Merger Arbitrage Mondays – August 6, 2018

Merger activity remained steady last week with four new deals announced, six pending deals closing and one deal failing. 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 93
Total Number of Deals Not Completed in 2018 9
Total Number of Pending Deals
Cash Deals 40
Stock Deals 16
Stock & Cash Deals 18
Special Conditions 7
Total Number of Pending Deals 81
Total Deal Size $1.09 trillion

New Deals:

  1. The acquisition of RLJ Entertainment (RLJE) by AMC Networks (AMCX) for $274 million or $6.25 per share in cash. We added RLJE  as a potential deal to the Deals in the Works section on February 26, 2018 and the price after the news of the potential deal came out was $4.22.
  2. The acquisition of Forest City Realty Trust (FCE-A) by Brookfield Asset Management (BAM) for $11.4 billion or $25.35 per share in cash. We added FCE-A  as a potential deal to the Deals in the Works section on January 31, 2018 and the price after the news of the potential deal came out was $23.07.
  3. The acquisition of Energy Transfer Partners (ETP) by Energy Transfer Equity (ETE) for $61.59 billion. Under the terms of the transaction, ETP unitholders will receive 1.28 common units of ETE for each common unit of ETP they own.
  4. The acquisition of Jamba (JMBA) by Focus Brands for $200 million or $13.00 per share in cash.

Deal Updates:

  1. On July 30, 2018, Southcross Energy Partners (SXE) announced that, effective July 29, 2018, it has terminated the previously announced Agreement and Plan of Merger with American Midstream Partners (AMID).
  2. On July 30, 2018, Pebblebrook Hotel Trust (PEB) commented on the decision by the Board of Trustees of LaSalle Hotel Properties (LHOto reject Pebblebrook’s revised merger offer, valued at $36.21 per share and their continued support of the LaSalle-Blackstone merger agreement at its take-under price of $33.50 per share.
  3. On July 31, 2018, SteadyMed (STDY) announced that SteadyMed shareholders voted to approve the previously announced acquisition of the company by United Therapeutics Corporation (UTHR).
  4. On July 31, 2018, The proposed combination of Dominion Energy (D) and SCANA Corporation (SCG) achieved another significant milestone with the approval of SCANA’s shareholders.
  5. August 1, 2018: According to The Wall Street Journal, Carl Icahn has built a sizable stake in Cigna (CI) and plans to vote against the health insurer’s purchase of Express Scripts Holding (ESRX) the latest sign of trouble for the planned tie-up.
  6. August 1, 2018: Akorn (AKRX) expects to receive the Court’s ruling after the post-trial hearing, which is scheduled for August 23, 2018. Following expedited discovery, from July 9 to 13, 2018, the Court of Chancery held a trial on the parties’ claims (collectively, the “Delaware Action”). At the conclusion of trial, the Court of Chancery ordered post-trial briefing, which is scheduled to be completed on August 20, 2018. We have extended the closing date for this deal to September 30, 2018.
  7. On August 3, 2018, The Special Committee of the Perry Ellis International (PERY) Board of Directors, confirmed that it has received a revised, non-binding, unsolicited proposal from privately-held Randa Accessories Leather Goods  to acquire 100% of the outstanding common stock of Perry Ellis for $28.90 per share in cash.

Closed Deals:

  1. The acquisition of Foundation Medicine (FMI) by Roche (RHHBY) on July 31, 2018. It took 42 days for this deal to be completed.
  2. The acquisition of Abaxis (ABAX) by Zoetis (ZOE.F) on July 31, 2018. It took 76 days for this deal to be completed.
  3. The acquisition of CYS Investments (CYS) by Two Harbors Investment (TWO) on July 31, 2018. It took 96 days for this deal to be completed.
  4. The acquisition of TiGenix (TIG) by Takeda Pharmaceutical Company Limited on July 31, 2018. It took 207 days for this deal to be completed.
  5. The acquisition of Capella Education Company (CPLA) by Strayer Education (STRA) on August 1, 2018. It took 275 days for this deal to be completed.
  6. The acquisition of Nationstar Mortgage Holdings (NSM) by WMIH Corp. (WMIH) on August 1, 2018. It took 169 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 $18.6 09/30/2018 82.80% 549.46%
RAD 02/18/2018 Albertsons Companies, Inc. (N/A) $2.50 $1.84 09/30/2018 35.87% 238.04%
ESRX 03/08/2018 Cigna Corporation (CI) $94.81 $77.52 12/31/2018 22.31% 55.39%
TRCO 05/08/2017 Sinclair Broadcast Group, Inc. (SBGI) $40.92 $33.92 09/30/2018 20.64% 137.00%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.58 08/15/2018 18.56% 752.67%
CTWS 03/15/2018 SJW Group (SJW) $72.12 $62.85 12/31/2018 14.75% 36.61%
RSYS 07/02/2018 Reliance Industries Limited (N/A) $1.72 $1.5 12/31/2018 14.67% 36.42%
SCG 01/03/2018 Dominion Energy, Inc. (D) $48.25 $42.12 12/31/2018 14.55% 36.13%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $50.82 $44.75 06/30/2019 13.57% 15.10%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $173.02 06/30/2019 12.55% 13.97%

List of all pending deals:

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

Disclaimer: I hold positions in Radisys (RSYS), 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria

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