Merger Arbitrage Mondays – Pacific Biosciences Drops After U.K.’s Competition and Markets Authority Raises Concerns

Merger activity increased last week with four new deals announced and four 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 156
Total Number of Deals Not Completed in 2019 9
Total Number of Pending Deals
Cash Deals 35
Stock Deals 20
Stock & Cash Deals 10
Special Conditions 6
Total Number of Pending Deals 71
Aggregate Deal Consideration $1.19 trillion

New Deals:

  1. The acquisition of Innophos Holdings (IPHS) by an affiliate of One Rock Capital Partners for $932 million or $32.00 per share in cash.
  2. The acquisition of Cision (CISN) by an affiliate of Platinum Equity for $2.74 billion or $10.00 per share in cash. We added CISN as a potential deal to the Deals in the Works section on March 4, 2019, and the price after the news of the potential deal came out was $13.84.
  3. The acquisition of PB Bancorp (PBBI) by Centreville Bank for $115.5 million or $15.25 per share in cash.
  4. The acquisition of Liberty Property Trust (LPT) by Prologis (PLD) for $12.6 billion in an all stock deal. Under the terms of the agreement, Liberty shareholders will receive 0.675x of a Prologis share for each Liberty share they own.

Deal Updates:

  1. On October 21, 2019, Buckeye Partners (BPL) announced that all regulatory approvals required to complete the acquisition of Buckeye by entities affiliated with the IFM Global Infrastructure Fund have been received. The completion of the proposed merger is currently expected to occur prior to market opening on Friday, November 1, 2019.
  2. On October 21, 2019, LegacyTexas (LTXBnotified NASDAQ  that it anticipates that the merger with Prosperity Bancshares (PB) will be effective as of November 1, 2019, subject to the approval of the shareholders of Prosperity and the stockholders of LegacyTexas.
  3. On October 21, 2019, Stewardship Financial Corporation (SSFN) announced that the Company and Columbia Financial (CLBK) have received the requisite regulatory approvals from the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the New Jersey Department of Banking and Insurance necessary to complete Columbia’s acquisition of the Company. The transaction is expected to close on November 1, 2019.
  4. On October 22, 2019, Isramco (ISRL) announced that the Company’s stockholders voted, among other things, in favor of the proposal to adopt the merger.
  5. On October 22, 2019, Centene Corporation (CNC) and WellCare Health Plans (WCG) announced that the New York Department of Financial Services and Department of Health have each approved Centene’s pending indirect acquisition of WellCare insurance subsidiaries, bringing the total number of states to approve the transaction to 25.
  6. On October 22, 2019, C&J Energy Services (CJ) and Keane Group (FRAC) announced that the shareholders of both companies approved all of the proposals necessary for the closing of the previously announced all-stock merger of equals between Keane and C&J. The merger of equals is anticipated to close on October 31, 2019.
  7. On October 22, 2019, Genworth Financial (GNW) announced it received feedback from Canadian regulators with respect to the transaction pursuant to which Brookfield Business Partners has agreed to purchase Genworth’s majority interest in Genworth MI Canada. Discussions with the Canadian regulators with respect to the acquisition of Genworth by China Oceanwide Holdings Group were focused on national security matters, including data protection and the safeguarding of our customers’ information.
  8. On October 23, 2019, Gannett (GCI) announced that the European Commission has provided regulatory clearance under the EU Merger Regulation for the transactions contemplated by its previously announced definitive agreement. The Merger is expected to close shortly following the Gannett and New Media special stockholder meetings, which are currently scheduled for November 14, 2019.
  9. On October 24, 2019, Dassault Systèmes and Medidata Solutions (MDSO) announced that the Committee on Foreign Investment in the United States (“CFIUS”) approved the proposed acquisition of Medidata by Dassault Systèmes.
  10. On October 24, 2019, Wesco Aircraft Holdings (WAIR) announced that Wesco Aircraft stockholders voted to approve the proposed merger with an affiliate of Platinum Equity at the company’s special meeting of stockholders.
  11. October 24, 2019: U.K.’s Competition and Markets Authority (CMA) issued its provisional findings as part of a Phase 2 merger investigation of the proposed takeover of Pacific Biosciences of California (PACB) by Illumina (ILMN) stating that the merger raises competition concerns.
  12. October 25, 2019: According to Reuters, the Federal Trade Commission staff reviewing Roche’s plan to buy Spark Therapeutics (ONCErecommended that the deal be approved without requiring any asset sales.
  13. On October 25, 2019, Valley National Bancorp (VLY) announced it received notice from the Board of Governors of the Federal Reserve System that it waived the requirement for a bank merger application for the previously announced merger of Oritani Financial (ORIT) with and into Valley.
  14. On October 25, 2019, stockholders of Corindus Vascular Robotics (CVRSapproved the adoption of the Agreement and Plan of Merger by and among Siemens Medical Solutions USA, Corpus Merger and Corindus.

Closed Deals:

  1. The acquisition of MAM Software Group (MAMS) by Kerridge Commercial Systems on October 21, 2019. It took 48 days for this deal to be completed.
  2. The acquisition of Alder BioPharmaceuticals (ALDR) by H. Lundbeck A/S on October 22, 2019. It took 36 days for this deal to be completed.
  3. The acquisition of Sears Hometown and Outlet Stores (SHOS) by Transform Holdco on October 23, 2019. It took 142 days for this deal to be completed.
  4. The acquisition of Isramco (ISRL) by Naphtha Israel Petroleum Corporation on October 25, 2019. It took 158 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 $4.71 03/31/2020 69.85% 164.49%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.37 $6.38 01/31/2020 31.21% 119.90%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.25 12/31/2019 27.76% 158.35%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $8.94 12/31/2019 23.27% 132.69%
LPT 10/27/2019 Prologis, Inc. (PLD) $61.33 $50.57 03/31/2020 21.28% 50.11%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $110.65 12/31/2019 12.97% 73.96%
CJ 06/17/2019 Keane Group, Inc. (FRAC) $10.16 $9.11 12/31/2019 11.49% 65.51%
OHAI 08/01/2019 Portman Ridge Finance Corporation (PTMN) $1.46 $1.31 12/31/2019 11.45% 65.30%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $64.88 07/31/2020 7.89% 10.40%
AGN 06/25/2019 AbbVie Inc. (ABBV) $186.57 $173.84 03/31/2020 7.33% 17.25%

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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