DCT Industrial Trust (DCT) by Prologis (PLD) on August 22, 2018. It took 115 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 $14.53 09/30/2018 134.00% 1438.51%
SCG 01/03/2018 Dominion Energy, Inc. (D) $47.93 $38.95 12/31/2018 23.05% 66.77%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.57 12/01/2018 18.82% 71.55%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $51.10 $45.24 06/30/2019 12.96% 15.41%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $174.14 06/30/2019 11.83% 14.06%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $6.71 $6.08 06/30/2019 10.34% 12.29%
RSYS 07/02/2018 Reliance Industries Limited (N/A) $1.72 $1.57 12/31/2018 9.55% 27.68%
KANG 03/26/2018 IK Healthcare Investment Limited (N/A) $20.60 $18.9 09/30/2018 8.99% 96.56%
GGP 03/26/2018 Brookfield Property Partners (BPY) $23.50 $21.93 08/31/2018 7.16% 653.27%
BMS 08/06/2018 Amcor Limited (AMC.AX) $53.74 $50.24 03/31/2019 6.97% 11.78%

List of all pending deals:

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

Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing
Date
Profit Annu.
Profit
+ AKRX 04/24/2017 Fresenius Kabi (N/A) All Cash $4.75 billion $34.00 $14.53 3,032,548 09/30/2018 134.00% 1438.51%
+ SCG 01/03/2018 Dominion Energy, Inc. (D) All Stock $14.6 billion $47.93 $38.95 997,908 12/31/2018 23.05% 66.77%
+ GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) All Cash $2.7 billion $5.43 $4.57 1,381,062 12/01/2018 18.82% 71.55%
+ STC 03/16/2018 Fidelity National Financial, Inc. (FNF) Cash Plus Stock $1.2 billion $51.10 $45.24 46,619 06/30/2019 12.96% 15.41%
+ SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) Special Conditions $77.78 billion $194.74 $174.14 735,386 06/30/2019 11.83% 14.06%
+ S 04/29/2018 T-Mobile US, Inc. (TMUS) All Stock $59 billion $6.71 $6.08 11,194,086 06/30/2019 10.34% 12.29%
+ RSYS 07/02/2018 Reliance Industries Limited (N/A) All Cash $100.94 million $1.72 $1.57 141,879 12/31/2018 9.55% 27.68%
+ KANG 03/26/2018 IK Healthcare Investment Limited (N/A) All Cash $1.5 billion $20.60 $18.9 76,448 09/30/2018 8.99% 96.56%
+ GGP 03/26/2018 Brookfield Property Partners (BPY) Special Conditions $36.76 billion $23.50 $21.93 45,401,266 08/31/2018 7.16% 653.27%
+ BMS 08/06/2018 Amcor Limited (AMC.AX) All Stock $6.03 billion $53.71 $50.24 1,170,099 03/31/2019 6.90% 11.66%
+ ESRX 03/08/2018 Cigna Corporation (CI) Cash Plus Stock $67 billion $93.95 $87.91 2,818,306 12/31/2018 6.88% 19.92%
+ EHIC 04/06/2018 Teamsport Parent Limited (N/A) All Cash $1.19 billion $13.50 $12.71 129,517 09/30/2018 6.22% 66.73%
+ NXTM 08/07/2017 Fresenius Medical Care (N/A) All Cash $1.62 billion $30.00 $28.38 163,524 09/30/2018 5.71% 61.28%
+ ORBK 03/19/2018 KLA-Tencor Corporation (KLAC) Cash Plus Stock $3.2 billion $67.72 $64.32 218,296 12/31/2018 5.29% 15.31%
+ AET 12/03/2017 CVS Health (CVS) Cash Plus Stock $77 billion $207.06 $197.27 1,426,105 12/31/2018 4.96% 14.38%
+ PBSK 07/11/2018 City Holding Company (CHCO) All Stock $93.5 million $27.44 $26.5 8,385 12/31/2018 3.56% 10.31%
+ OCLR 03/12/2018 Lumentum Holdings Inc. (LITE) Cash Plus Stock $1.8 billion $9.74 $9.41 852,997 12/31/2018 3.51% 10.17%
+ AVA 07/19/2017 Hydro One Limited (N/A) All Cash $5.3 billion $53.00 $51.53 163,070 12/31/2018 2.85% 8.26%
+ COL 09/04/2017 United Technologies Corp. (UTX) Special Conditions $30 billion $140.00 $136.13 692,674 09/30/2018 2.84% 30.52%
+ KS 01/29/2018 WestRock Company (WRK) All Cash $4.9 billion $35.00 $34.31 810,299 09/30/2018 2.01% 21.59%
+ CWAY 03/15/2018 HarborOne Bancorp, Inc. (HONE) All Cash $251.95 million $28.25 $27.7 1,454 12/31/2018 1.99% 5.75%
+ USG 06/11/2018 Knauf (N/A) All Cash $7 billion $44.00 $43.19 426,049 01/31/2019 1.88% 4.36%
+ FCB 07/24/2018 Synovus Financial Corp. (SNV) All Stock $2.9 billion $53.02 $52.05 225,887 03/31/2019 1.87% 3.16%
+ RCII 06/18/2018 Vintage Capital (N/A) All Cash $1.365 billion $15.00 $14.74 361,171 12/31/2018 1.76% 5.11%
+ ANCB 07/17/2018 FS Bancorp, Inc. (FSBW) Cash Plus Stock $77 million $29.33 $28.85 883 01/31/2019 1.67% 3.89%
+ DNB 08/09/2018 Investor Group Led by CC Capital, Cannae Holdings and Thomas H. Lee Partners (N/A) All Cash $6.9 billion $145.00 $142.67 503,474 02/28/2019 1.63% 3.22%
+ RMGN 04/03/2018 SCG Digital, LLC (N/A) All Cash $16.8 million $1.27 $1.25 149,616 09/30/2018 1.60% 17.18%
+ CTWS 03/15/2018 SJW Group (SJW) All Cash $1.06 billion $70.00 $68.9 48,758 03/31/2019 1.60% 2.70%
+ AFSI 03/01/2018 Karfunkel-Zyskind Family (N/A) All Cash $3.39 billion $14.75 $14.52 200,361 12/01/2018 1.58% 6.02%
+ EVHC 06/11/2018 KKR (N/A) All Cash $9.9 billion $46.00 $45.3 764,100 12/31/2018 1.55% 4.48%
+ RLJE 07/30/2018 AMC Networks Inc. (AMCX) All Cash $274 million $6.25 $6.16 23,210 12/31/2018 1.46% 4.23%
+ EGN 08/14/2018 Diamondback Energy, Inc. (FANG) All Stock $9.2 billion $78.43 $77.39 1,970,205 12/31/2018 1.35% 3.90%
+ CA 07/11/2018 Broadcom Inc. (AVGO) All Cash $18.4 billion $44.50 $43.94 6,869,055 12/31/2018 1.27% 3.69%
+ KMG 08/15/2018 Cabot Microelectronics Corporation (CCMP) Cash Plus Stock $1.6 billion $78.15 $77.2 365,014 12/31/2018 1.24% 3.58%
+ SODA 08/20/2018 PepsiCo, Inc. (PEP) All Cash $3.2 billion $144.00 $142.37 1,091,574 01/31/2019 1.14% 2.66%
+ FCE-A 07/31/2018 Brookfield Asset Management Inc. (BAM) All Cash $11.4 billion $25.35 $25.09 3,534,587 12/31/2018 1.04% 3.00%
+ LPNT 07/23/2018 funds managed by affiliates of Apollo Global Management, LLC (N/A) All Cash $5.6 billion $65.00 $64.35 369,556 12/31/2018 1.01% 2.93%
+ CALL 11/09/2017 B. Riley Financial, Inc. (RILY) All Cash $143 million $8.71 $8.625 114,483 09/30/2018 0.99% 10.58%
+ XL 03/05/2018 AXA (N/A) All Cash $15.3 billion $57.60 $57.04 1,506,338 12/31/2018 0.98% 2.84%
+ ANDV 04/30/2018 Marathon Petroleum Corp. (MPC) All Stock $35.6 billion $156.74 $155.26 1,576,807 12/31/2018 0.96% 2.77%
+ ELON 06/29/2018 Adesto Technologies (IOTS) All Cash $45 million $8.50 $8.42 4,860 09/30/2018 0.95% 10.20%
+ FBNK 06/19/2018 People\’s United Financial, Inc. (PBCT) All Stock $544 million $32.19 $31.9 27,705 12/31/2018 0.90% 2.62%
+ SYNT 07/22/2018 Atos S.E. (N/A) All Cash $3.57 billion $41.00 $40.64 259,238 12/31/2018 0.89% 2.57%
+ SVU 07/26/2018 United Natural Foods, Inc. (UNFI) All Cash $2.9 billion $32.50 $32.22 710,304 12/31/2018 0.87% 2.52%
+ EGC 06/18/2018 Cox Oil affiliate (N/A) All Cash $322 million $9.10 $9.03 209,882 09/30/2018 0.78% 8.32%
+ BNCL 08/08/2018 WSFS Financial Corporation (WSFS) Cash Plus Stock $1.5 billion $17.78 $17.65 128,691 03/31/2019 0.76% 1.28%
+ XRM 06/25/2018 Andritz AG (ANDR) All Cash $1.27 billion $13.50 $13.4 103,633 12/31/2018 0.75% 2.16%
+ NAVG 08/22/2018 The Hartford Financial Services Group, Inc. (HIG) All Cash $2.1 billion $70.00 $69.5 309,141 06/30/2019 0.72% 0.86%
+ VVC 04/23/2018 CenterPoint Energy, Inc. (CNP) All Cash $8.12 billion $72.00 $71.5 158,862 03/31/2019 0.70% 1.18%
+ CVG 06/28/2018 SYNNEX Corporation (SNX) Cash Plus Stock $2.8 billion $24.77 $24.6 962,234 12/31/2018 0.69% 2.01%
+ SEP 08/24/2018 Enbridge Inc. (ENB) All Stock $3.3 billion $39.48 $39.22 6,446,709 12/31/2018 0.68% 1.96%
+ GPT 05/07/2018 affiliates of Blackstone Real Estate Partners VIII (N/A) All Cash $7.6 billion $27.50 $27.34 908,142 10/15/2018 0.59% 4.36%
+ UCBA 03/12/2018 Civista Bancshares, Inc. (CIVB) Cash Plus Stock $114.4 million $27.40 $27.25 1,907 09/30/2018 0.56% 6.05%
+ PHH 02/27/2018 Ocwen Financial Corporation (OCN) All Cash $479 million $11.00 $10.94 54,651 12/31/2018 0.55% 1.59%
+ XCRA 05/08/2018 Cohu, Inc. (COHU) Cash Plus Stock $627 million $14.50 $14.42 309,022 12/31/2018 0.54% 1.57%
+ CQH 06/19/2018 Cheniere Energy, Inc. (LNG) All Stock $7.12 billion $30.92 $30.76 79,482 09/30/2018 0.51% 5.51%
+ PNK 12/18/2017 Penn National Gaming, Inc. (PENN) Cash Plus Stock $5.85 billion $34.51 $34.34 476,051 12/31/2018 0.50% 1.44%
+ ETP 08/01/2018 Energy Transfer Equity, L.P. (ETE) All Stock $61.59 billion $23.40 $23.3 2,928,483 12/31/2018 0.42% 1.22%
+ COBZ 06/18/2018 BOK Financial Corporation (BOKF) Cash Plus Stock $977 million $22.96 $22.88 115,177 12/31/2018 0.35% 1.01%
+ PF 06/27/2018 Conagra Brands, Inc. (CAG) Cash Plus Stock $10.9 billion $67.04 $66.81 4,055,713 12/31/2018 0.34% 1.00%
+ EDR 06/25/2018 Greystar Student Housing Growth and Income Fund, LP (N/A) All Cash $4.6 billion $41.50 $41.38 220,096 12/31/2018 0.29% 0.84%
+ CHFN 04/24/2018 CenterState Bank Corporation (CSFL) Cash Plus Stock $360.1 million $24.88 $24.81 101,169 12/31/2018 0.26% 0.76%
+ GNBC 07/24/2018 Veritex Holdings, Inc. (VBTX) All Stock $1 billion $24.56 $24.5 109,688 03/31/2019 0.25% 0.42%
+ STBZ 05/13/2018 Cadence Bancorporation (CADE) All Stock $1.4 billion $32.98 $32.9 131,140 12/31/2018 0.24% 0.69%
+ GBNK 05/22/2018 Independent Bank Group, Inc. (IBTX) All Stock $1 billion $31.73 $31.65 86,721 12/31/2018 0.24% 0.69%
+ JMBA 08/02/2018 Focus Brands Inc. (N/A) All Cash $200 million $13.00 $12.97 164,840 09/30/2018 0.23% 2.48%
+ ILG 04/30/2018 Marriott Vacations Worldwide Corporation (VAC) Cash Plus Stock $5.44 billion $35.35 $35.28 634,627 12/31/2018 0.19% 0.55%
+ MBFI 05/21/2018 Fifth Third Bancorp (FITB) Cash Plus Stock $4.7 billion $48.24 $48.18 177,602 12/31/2018 0.13% 0.38%
+ COTV 06/19/2018 Verscend (N/A) All Cash $4.9 billion $44.75 $44.74 640,001 12/31/2018 0.02% 0.06%
+ AVHI 06/07/2018 Taylor Morrison Home Corporation (TMHC) All Cash $963 million $21.50 $21.50 233,670 10/31/2018 0.00% 0.00%
+ WEB 06/21/2018 affiliate of Siris Capital Group, LLC (N/A) All Cash $2 billion $28.00 $28.05 283,868 12/31/2018 -0.18% -0.52%
+ PERY 06/15/2018 George Feldenkreis, Perry Ellis’ founder (N/A) All Cash $492 million $27.50 $27.7 40,125 12/31/2018 -0.72% -2.09%
+ MTGE 05/02/2018 Annaly Capital Management, Inc. (NLY) Cash Plus Stock $900 million $19.92 $20.1 151,584 09/30/2018 -0.90% -9.63%
+ LHO 05/21/2018 affiliates of Blackstone Real Estate Partners VIII (N/A) All Cash $4.8 billion $33.50 $35.04 1,413,633 09/30/2018 -4.39% -47.18%
+ ZOES 08/17/2018 Cava Group, Inc. (N/A) All Cash $300 million $12.75 $13.37 671,529 12/31/2018 -4.64% -13.43%
+ STDY 04/30/2018 United Therapeutics Corporation (UTHR) Special Conditions $216 million $4.46 $4.7 46,866 09/30/2018 -5.11% -54.82%
+ GLF 07/16/2018 Tidewater Inc. (TDW) All Stock $282.72 million $34.67 $37.33 11,448 12/31/2018 -7.12% -20.63%
+ KERX 06/28/2018 Akebia Therapeutics, Inc. (AKBA) All Stock $567.35 $3.09 $3.37 466,455 12/31/2018 -8.25% -23.90%
+ FOX 12/14/2017 The Walt Disney Company (DIS) Special Conditions $85.1 billion $38.00 $44.58 4,032,565 09/30/2018 -14.76% -158.45%

Disclaimer: I hold positions in Radisys (RSYS), SteadyMed (STDY), GGP Inc. (GGP) and magicJack VocalTec (CALL). 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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