Merger Arbitrage Mondays – Twelve New Deals Wrap Up a Blockbuster Quarter For Mergers

Merger activity went on a tear last week with twelve 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 94
Total Number of Deals Not Completed in 2019 7
Total Number of Pending Deals
Cash Deals 43
Stock Deals 18
Stock & Cash Deals 15
Special Conditions 2
Total Number of Pending Deals 78
Total Deal Size $1.08 trillion

New Deals:

  1. The acquisition of Caesars Entertainment Corporation (CZR) by Eldorado Resorts (ERI) for $17.3 billion in a cash plus stock deal. Under the terms of the agreement, Eldorado will acquire all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares of Eldorado common stock for each Caesars share of common stock.
  2. The acquisition of PCM, Inc. (PCMI) by Insight Enterprises (NSIT) for $581 million or $35.00 per share in cash.
  3. The acquisition of Rudolph Technologies (RTEC) by Nanometrics Incorporated (NANO) for $673.87 million in an all stock deal. Under the terms of the agreement Rudolph stockholders will receive 0.8042 shares of Nanometrics common stock for each Rudolph share.
  4. The acquisition of NRC Group Holdings (NRCG) by US Ecology (ECOL) for $966 million in an all stock deal. Under the terms of the agreement, NRCG common stockholders will receive 0.196 shares of common stock of the new holding company for each share of NRCG common stock they own upon closing of the transaction.
  5. The acquisition of Del Frisco’s Restaurant Group (DFRG) by L Catterton for $650 million or $8.00 per share in cash.
  6. The acquisition of Allergan (AGN) by AbbVie (ABBV) for $63 billion in a cash plus stock deal. Under the terms of the agreement, Allergan Shareholders will receive 0.8660 AbbVie Shares and $120.30 in cash for each Allergan Share that they hold. On a related note, we wrote about a trio of AbbVie insiders that purchased shares of AbbVie right after this merger was announced.
  7. The acquisition of Aerohive Networks (HIVE) by Extreme Networks (EXTR) for $210 million or $4.45 per share in cash.
  8. The acquisition of Oritani Financial (ORIT) by Valley National Bancorp (VLY) for $740 million in an all stock deal. Under the terms of the agreement, shareholders of Oritani will receive 1.60 shares of Valley common stock for each Oritani share they own.
  9. The acquisition of WageWorks (WAGE) by HealthEquity (HQY) for $2 billion or $51.35 per share in cash. We added WAGE as a potential deal to the Deals in the Works section on April 29, 2019 and the price after the news of the potential deal came out was $43.06.
  10. The acquisition of ASV Holdings (ASV) by an affiliate of Yanmar Holdings for $70.7 million or $7.05 per share in cash.
  11. The acquisition of Highpower International (HPJ) by HPJ Parent Limited for $205.28 million or $4.80 per share in cash.
  12. The acquisition of Hydrogenics Corporation (HYGS) by Cummins (CMI) for $287.54 million or $15.00 per share in cash.

Deal Updates:

  1. On June 24, 2019, Bristol-Myers Squibb Company (BMYprovided an update on the approval process and timeline for the Company’s pending merger with Celgene Corporation (CELG). The Company remains actively engaged in discussions with the U.S. Federal Trade Commission on the FTC’s continued review of the proposed transaction. To allow the transaction to close on a timely basis in light of concerns expressed by the FTC, the Company is planning the divestiture of OTEZLA® (apremilast).
  2. On June 24, 2019, Centene Corporation (CNC) and WellCare Health Plans (WCG) announced that the stockholders of both companies approved all proposals regarding Centene’s pending acquisition of WellCare.
  3. June 26, 2019:  According to Reuters, Carl Icahn ratcheted up his fight with Occidental Petroleum (OXY) over its pending purchase of rival Anadarko Petroleum (APC) by calling for a special shareholder meeting where he hopes to win board seats.
  4. On June 26, 2019, The Federal Trade Commission, granted early termination of the Hart-Scott-Rodino Act waiting period for the review of the deal agreed to by Total System Services (TSS) and Global Payments (GPN).
  5. On June 27, 2019, International Business Machines (IBMwon unconditional EU antitrust approval for its acquisition of Red Hat (RHT).
  6. June 27, 2019: According to Reuters, The Federal Communications Commission opened a new investigation into whether Sinclair Broadcast Group (SBGI) engaged in misrepresentations or a lack of candor in its failed effort to win approval for a $3.9 billion bid to purchase Tribune Media (TRCO).
  7. On June 27, 2019, WABCO Holdings (WBC) welcomed the decision by its shareholders to approve the company’s acquisition by ZF Friedrichshafen AG.
  8. On June 28, 2019, Bristol-Myers Squibb Company (BMYannounced the extension of the expiration date of the offers to exchange notes issued by Celgene Corporation (CELG) Bristol-Myers Squibb has extended the expiration date from July 8, 2019 to September 30, 2019.
  9. On June 28, 2019, Jones Lang LaSalle Incorporated (JLL) and HFF (HF) announced that the parties have received the requisite regulatory approvals and that JLL’s acquisition of HFF is expected to close on Monday, July 1, 2019.
  10. On June 28, 2019, MPLX (MPLX) and Andeavor Logistics (ANDX) announced that the Board of Directors of the general partner of ANDX has set June 28, 2019 as the record date for determining holders of ANDX common units entitled to execute and deliver written consents with respect to the proposed acquisition. The consent process will conclude on July 29, 2019. MPLX expects the closing of the acquisition to occur on July 30, 2019.
  11. On June 28, 2019, Advanced Disposal Services (ADSW) announced that the Company’s stockholders voted to adopt the merger agreement pursuant to which the Company would be acquired by an indirect, wholly-owned subsidiary of Waste Management (WM).

Closed Deals:

  1. The acquisition of SunCoke Energy Partners (SXCP) by SunCoke Energy (SXC) on June 28, 2019. It took 143 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 $3.71 06/30/2019 46.36% -16921.83%
LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) $4.94 $3.67 06/30/2019 34.71% -12668.09%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $6.05 12/31/2019 32.23% 64.29%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $50.89 $40.49 06/30/2019 25.69% -9377.63%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.60 $6.57 07/29/2019 15.74% 205.12%
AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) $4.40 $3.88 01/31/2020 13.43% 22.91%
HPJ 06/28/2019 HPJ Parent Limited (N/A) $4.80 $4.24 09/30/2019 13.21% 52.98%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $110.67 12/31/2019 12.95% 25.83%
ONCE 02/25/2019 Roche Holding AG (RHHBY) $114.50 $102.38 06/30/2019 11.84% -4320.96%
AGN 06/25/2019 AbbVie Inc. (ABBV) $183.28 $167.43 03/31/2020 9.46% 12.61%

List of all pending deals:

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

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

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