Merger Arbitrage Mondays – Flutter Entertainment acquires The Stars Group

Merger activity increased last week with five new deals announced and five 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 two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2019 144
Total Number of Deals Not Completed in 2019 9
Total Number of Pending Deals
Cash Deals 42
Stock Deals 18
Stock & Cash Deals 10
Special Conditions 6
Total Number of Pending Deals 76
Aggregate Deal Consideration $1.18 trillion

New Deals:

  1. The acquisition of Dova Pharmaceuticals (DOVA) by Swedish Orphan Biovitrum AB for $915 million. Under the terms of the agreement, Dova stockholders will be offered an upfront payment for $27.50 per share in cash, along with one non-tradeable Contingent Value Right (CVR) that entitles them to an additional $1.50 per share in cash upon regulatory approval of DOPTELET for the treatment of chemotherapy-induced thrombocytopenia (CIT), representing a total potential consideration of $29.00 per share. We are treating this a “special conditions” deal. Dova is currently trading at $28.20, implying a greater than 50% probability of DOPTELET getting regulatory approval after adjusting for standard merger risks.
  2. The acquisition of Teekay Offshore Partners (TOO) by Brookfield Business Partners (BBU) for $5.39 billion or $1.55 per share in cash.
  3. The acquisition of Roan Resources (ROAN) by Citizen Energy Operating, an affiliate of Warburg Pincus LLC, for $1 billion or $1.52 per share in cash.
  4. The acquisition of Progenics Pharmaceuticals (PGNX) by  Lantheus Holdings (LNTH) for $486.85 million in an all stock deal.
  5. The acquisition of The Stars Group (TSG) by Flutter Entertainment (PDYPF) for $12.25 billion in an all stock deal. Under the terms of the agreement, TSG Shareholders will be entitled to receive 0.2253 New Flutter Shares in exchange for each TSG Share.

Deal Updates:

  1. On September 30, 2019, Roche extended its offer to buy Spark Therapeutics (ONCE), this time until October 30, as U.S. and British regulators continue to scrutinize the oft-delayed bid.
  2. On September 30, 2019, Gannett (GCI) announced that it has scheduled a special meeting of its shareholders to consider and vote on a proposal to adopt the previously announced definitive agreement with New Media Investment Group (NEWM). The special meeting will be held on November 14, 2019.
  3. On September 30, 2019, Highpower International (HPJ) announced that it has filed definitive proxy materials with the U.S. Securities and Exchange Commission in connection with the Company’s pending acquisition by HPJ Parent Limited. The Highpower Special Meeting of Stockholders is scheduled to take place on October 29, 2019.
  4. On October 1, 2019, Versum Materials (VSM) announced that the State Administration for Market Regulation of the People’s Republic of China (SAMR) provided unconditional antitrust clearance for the proposed acquisition of Versum by Merck KGaA.
  5. On October 3, 2019, Stewardship Financial Corporation (SSFN) announced that, the shareholders of Stewardship approved the previously-disclosed, contemplated merger with Columbia Financial (CLBK).
  6. On October 4, 2019, Florida  Attorney General Ashley Moody announced that she is joining the U.S. Department of Justice along with 10 other states in support of the T-Mobile US (TMUS) and Sprint Corporation (S) merger.
  7. On October 4, 2019, VMware (VMW) and Carbon Black (CBLK) announced that the required waiting period under the Austrian Cartel Act applicable to VMware’s Tender Offer for Carbon Black has expired.
  8. On October 4, 2019, C&J Energy Services (CJ) announced the Board of Directors of the Company declared, contingent on further action by the Board to establish a payment date and to determine surplus under Delaware law, a cash dividend of $1.00 per share on all of the Company’s outstanding common stock to holders of record at the close of business on October 18, 2019.

Closed Deals:

  1. The acquisition of Tower International (TOWR) by Autokiniton Global Group on September 30, 2019. It took 80 days for this deal to be completed.
  2. The acquisition of Northstar Realty Europe (NRE) by AXA Investment Managers on September 30, 2019. It took 89 days for this deal to be completed.
  3. The acquisition of Oaktree Capital Group (OAK) by Brookfield Asset Management (BAM) on September 30, 2019. It took 201 days for this deal to be completed.
  4. The acquisition of Pointer Telocation (PNTR) by I.D. Systems (IDSY) on October 3, 2019. It took 202 days for this deal to be completed.
  5. The acquisition of Sotheby’s (BID) by BidFair USA on October 3, 2019. It took 109 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 $4.98 03/31/2020 60.64% 125.76%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.00 $6.07 01/31/2020 31.77% 99.98%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.24 12/31/2019 28.07% 120.52%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $8.86 12/31/2019 24.38% 104.69%
ONCE 02/25/2019 Roche Holding AG (RHHBY) $114.50 $97.56 04/30/2020 17.36% 30.77%
OHAI 08/01/2019 Portman Ridge Finance Corporation (PTMN) $1.46 $1.28 12/31/2019 14.06% 60.39%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $110.94 12/31/2019 12.67% 54.42%
AGN 06/25/2019 AbbVie Inc. (ABBV) $184.96 $168.44 03/31/2020 9.81% 20.33%
CRZO 07/15/2019 Callon Petroleum Company (CPE) $8.06 $7.45 12/31/2019 8.14% 34.96%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $22.42 $20.92 09/30/2020 7.16% 7.28%

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) and Bristol-Myers Squibb (BMY). 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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