Merger Arbitrage Mondays – Cisco’s Acquisition of Acacia Trades At A 9% Discount

Merger activity remained steady last week with three new deals announced and one pending deal 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 2019 101
Total Number of Deals Not Completed in 2019 7
Total Number of Pending Deals
Cash Deals 44
Stock Deals 16
Stock & Cash Deals 14
Special Conditions 3
Total Number of Pending Deals 77
Total Deal Size $1.09 trillion

New Deals:

  1. The acquisition of Acacia Communications (ACIA) by Cisco Systems (CSCO) for $2.6 billion or $70.00 per share in cash. The spread for an all cash deal of this type that does not list China as one of its regulatory risks is unusually large at 8.7%.
  2. The acquisition of Milacron Holdings (MCRN) by Hillenbrand (HI) for $2 billion in a cash plus stock deal. Under the terms of the agreement, Milacron stockholders will receive $11.80 in cash and a fixed exchange ratio of 0.1612 shares of Hillenbrand common stock for each share of Milacron common stock they own.
  3. The acquisition of Tower International (TOWR) by Autokiniton Global Group for $900 million or $31.00 per share in cash.

Deal Updates:

  1. On July 8, 2019, Roche and Spark Therapeutics (ONCEagreed to extend the deadline for the takeover bid. The new deadline for both companies to extend the merger agreement is now April 30, 2020, rather than January 31, 2020.
  2. On July 8, 2019, Fidelity National Information Services (FISwon unconditional EU antitrust approval for its takeover of payments company Worldpay (WP).
  3. On July 9, 2019, Chesapeake Lodging Trust (CHSP) announced that its board of trustees has determined that the special meeting of shareholders will be held on Tuesday, September 10, 2019.
  4. On July 10, 2019, Sotheby’s (BIDreceived early termination of the Hart-Scott-Rodino Act.
  5. On July 10, 2019, Barnes & Noble (BKS) announced that the 15 calendar day waiting period under the HSR Act has expired. Accordingly, the condition of the Offer relating to the expiration or termination of the HSR Act waiting period has been satisfied.
  6. On July 11, 2019, Anadarko Petroleum Corporation (APC) announced that its special meeting of shareholders will be held on August 8, 2019.
  7. July 11, 2019: According to The Wall Street Journal, negotiations to complete the merger of T-Mobile US (TMUS) and Sprint (S) are dragging on as the parties haggle over ownership restrictions and other conditions for Dish Network Corp. once it gets assets from the wireless companies.

Closed Deals:

  1. The acquisition of Red Hat (RHT) by IBM (IBM) on July 9, 2019. It took 253 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.92 11/30/2019 38.52% 101.88%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $5.94 12/31/2019 34.68% 74.90%
LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) $5.08 $3.78 06/30/2019 34.42% -837.67%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $51.76 $40.1 09/30/2019 29.08% 137.84%
ONCE 02/25/2019 Roche Holding AG (RHHBY) $114.50 $98.05 04/30/2020 16.78% 21.12%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.15 $7.1 07/29/2019 14.77% 384.97%
AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) $4.42 $3.89 01/31/2020 13.60% 24.82%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $112.05 12/31/2019 11.56% 24.96%
AGN 06/25/2019 AbbVie Inc. (ABBV) $181.16 $165.85 03/31/2020 9.23% 12.96%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $64.4 07/31/2020 8.70% 8.31%

List of all pending deals:

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

Disclaimer: I hold long positions in Mellanox Technologies (MLNX), Pacific Biosciences of California (PACB), 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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