Merger Arbitrage Mondays – December 17, 2018

Merger activity increased last week with five 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 165
Total Number of Deals Not Completed in 2018 14
Total Number of Pending Deals
Cash Deals 45
Stock Deals 31
Stock & Cash Deals 14
Special Conditions 6
Total Number of Pending Deals 96
Total Deal Size $1.38 trillion

New Deals:

  1. The acquisition of Nutrisystem (NTRI) by Tivity Health (TVTY) for $1.4 billion in a cash plus stock deal. Under the terms of the merger agreement, each outstanding share of Nutrisystem stock will be exchanged for $38.75 in cash and 0.2141 shares of Tivity Health common stock.
  2. The acquisition of Travelport Worldwide Limited (TVPT) by affiliates of Siris Capital Group for $4.4 billion or $15.75 per share in cash. We added TVPT as a potential deal to the Deals in the Works section on December 06, 2018 and the price after the news of the potential deal came out was $15.72.
  3. The acquisition of SI Financial Group (SIFI) by Berkshire Hills Bancorp (BHLB) for $180 million in an all stock deal. Under the terms of the merger agreement, each outstanding share of SIFI common stock will be exchanged for 0.48 shares of Berkshire Hills common stock.
  4. The acquisition of Sparton Corporation (SPA) by an affiliate of Cerberus Capital Management for $254 million or $18.50 per share in cash. We added SPA as a potential deal to the Deals in the Works section on June 26, 2017 and the price after the news of the potential deal came out was $22.76.
  5. The acquisition of Belmond (BEL) by LVMH Moët Hennessy Louis Vuitton for $3.2 billion or $25.00 per share in cash. We added BEL as a potential deal to the Deals in the Works section on October 02, 2018 and the price after the news of the potential deal came out was $18.04.

Deal Updates:

  1. On December 10, 2018, Enbridge Energy Partners (EEP) and Enbridge Energy Management (EEQ) announced that they will hold special meetings of EEP unitholders and EEQ shareholders, respectively, on December 17, 2018.
  2. On December 11, 2018, Select Income REIT (SIR) announced that it has set the record date for the distribution of all its 45 million common shares of beneficial interest of Industrial Logistics Properties Trust (ILPT) that it owns in a pro rata distribution to the holders of SIR’s common shares of beneficial interest outstanding as of the close of business on December 20, 2018.
  3. On December 11, 2018, Dell Technologies said that it has received shareholder approval for its earlier announced deal to buy back shares tied to its interest in VMware (DVMT), paving the way for it to return to the market.
  4. On December 11, 2018, Harris Corporation (HRSwithdrew and re-filed its HSR Notification with respect to its merger with L3 Technologies (LLL) on December 11, 2018. The waiting period under the HSR Act currently is scheduled to expire on January 10, 2019. Harris and L3 continue to expect the Merger to close in mid-calendar year 2019.
  5. On December 11, 2018, Hydro One Limited (H) and Avista Corporation (AVA) announced that they will file a petition no later than December 17, 2018 with the Washington Utilities and Transportation Commission requesting the UTC to reconsider its December 5, 2018 order denying approval of Hydro One’s acquisition of Avista.
  6. On December 12, 2018,  WSFS Financial Corporation (WSFS) announced that its stockholders overwhelmingly approved the previously announced merger of Beneficial Bancorp (BNCL).
  7. On December 13, 2018, The State of New York determined that a previously noticed hearing in that State was not required and issued its approval of the transaction between Express Scripts Holding Company (ESRX) and Cigna Corporation (CI). Also on December 13, 2018, the State of California issued its approval of the transaction.
  8. On December 14, 2018, South Carolina’s Public Service Commission approved Dominion Energy’s (D) offer to buy SCANA (SCG).

Closed Deals:

  1. The acquisition of Oclaro (OCLR) by Lumentum Holdings (LITE) on December 10, 2018. It took 273 days for this deal to be completed.
  2. The acquisition of Radisys Corporation (RSYS) by Reliance Industries Limited on December 11, 2018. It took 162 days for this deal to be completed.
  3. The acquisition of Keryx Biopharmaceuticals (KERX) by Akebia Therapeutics (AKBA) on December 12, 2018. It took 167 days for this deal to be completed.
  4. The acquisition of Datawatch Corporation (DWCH) by Altair (ALTR) on December 13, 2018. It took 38 days for this deal to be completed.
  5. The acquisition of Navios Maritime Midstream Partners (NAP) by Navios Maritime Acquisition Corporation (NNA) on December 14, 2018. It took 67 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 $1.1567 03/31/2019 91.93% 322.62%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $10.43 12/31/2018 29.43% 767.39%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.45 01/31/2019 22.02% 178.63%
AVA 07/19/2017 Hydro One Limited (N/A) $53.00 $45 03/29/2019 17.78% 63.62%
DVMT 07/02/2018 Dell (N/A) $120.00 $105.79 12/31/2018 13.43% 350.20%
TAHO 11/14/2018 Pan American Silver Corp. (PAAS) $4.10 $3.62 03/31/2019 13.26% 46.54%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $6.73 $5.97 06/30/2019 12.78% 23.92%
PGLC 09/30/2018 Americas Silver Corporation (USAS) $0.98 $0.872 03/31/2019 12.33% 43.29%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (TKPYY) $194.74 $174.95 01/08/2019 11.31% 187.67%
STC 03/16/2018 Fidelity National Financial, Inc. (FNF) $45.25 $41.17 06/30/2019 9.91% 18.56%

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) and Pandora (P). 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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