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Merger Arbitrage Mondays – Sotheby’s Catches a Bid

  • June 24, 2019

Merger activity remained steady 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 were three new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 201993
Total Number of Deals Not Completed in 20197
Total Number of Pending Deals
Cash Deals35
Stock Deals17
Stock & Cash Deals13
Special Conditions2
Total Number of Pending Deals67
Total Deal Size$995.54 billion

New Deals:

  1. The acquisition of LegacyTexas Financial Group (LTXB) by Prosperity Bancshares (PB) for $2.1 billion in a cash plus stock deal. Under the terms of the merger agreement, stockholders of LegacyTexas will receive 0.5280 shares of Prosperity common stock and $6.28 cash for each LegacyTexas share.
  2. The acquisition of Array BioPharma (ARRY) by Pfizer (PFE) for $11.4 billion or $48.00 per share in cash.
  3. The acquisition of C&J Energy Services (CJ) by Keane Group (FRAC) for $666.6 million in an all stock deal. Under the terms of the agreement, C&J shareholders will receive 1.6149 shares of Keane common stock for each share of C&J common stock owned. The merger agreement permits C&J to pay its shareholders a cash dividend of $1.00 per share prior to closing. This is an all-stock deal but we are treating it as a cash plus stock deal because of the $1 per share pre-merger dividend.
  4. The acquisition of Sotheby’s (BID) by BidFair USA for $3.7 billion or $57.00 per share in cash.

Deal Updates:

  1. On June 17, 2019, Versum Materials (VSM) announced that the stockholders of Versum have approved the merger with Merck KGaA, Darmstadt, Germany.
  2. On June 18, 2019, The Competition and Markets Authority of the United Kingdom announced the completion of its Phase 1 review of the Merger between Pacific Biosciences of California (PACB) Illumina (ILMN) and that it will refer the Merger for a Phase 2 review if the Company and Illumina are unable to address the CMA’s concerns. The companies now expect the merger to be completed in the fourth quarter of 2019 instead of the previously announced end of second quarter 2019 date.
  3. On June 20, 2019, Harris Corp (HRS) and L3 Technologies (LLLwon U.S. antitrust approval for their merger. On June 21, 2019, Harris Corp (HRSwon European Union approval for the acquisition of L3 Technologies (LLL) on the condition that Harris sells its night vision global business and announced that they have received the necessary regulatory approvals for their all-stock merger and have set a closing date of June 29, 2019.
  4. On June 20, 2019, The U.S. Justice Department said that it had filed a lawsuit aimed at stopping Quad/Graphics (QUAD) from buying LSC Communications (LKSD).

Failed Deals:

  1. On June 21, 2019, Inuvo (INUV) announced that it has mutually agreed with ConversionPoint Technologies to terminate the previously announced agreement under which ConversionPoint was to acquire Inuvo.

Closed Deals:

  1. The acquisition of Quantenna Communications (QTNA) by ON Semiconductor Corporation (ON) on June 19, 2019. It took 84 days for this deal to be completed.
  2. The acquisition of Smart & Final Stores (SFS) by Apollo Global Management (APO) on June 20, 2019. It took 65 days for this deal to be completed.
  3. The acquisition of Mogo Finance Technology (MOGO) by Difference Capital Financial (DCF.TO) on June 21, 2019. It took 67 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
GNW10/23/2016China Oceanwide Holdings Group Co., Ltd. (N/A)$5.43$3.6706/30/201947.96%2500.58%
PACB11/01/2018Illumina, Inc. (ILMN)$8.00$6.2312/31/201928.41%54.29%
STC03/19/2018Fidelity National Financial, Inc. (FNF)$51.19$41.206/30/201924.24%1264.12%
LKSD10/31/2018Quad/Graphics, Inc. (QUAD)$5.70$4.730006/30/201920.51%1069.31%
AVP05/22/2019Natura Cosméticos S.A. (NATU3.SA)$4.65$3.9501/31/202017.60%28.93%
S04/29/2018T-Mobile US, Inc. (TMUS)$7.76$6.8707/29/201913.01%131.91%
MLNX03/11/2019NVIDIA Corporation (NVDA)$125.00$111.4912/31/201912.12%23.16%
ONCE02/25/2019Roche Holding AG (RHHBY)$114.50$105.0706/30/20198.97%467.98%
CY06/02/2019Infineon Technologies AG (IFNNY)$23.85$22.1701/31/20207.58%12.46%
PNTR03/15/2019I.D. Systems, Inc. (IDSY)$15.90$14.8606/30/20197.02%366.00%

List of all pending deals:

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

SymbolAnnounced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
VolumeClosing
Date
ProfitAnnu.
Profit
+GNW10/23/2016China Oceanwide Holdings Group Co., Ltd. (N/A)All Cash$2.7 billion$5.43$3.6710,637,34406/30/201947.96%2917.35%
+PACB11/01/2018Illumina, Inc. (ILMN)All Cash$742.9 million$8.00$6.233,402,62912/31/201928.41%54.58%
+STC03/19/2018Fidelity National Financial, Inc. (FNF)Cash Plus Stock$1.2 billion$51.19$41.2144,93906/30/201924.24%1474.81%
+LKSD10/31/2018Quad/Graphics, Inc. (QUAD)All Stock$1.4 billion$5.70$4.73003,040,59706/30/201920.51%1247.53%
+AVP05/22/2019Natura Cosméticos S.A. (NATU3.SA)All Stock$3.7 billion$4.65$3.957,620,51801/31/202017.60%29.06%
+S04/29/2018T-Mobile US, Inc. (TMUS)All Stock$59 billion$7.76$6.8727,844,16507/29/201913.01%135.68%
+MLNX03/11/2019NVIDIA Corporation (NVDA)All Cash$6.9 billion$125.00$111.49304,13712/31/201912.12%23.28%
+ONCE02/25/2019Roche Holding AG (RHHBY)All Cash$4.8 billion$114.50$105.07747,25806/30/20198.97%545.98%
+CY06/02/2019Infineon Technologies AG (IFNNY)All Cash$9.56 billion$23.85$22.1716,116,03101/31/20207.58%12.52%
+PNTR03/15/2019I.D. Systems, Inc. (IDSY)Cash Plus Stock$140 million$15.90$14.8635,31906/30/20197.02%427.00%
+ZAYO05/08/2019affiliates of Digital Colony Partners and EQT Infrastructure IV fund (N/A)All Cash$14.3 billion$35.00$33.042,939,52606/30/20205.93%5.82%
+APC05/09/2019Occidental Petroleum Corporation (OXY)Cash Plus Stock$57 billion$73.85$70.316,350,97712/31/20195.03%9.67%
+FNSR11/09/2018II-VI Incorporated (IIVI)Cash Plus Stock$2.15 billion$23.38$22.42,047,24509/30/20194.37%16.27%
+UQM01/21/2019Danfoss Power Solutions (US) Company (N/A)All Cash$100 million$1.71$1.64216,80807/15/20194.27%74.19%
+EE06/03/2019J.P. Morgan Investment Management Inc. (N/A)All Cash$4.3 billion$68.25$65.52571,34406/30/20204.17%4.09%
+TST06/12/2019TheMaven Inc. (N/A)Special Conditions$33.75 million$6.33$6.0819,24109/30/20194.11%15.31%
+ARRY06/17/2019Pfizer Inc. (PFE)All Cash$11.4 billion$48.00$46.28,680,10412/31/20193.90%7.48%
+WCG03/27/2019Centene Corporation (CNC)Cash Plus Stock17.3 billion$310.53$299.29598,18606/30/20203.76%3.69%
+MBTF10/10/2018First Merchants Corporation (FRME)All Stock$290.9 million$9.94$9.6504,83706/30/20193.55%216.24%
+ADSW04/15/2019Waste Management, Inc. (WM)All Cash$4.9 billion$33.15$32.111,893,28503/31/20203.24%4.21%
+WBC03/28/2019ZF Friedrichshafen AG (N/A)All Cash$7.29 billion$136.50$132.35310,91703/31/20203.14%4.07%
+WP03/18/2019Fidelity National Information Services, Inc. (FIS)Cash Plus Stock$43 billion$124.95$121.411,771,03212/31/20192.92%5.60%
+IMI05/06/2019Merck KGaA (N/A)All Cash$28.5 million$1.20$1.1727,92212/31/20192.56%4.93%
+SSFN06/07/2019Columbia Financial, Inc. (CLBK)All Cash$271.02 million$15.75$15.489,22312/31/20192.27%4.37%
+VSM04/12/2019Merck KGaA (N/A)All Cash$6.4 billion$53.00$51.851,240,72512/31/20192.22%4.26%
+ENFC04/24/2019First Citizens BancShares, Inc. (FCNCA)All Cash$219.8 million$30.18$29.6715,00112/31/20191.72%3.30%
+AQ05/06/2019Marvell Technology Group Ltd. (MRVL)All Cash$452 million$13.25$13.04357,09612/31/20191.61%3.09%
+BPL05/10/2019IFM Global Infrastructure Fund (N/A)All Cash$10.3 billion$41.50$40.851,189,13012/31/20191.59%3.06%
+MDSO06/11/2019Dassault Systèmes (N/A)All Cash$5.8 billion$92.25$90.881,224,50012/31/20191.51%2.90%
+FDC01/16/2019Fiserv, Inc. (FISV)All Stock$22 billion$27.72$27.332,529,18912/31/20191.42%2.73%
+RHT10/28/2018IBM (IBM)All Cash$34 billion$190.00$187.552,766,97712/31/20191.31%2.51%
+DATA06/10/2019salesforce.com, inc. (CRM)All Stock$15.7 billion$172.99$170.86813,27810/31/20191.25%3.53%
+SFLY06/10/2019Funds Managed by Affiliates of Apollo Global Management (N/A)All Cash$2.7 billion$51.00$50.4783,55010/31/20191.19%3.37%
+TSS05/28/2019Global Payments Inc. (GPN)All Stock$21.5 billion$130.46$128.931,374,53512/31/20191.19%2.28%
+CRAY05/17/2019Hewlett Packard Enterprise (HPE)All Cash$1.3 billion$35.00$34.62474,16401/31/20201.10%1.81%
+LTXB06/17/2019Prosperity Bancshares, Inc. (PB)Cash Plus Stock$2.1 billion$40.23$39.79524,70212/31/20191.09%2.10%
+CTWS03/15/2018SJW Group (SJW)All Cash$1.06 billion$70.00$69.2628,61406/30/20191.07%65.00%
+STI02/07/2019BB&T Corporation (BBT)All Stock$66 billion$62.98$62.332,863,04912/31/20191.04%1.99%
+AMID03/18/2019ArcLight Energy Partners Fund (N/A)All Cash$2.03 billion$5.25$5.2390,90506/30/20190.96%58.49%
+CJ06/17/2019Keane Group, Inc. (FRAC)Cash Plus Stock$666.6 million$13.00$12.881,340,25412/31/20190.92%1.77%
+HFBC01/07/2019First Financial Corporation (THFF)Special Conditions$128.3 million$20.05$19.875,73806/30/20190.91%55.11%
+TCF01/28/2019Chemical Financial Corporation (CHFC)All Stock$5 billion$20.04$19.871,955,91310/31/20190.88%2.49%
+BRSS04/10/2019Wieland-Werke AG (N/A)All Cash$1.2 billion$44.00$43.67151,66012/31/20190.76%1.45%
+ANDX05/08/2019MPLX LP (MPLX)All Stock$14.41 billion$36.88$36.62714,23012/31/20190.70%1.34%
+CTRL05/09/2019SnapAV (N/A)All Cash$680 million$23.91$23.75425,75712/31/20190.67%1.29%
+LEXEA04/16/2019Expedia Group, Inc. (EXPE)All Stock$19.4 billion$46.97$46.74244,43706/30/20190.50%30.30%
+ISCA05/22/2019NASCAR Holdings, Inc. (N/A)All Cash$2 billion$45.00$44.78174,39212/31/20190.49%0.94%
+CELG01/03/2019Bristol-Myers Squibb Company (BMY)Cash Plus Stock$74 billion$99.34$98.913,935,24009/30/20190.43%1.62%
+DNBF06/05/2019S&T Bancorp, Inc. (STBA)All Stock$206 million$45.26$45.125,16212/31/20190.36%0.69%
+EFII04/15/2019an affiliate of Siris Capital Group, LLC (N/A)All Cash$1.7 billion$37.00$36.88233,02109/30/20190.33%1.21%
+TRCO12/03/2018Nexstar Media Group, Inc. (NXST)All Cash$6.4 billion$46.50$46.371,074,94009/30/20190.28%1.04%
+AMBR05/13/2019E2open (N/A)All Cash$425 million$13.05$13.02570,20909/30/20190.23%0.86%
+ISRL05/20/2019Naphtha Israel Petroleum Corporation Ltd. (N/A)All Cash$393.11 million$121.40$121.1585612/31/20190.21%0.40%
+CHSP05/06/2019Park Hotels & Resorts Inc. (PK)Cash Plus Stock$2.7 billion$28.72$28.68420,36611/15/20190.13%0.32%
+HF03/19/2019Jones Lang LaSalle Incorporated (JLL)Cash Plus Stock$2 billion$45.63$45.58189,20709/30/20190.11%0.43%
+LLL10/14/2018Harris Corporation (HRS)All Stock$18.42 billion$256.39$256.23651,52206/29/20190.06%4.44%
+LABL02/25/2019affiliate of Platinum Equity LLC (N/A)All Cash$2.5 billion$50.00$49.9782,06509/30/20190.06%0.22%
+EMCI05/09/2019Employers Mutual Casualty Company (N/A)All Cash$791 million$36.00$36.0211,10312/31/2019-0.06%-0.11%
+MSL04/30/2019Hancock Whitney Corporation (HWC)All Stock$101.79 million$11.59$11.658,60109/30/2019-0.06%-0.24%
+LION12/17/2018Ameris Bancorp (ABCB)All Stock$750.7 million$30.20$30.2857,69906/30/2019-0.26%-16.07%
+CZFC02/21/2019German American Bancorp, Inc. (GABC)Cash Plus Stock$69.51 million$25.12$25.213,75209/30/2019-0.37%-1.38%
+PETX04/26/2019Elanco Animal Health Incorporated (ELAN)All Stock$245 million$5.00$5.04438,02912/31/2019-0.88%-1.70%
+SXCP02/05/2019SunCoke Energy, Inc. (SXC)All Stock$1.52 billion$11.51$11.72310,88608/31/2019-1.81%-9.71%
+APU04/02/2019UGI Corporation (UGI)Cash Plus Stock$6.66 billion$34.56$35.33495,69909/30/2019-2.19%-8.17%
+BID06/17/2019BidFair USA (N/A)All Cash$3.7 billion$57.00$58.923,229,49512/31/2019-3.26%-6.26%
+BKS06/07/2019funds advised by Elliott Advisors (UK) Limited (N/A)All Cash$683 million$6.50$6.81,620,84009/30/2019-4.41%-16.43%
+SHOS06/03/2019Transform Holdco LLC (N/A)All Cash$171.74 million$2.25$2.5645,29711/02/2019-12.11%-33.74%

Disclaimer: I hold long positions in Pacific Biosciences of California (PACB), Red Hat (RHT), Celgene (CELG), Bristol-Myers Squibb (BMY) and Finisar (FNSR). 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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