Merger Arbitrage Mondays – November 19, 2018

Merger activity decreased last week with two 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 was one new deal announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2018 146
Total Number of Deals Not Completed in 2018 14
Total Number of Pending Deals
Cash Deals 46
Stock Deals 32
Stock & Cash Deals 15
Special Conditions 8
Total Number of Pending Deals 101
Total Deal Size $1.35 trillion

New Deals:

  1. The acquisition of athenahealth (ATHN) by an affiliate of Veritas and Evergreen for $5.7 billion or $135 per share in cash. We added ATHN as a potential deal to the Deals in the Works section on May 7, 2018 and the price after the news of the potential deal came out was $146.75.
  2. The acquisition of Tahoe Resources (TAHO) by Pan American Silver (PAAS) for $1.45 billion in a cash or stock deal. Under the terms of the agreement, Tahoe shareholders may elect to receive US$3.40 in cash or 0.2403 Pan American shares for each Tahoe share. In addition, Tahoe shareholders will receive contingent consideration in the form of contingent value rights (CVR), that will be exchanged for 0.0497 Pan American shares for each Tahoe share. We are treating this as a special conditions deal and are using the value of the CVR when calculating the closing price. The large spread on the deal reflects the discount on the CVR, as is usually the case in these types of deals.

Deal Updates:

  1. On November 15, 2018, Forest City Realty Trust (FCE-A) announced that its stockholders approved the acquisition of Forest City by Brookfield Asset Management (BAM). Forest City expects that the acquisition will be completed in December on or prior to December 10, 2018.
  2. On November 16, 2018, The Navigators Group (NAVG) announced that, at a special meeting of stockholders, Navigators’ stockholders approved the adoption of the previously announced merger agreement relating to the proposed transaction between Navigators and The Hartford Financial Services Group (HIG).
  3. November 16, 2018: Univar (UNVR) and Nexeo Solutions (NXEO) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, relating to the previously-announced acquisition of Nexeo Solutions by Univar, expired on November 15, 2018.
  4. On November 16, 2018, Connecticut Water Service (CTWS) announced that its shareholders overwhelmingly voted to approve the Company’s proposed merger agreement with SJW Group (SJW).

Closed Deals:

  1. The acquisition of magicJack VocalTec (CALL) by B. Riley Financial (RILY) on November 14, 2018. It took 370 days for this deal to be completed.
  2. The acquisition of Gulfmark Offshore (GLF) by Tidewater (TDW) on November 15, 2018. It took 122 days for this deal to be completed.
  3. The acquisition of Anchor Bancorp (ANCB) by FS Bancorp (FSBW) on November 16, 2018. It took 122 days for this deal to be completed.
  4. The acquisition of LifePoint Health (LPNT) by funds managed by affiliates of Apollo Global Management, LLC on November 16, 2018. It took 116 days for this deal to be completed.
  5. The acquisition of KMG Chemicals (KMG) by Cabot Microelectronics Corporation (CCMP) on November 16, 2018. It took 93 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
INUV 11/05/2018 ConversionPoint Technologies, Inc. (N/A) $2.22 $1.18 03/31/2019 88.14% 243.71%
TAHO 11/14/2018 Pan American Silver Corp. (PAAS) $4.10 $3.29 03/31/2019 24.62% 68.08%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $10.85 12/31/2018 24.42% 212.26%
KANG 03/26/2018 IK Healthcare Investment Limited (N/A) $20.60 $16.72 10/31/2018 23.21% -445.79%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.58 12/01/2018 18.56% 564.50%
ORBK 03/19/2018 KLA-Tencor Corporation (KLAC) $63.09 $54.45 12/31/2018 15.86% 137.82%
SCG 01/03/2018 Dominion Energy, Inc. (D) $49.25 $42.96 12/31/2018 14.63% 127.14%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.09 $6.31 06/30/2019 12.38% 20.26%
RSYS 07/02/2018 Reliance Industries Limited (N/A) $1.72 $1.54 12/31/2018 11.69% 101.58%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $175.59 01/08/2019 10.91% 79.61%

List of all pending deals:

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

Disclaimer: I hold positions in Finisar (FNSR), Rockwell Collins (COL), Pandora (P) and Radisys (RSYS). 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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