Merger Arbitrage Mondays – Sotheby’s Catches a Bid

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 2019 93
Total Number of Deals Not Completed in 2019 7
Total Number of Pending Deals
Cash Deals 35
Stock Deals 17
Stock & Cash Deals 13
Special Conditions 2
Total Number of Pending Deals 67
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:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.67 06/30/2019 47.96% 2500.58%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $6.23 12/31/2019 28.41% 54.29%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $51.19 $41.2 06/30/2019 24.24% 1264.12%
LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) $5.70 $4.7300 06/30/2019 20.51% 1069.31%
AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) $4.65 $3.95 01/31/2020 17.60% 28.93%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.76 $6.87 07/29/2019 13.01% 131.91%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $111.49 12/31/2019 12.12% 23.16%
ONCE 02/25/2019 Roche Holding AG (RHHBY) $114.50 $105.07 06/30/2019 8.97% 467.98%
CY 06/02/2019 Infineon Technologies AG (IFNNY) $23.85 $22.17 01/31/2020 7.58% 12.46%
PNTR 03/15/2019 I.D. Systems, Inc. (IDSY) $15.90 $14.86 06/30/2019 7.02% 366.00%

List of all pending deals:

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

Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing
Date
Profit Annu.
Profit
+ GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) All Cash $2.7 billion $5.43 $3.67 10,637,344 06/30/2019 47.96% 2917.35%
+ PACB 11/01/2018 Illumina, Inc. (ILMN) All Cash $742.9 million $8.00 $6.23 3,402,629 12/31/2019 28.41% 54.58%
+ STC 03/19/2018 Fidelity National Financial, Inc. (FNF) Cash Plus Stock $1.2 billion $51.19 $41.2 144,939 06/30/2019 24.24% 1474.81%
+ LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) All Stock $1.4 billion $5.70 $4.7300 3,040,597 06/30/2019 20.51% 1247.53%
+ AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) All Stock $3.7 billion $4.65 $3.95 7,620,518 01/31/2020 17.60% 29.06%
+ S 04/29/2018 T-Mobile US, Inc. (TMUS) All Stock $59 billion $7.76 $6.87 27,844,165 07/29/2019 13.01% 135.68%
+ MLNX 03/11/2019 NVIDIA Corporation (NVDA) All Cash $6.9 billion $125.00 $111.49 304,137 12/31/2019 12.12% 23.28%
+ ONCE 02/25/2019 Roche Holding AG (RHHBY) All Cash $4.8 billion $114.50 $105.07 747,258 06/30/2019 8.97% 545.98%
+ CY 06/02/2019 Infineon Technologies AG (IFNNY) All Cash $9.56 billion $23.85 $22.17 16,116,031 01/31/2020 7.58% 12.52%
+ PNTR 03/15/2019 I.D. Systems, Inc. (IDSY) Cash Plus Stock $140 million $15.90 $14.86 35,319 06/30/2019 7.02% 427.00%
+ ZAYO 05/08/2019 affiliates of Digital Colony Partners and EQT Infrastructure IV fund (N/A) All Cash $14.3 billion $35.00 $33.04 2,939,526 06/30/2020 5.93% 5.82%
+ APC 05/09/2019 Occidental Petroleum Corporation (OXY) Cash Plus Stock $57 billion $73.85 $70.31 6,350,977 12/31/2019 5.03% 9.67%
+ FNSR 11/09/2018 II-VI Incorporated (IIVI) Cash Plus Stock $2.15 billion $23.38 $22.4 2,047,245 09/30/2019 4.37% 16.27%
+ UQM 01/21/2019 Danfoss Power Solutions (US) Company (N/A) All Cash $100 million $1.71 $1.64 216,808 07/15/2019 4.27% 74.19%
+ EE 06/03/2019 J.P. Morgan Investment Management Inc. (N/A) All Cash $4.3 billion $68.25 $65.52 571,344 06/30/2020 4.17% 4.09%
+ TST 06/12/2019 TheMaven Inc. (N/A) Special Conditions $33.75 million $6.33 $6.08 19,241 09/30/2019 4.11% 15.31%
+ ARRY 06/17/2019 Pfizer Inc. (PFE) All Cash $11.4 billion $48.00 $46.2 8,680,104 12/31/2019 3.90% 7.48%
+ WCG 03/27/2019 Centene Corporation (CNC) Cash Plus Stock 17.3 billion $310.53 $299.29 598,186 06/30/2020 3.76% 3.69%
+ MBTF 10/10/2018 First Merchants Corporation (FRME) All Stock $290.9 million $9.94 $9.6 504,837 06/30/2019 3.55% 216.24%
+ ADSW 04/15/2019 Waste Management, Inc. (WM) All Cash $4.9 billion $33.15 $32.11 1,893,285 03/31/2020 3.24% 4.21%
+ WBC 03/28/2019 ZF Friedrichshafen AG (N/A) All Cash $7.29 billion $136.50 $132.35 310,917 03/31/2020 3.14% 4.07%
+ WP 03/18/2019 Fidelity National Information Services, Inc. (FIS) Cash Plus Stock $43 billion $124.95 $121.41 1,771,032 12/31/2019 2.92% 5.60%
+ IMI 05/06/2019 Merck KGaA (N/A) All Cash $28.5 million $1.20 $1.17 27,922 12/31/2019 2.56% 4.93%
+ SSFN 06/07/2019 Columbia Financial, Inc. (CLBK) All Cash $271.02 million $15.75 $15.4 89,223 12/31/2019 2.27% 4.37%
+ VSM 04/12/2019 Merck KGaA (N/A) All Cash $6.4 billion $53.00 $51.85 1,240,725 12/31/2019 2.22% 4.26%
+ ENFC 04/24/2019 First Citizens BancShares, Inc. (FCNCA) All Cash $219.8 million $30.18 $29.67 15,001 12/31/2019 1.72% 3.30%
+ AQ 05/06/2019 Marvell Technology Group Ltd. (MRVL) All Cash $452 million $13.25 $13.04 357,096 12/31/2019 1.61% 3.09%
+ BPL 05/10/2019 IFM Global Infrastructure Fund (N/A) All Cash $10.3 billion $41.50 $40.85 1,189,130 12/31/2019 1.59% 3.06%
+ MDSO 06/11/2019 Dassault Systèmes (N/A) All Cash $5.8 billion $92.25 $90.88 1,224,500 12/31/2019 1.51% 2.90%
+ FDC 01/16/2019 Fiserv, Inc. (FISV) All Stock $22 billion $27.72 $27.33 2,529,189 12/31/2019 1.42% 2.73%
+ RHT 10/28/2018 IBM (IBM) All Cash $34 billion $190.00 $187.55 2,766,977 12/31/2019 1.31% 2.51%
+ DATA 06/10/2019 salesforce.com, inc. (CRM) All Stock $15.7 billion $172.99 $170.86 813,278 10/31/2019 1.25% 3.53%
+ SFLY 06/10/2019 Funds Managed by Affiliates of Apollo Global Management (N/A) All Cash $2.7 billion $51.00 $50.4 783,550 10/31/2019 1.19% 3.37%
+ TSS 05/28/2019 Global Payments Inc. (GPN) All Stock $21.5 billion $130.46 $128.93 1,374,535 12/31/2019 1.19% 2.28%
+ CRAY 05/17/2019 Hewlett Packard Enterprise (HPE) All Cash $1.3 billion $35.00 $34.62 474,164 01/31/2020 1.10% 1.81%
+ LTXB 06/17/2019 Prosperity Bancshares, Inc. (PB) Cash Plus Stock $2.1 billion $40.23 $39.79 524,702 12/31/2019 1.09% 2.10%
+ CTWS 03/15/2018 SJW Group (SJW) All Cash $1.06 billion $70.00 $69.26 28,614 06/30/2019 1.07% 65.00%
+ STI 02/07/2019 BB&T Corporation (BBT) All Stock $66 billion $62.98 $62.33 2,863,049 12/31/2019 1.04% 1.99%
+ AMID 03/18/2019 ArcLight Energy Partners Fund (N/A) All Cash $2.03 billion $5.25 $5.2 390,905 06/30/2019 0.96% 58.49%
+ CJ 06/17/2019 Keane Group, Inc. (FRAC) Cash Plus Stock $666.6 million $13.00 $12.88 1,340,254 12/31/2019 0.92% 1.77%
+ HFBC 01/07/2019 First Financial Corporation (THFF) Special Conditions $128.3 million $20.05 $19.87 5,738 06/30/2019 0.91% 55.11%
+ TCF 01/28/2019 Chemical Financial Corporation (CHFC) All Stock $5 billion $20.04 $19.87 1,955,913 10/31/2019 0.88% 2.49%
+ BRSS 04/10/2019 Wieland-Werke AG (N/A) All Cash $1.2 billion $44.00 $43.67 151,660 12/31/2019 0.76% 1.45%
+ ANDX 05/08/2019 MPLX LP (MPLX) All Stock $14.41 billion $36.88 $36.62 714,230 12/31/2019 0.70% 1.34%
+ CTRL 05/09/2019 SnapAV (N/A) All Cash $680 million $23.91 $23.75 425,757 12/31/2019 0.67% 1.29%
+ LEXEA 04/16/2019 Expedia Group, Inc. (EXPE) All Stock $19.4 billion $46.97 $46.74 244,437 06/30/2019 0.50% 30.30%
+ ISCA 05/22/2019 NASCAR Holdings, Inc. (N/A) All Cash $2 billion $45.00 $44.78 174,392 12/31/2019 0.49% 0.94%
+ CELG 01/03/2019 Bristol-Myers Squibb Company (BMY) Cash Plus Stock $74 billion $99.34 $98.91 3,935,240 09/30/2019 0.43% 1.62%
+ DNBF 06/05/2019 S&T Bancorp, Inc. (STBA) All Stock $206 million $45.26 $45.1 25,162 12/31/2019 0.36% 0.69%
+ EFII 04/15/2019 an affiliate of Siris Capital Group, LLC (N/A) All Cash $1.7 billion $37.00 $36.88 233,021 09/30/2019 0.33% 1.21%
+ TRCO 12/03/2018 Nexstar Media Group, Inc. (NXST) All Cash $6.4 billion $46.50 $46.37 1,074,940 09/30/2019 0.28% 1.04%
+ AMBR 05/13/2019 E2open (N/A) All Cash $425 million $13.05 $13.02 570,209 09/30/2019 0.23% 0.86%
+ ISRL 05/20/2019 Naphtha Israel Petroleum Corporation Ltd. (N/A) All Cash $393.11 million $121.40 $121.15 856 12/31/2019 0.21% 0.40%
+ CHSP 05/06/2019 Park Hotels & Resorts Inc. (PK) Cash Plus Stock $2.7 billion $28.72 $28.68 420,366 11/15/2019 0.13% 0.32%
+ HF 03/19/2019 Jones Lang LaSalle Incorporated (JLL) Cash Plus Stock $2 billion $45.63 $45.58 189,207 09/30/2019 0.11% 0.43%
+ LLL 10/14/2018 Harris Corporation (HRS) All Stock $18.42 billion $256.39 $256.23 651,522 06/29/2019 0.06% 4.44%
+ LABL 02/25/2019 affiliate of Platinum Equity LLC (N/A) All Cash $2.5 billion $50.00 $49.97 82,065 09/30/2019 0.06% 0.22%
+ EMCI 05/09/2019 Employers Mutual Casualty Company (N/A) All Cash $791 million $36.00 $36.02 11,103 12/31/2019 -0.06% -0.11%
+ MSL 04/30/2019 Hancock Whitney Corporation (HWC) All Stock $101.79 million $11.59 $11.6 58,601 09/30/2019 -0.06% -0.24%
+ LION 12/17/2018 Ameris Bancorp (ABCB) All Stock $750.7 million $30.20 $30.28 57,699 06/30/2019 -0.26% -16.07%
+ CZFC 02/21/2019 German American Bancorp, Inc. (GABC) Cash Plus Stock $69.51 million $25.12 $25.21 3,752 09/30/2019 -0.37% -1.38%
+ PETX 04/26/2019 Elanco Animal Health Incorporated (ELAN) All Stock $245 million $5.00 $5.04 438,029 12/31/2019 -0.88% -1.70%
+ SXCP 02/05/2019 SunCoke Energy, Inc. (SXC) All Stock $1.52 billion $11.51 $11.72 310,886 08/31/2019 -1.81% -9.71%
+ APU 04/02/2019 UGI Corporation (UGI) Cash Plus Stock $6.66 billion $34.56 $35.33 495,699 09/30/2019 -2.19% -8.17%
+ BID 06/17/2019 BidFair USA (N/A) All Cash $3.7 billion $57.00 $58.92 3,229,495 12/31/2019 -3.26% -6.26%
+ BKS 06/07/2019 funds advised by Elliott Advisors (UK) Limited (N/A) All Cash $683 million $6.50 $6.8 1,620,840 09/30/2019 -4.41% -16.43%
+ SHOS 06/03/2019 Transform Holdco LLC (N/A) All Cash $171.74 million $2.25 $2.56 45,297 11/02/2019 -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.

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

2 Comments

  1. GeorgeCiardi
    June 24, 2019 at 8:41 am

    Thank you for the new separate “Failed Deal” section. Nice addition.

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