Merger Arbitrage Mondays – Vail Resorts Acquires Peak Resorts At A Huge Premium

Merger activity increased last week with five new deals announced and three 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 2019 106
Total Number of Deals Not Completed in 2019 8
Total Number of Pending Deals
Cash Deals 45
Stock Deals 18
Stock & Cash Deals 14
Special Conditions 3
Total Number of Pending Deals 80
Total Deal Size $1.1 trillion

New Deals:

  1. The acquisition of Peak Resorts (SKIS) by Vail Resorts (MTN) for $671.37 million or $11.00 per share in cash. Vail agreed to pay a sizable premium of 116% to acquire Peak Resorts.
  2. The acquisition of Condor Hospitality Trust (CDOR) by NexPoint Hospitality Trust for $318 million or $11.10 per share in cash.
  3. The acquisition of Old Line Bancshares (OLBK) by WesBanco (WSBC) for $500 million in an all stock deal. Under the terms of the agreement, Old Line stockholders will be entitled to receive 0.7844 of a share of WesBanco common stock for each share of Old Line common stock they own.
  4. The acquisition of Speedway Motorsports (TRK) by Sonic Financial Corporation in a management led buyout for $936.97 million or $19.75 per share in cash. We added TRK as a potential deal to the Deals in the Works section on April 24, 2019 and the price after the news of the potential deal came out was $18.40.
  5. The acquisition of Monotype Imaging Holdings (TYPE) by the private equity firm HGGC for $825 million or $19.85 per share in cash. We added TYPE as a potential deal to the Deals in the Works section on June 20, 2019 and the price after the news of the potential deal came out was $17.65.

Deal Updates:

  1. July 24, 2019: According to Bloomberg, Dish Network (DISH) has agreed to pay $5 billion for wireless assets in a deal with T-Mobile (TMUS) and Sprint (S), setting the stage for the Justice Department to approve the merger between the two companies.
  2. July 25, 2019: Genworth (GNWhas taken the first steps in the sale process of at least the majority of its holding in Genworth MI Canada (MIC CN) which will obviate the requirement to get Canadian regulatory clearance for its own acquistion by China Oceanwide.
  3. On July 26, 2019, T-Mobile US (TMUS) and Sprint Corporation (S) announced they have taken an important step toward completing their proposed merger to create the New T-Mobile by entering into a consent decree with the U.S. Department of Justice (DOJ). The DOJ action moves the merger one step closer to closing, pending other regulatory approvals and the satisfaction of other closing conditions.
  4. On July 26, 2019, Zayo Group Holdings (ZAYO) announced that its shareholders approved all proposals related to the definitive merger agreement to be acquired by affiliates of Digital Colony Partners and the EQT Infrastructure IV fund.
  5. On July 26, 2019, UQM Technologies (UQM) announced that the Company has received notice from the Committee on Foreign Investment in the United States stating that CFIUS has cleared the previously announced merger between the Company and a wholly owned subsidiary of Danfoss Power Solutions (US) Company. In accordance with the Merger Agreement, the companies have agreed that the closing will take place on July 31, 2019. The spread on this deal had widened to 14% as recently as June 11th, after news of the company awaiting CFIUS approval came out.
  6. On July 26, 2019, NexPoint Hospitality Trust announced that the special meeting of stockholders of the company in connection with the previously announced acquisition of Condor Hospitality Trust (CDOR) will be held on August 30, 2019.

Failed Deals:

  1. On July 23, 2019, LSC Communications (LKSD) announced that LSC and Quad/Graphics (QUAD) have mutually agreed to terminate the merger agreement. The deal failed to get regulatory approval.

Closed Deals:

  1. The acquisition of American Midstream Partners (AMID) by ArcLight Energy Partners Fund on July 23, 2019. It took 127 days for this deal to be completed.
  2. The acquisition of Electronics for Imaging (EFII) by an affiliate of Siris Capital Group on July 23, 2019. It took 99 days for this deal to be completed.
  3. The acquisition of Liberty Expedia Holdings (LEXEA) by Expedia Group (EXPE) on July 26, 2019. It took 101 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
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $5.24 12/31/2019 52.67% 124.03%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $52.84 $37.33 09/30/2019 41.55% 240.71%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.0500 11/30/2019 34.07% 100.30%
ONCE 02/25/2019 Roche Holding AG (RHHBY) $114.50 $98.08 04/30/2020 16.74% 22.14%
AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) $4.57 $4.05 01/31/2020 12.91% 25.34%
AGN 06/25/2019 AbbVie Inc. (ABBV) $178.98 $160.98 03/31/2020 11.18% 16.59%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $113.7 12/31/2019 9.94% 23.40%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.64 $7.99 07/29/2019 8.14% 0.00%
HPJ 06/28/2019 HPJ Parent Limited (N/A) $4.80 $4.45 09/30/2019 7.87% 45.57%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $65.1 07/31/2020 7.53% 7.47%

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.

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

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