Merger Arbitrage Mondays – September 17, 2018

Merger activity remained unchanged last week with four 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 was one new deal announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2018 111
Total Number of Deals Not Completed in 2018 13
Total Number of Pending Deals
Cash Deals 43
Stock Deals 18
Stock & Cash Deals 15
Special Conditions 3
Total Number of Pending Deals 79
Total Deal Size $1.14 trillion

New Deals:

  1. The acquisition of Engility Holdings (EGL) by Science Applications International (SAIC) for $2.5 billion in an all stock deal. Under the terms of the agreement, Engility stockholders will receive a fixed exchange ratio of 0.450 shares of SAIC common stock for each share of Engility stock. We added EGL as a potential deal to the Deals in the Works section on July 12, 2018 and the price after the news of the potential deal came out was $34.97.
  2. The acquisition of Integrated Device Technology (IDTI) by Renesas Electronics Corporation for $6.7 billion or $49.00 per share in cash.
  3. The acquisition of Invuity (IVTY) by Stryker Corporation (SYK) for $190 million or $7.40 per share in cash.
  4. The acquisition of Essendant (ESND) by Staples for $996 million or $12.80 per share in cash. We added ESND as a potential deal to the Deals in the Works section on May 16, 2018 and the price after the news of the potential deal came out was $10.80.

Deal Updates:

  1. On September 9, 2018, Energy XXI Gulf Coast (EGCentered into an amendment to the Agreement and Plan of Merger to provide for the closing date of the merger to occur on October 10, 2018. The amendment also provides that Cox cannot refuse to consummate the merger because of any material adverse events occurring on or after September 10, 2018 until the closing date.
  2. On September 10, 2018, Atos SE announced that it has been informed that the review by the Committee on Foreign Investment in the United States (CFIUS) of its proposed acquisition of Syntel (SYNT) has been completed, and there are no unresolved national security issues with respect to the transaction.
  3. September 10, 2018: According to The Wall Street Journal, FCC has paused the clock for reviewing the T-Mobile (TMUS), Sprint (S) deal. Regulator says it needs more time to review engineering and business information from the companies.
  4. On September 10, 2018, AXA announced that it has obtained all regulatory approvals required to complete the proposed acquisition of XL Group (XL).
  5. On September 12, 2018, Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP) announced that ETE’s Registration Statement on Form S-4 has been declared effective as of September 7, 2018 by the Securities and Exchange Commission. The special meeting of ETP unitholders will be held on October 18, 2018.
  6. On September 13, 2018, Rent-A-Center (RCII) and Vintage Capital Management announced that both the Company and Buddy’s received a Request for Additional Information and Documentary Materials from the Federal Trade Commission in connection with the pending acquisition of Rent-A-Center by affiliates of Vintage Capital. The special meeting of Rent-A-Center’s stockholders to approve the Merger is scheduled for Tuesday, September 18, 2018.
  7. On September 13, 2018, Conagra Brands (CAG) and Pinnacle Foods (PF) announced that a special meeting of Pinnacle Foods shareholders has been scheduled for October 23, 2018.
  8. On September 13, 2018, Genworth Financial (GNW) announced it will hold its 2018 Annual Meeting of Stockholders on December 13, 2018, if its proposed merger with China Oceanwide Holdings Group has not yet been completed. On September 14, 2018, Genworth Financial and China Oceanwide Holdings Group announced that they are submitting supplemental information to the regulators who are reviewing their proposed transaction.
  9. On September 14, 2018, Takeda Pharmaceutical said that China approved its purchase of Shire (SHPG).
  10. September 14, 2018: According the The Wall Street Journal, United Technologies (UTX) Chief Executive Greg Hayes said that he expects to close the acquisition of Rockwell Collins (COL) by the end of the month.
  11. On September 14, 2018, EdR (EDR) announced that EDR stockholders voted to approve the proposed merger of EDR with GSHGIF REIT.

Closed Deals:

  1. The acquisition of XL Group (XL) by AXA on September 12, 2018. It took 191 days for this deal to be completed.
  2. The acquisition of Jamba (JMBA) by Focus Brands on September 13, 2018.  It took 42 days for this deal to be completed.
  3. The acquisition of United Community Bancorp (UCBA) by Civista Bancshares (CIVB) on September 14, 2018. It took 186 days for this deal to be completed.
  4. The acquisition of Echelon Corporation (ELON) by Adesto Technologies (IOTS) on September 14, 2018. It took 77 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 $13.73 09/30/2018 147.63% 4145.08%
SCG 01/03/2018 Dominion Energy, Inc. (D) $48.07 $35.47 12/31/2018 35.54% 123.53%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $10.05 09/30/2018 34.33% 963.83%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.44 12/01/2018 22.30% 108.51%
KANG 03/26/2018 IK Healthcare Investment Limited (N/A) $20.60 $17.13 10/31/2018 20.26% 168.04%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $51.00 $45.1 06/30/2019 13.09% 16.70%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.00 $6.35 06/30/2019 10.23% 13.06%
EGC 06/18/2018 Cox Oil affiliate (N/A) $9.10 $8.26 09/30/2018 10.17% 285.53%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $177.30 06/30/2019 9.84% 12.55%
ORBK 03/19/2018 KLA-Tencor Corporation (KLAC) $64.98 $61.15 12/31/2018 6.26% 21.76%

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) 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.

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

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