Merger Arbitrage Mondays – M&A Activity Increases For The Fourth Week In A Row

Merger activity increased with six new deals announced and two 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 168
Total Number of Deals Not Completed in 2019 9
Total Number of Pending Deals
Cash Deals 36
Stock Deals 20
Stock & Cash Deals 9
Special Conditions 5
Total Number of Pending Deals 70
Aggregate Deal Consideration $1.24 trillion

New Deals:

  1. The acquisition of Wright Medical Group (WMGI) by Stryker Corporation (SYK) for $5.4 billion or $30.75 per share in cash.
  2. The acquisition of IBERIABANK Corporation (IBKC) by First Horizon National Corporation (FHN) for $5.28 billion in an all stock deal. Under the terms of the merger agreement, IBERIABANK shareholders will receive 4.584 shares of First Horizon for each IBERIABANK share they own.
  3. The acquisition of Pattern Energy Group (PEGI) by Canada Pension Plan Investment Board for $6.1 billion or $26.75 per share in cash. We added PEGI as a potential deal to the Deals in the Works section on August 12, 2019, and the price after the news of the potential deal came out was $24.76.
  4. The acquisition of Aircastle Limited (AYR) by Marubeni Corporation and Mizuho Leasing Company, Limited for $7.4 billion or $32.00 per share in cash. We added AYR as a potential deal to the Deals in the Works section on October 24, 2019, and the price after the news of the potential deal came out was $26.20.
  5. The acquisition of William Lyon Homes (WLH) by Taylor Morrison Home Corporation (TMHC) for $2.4 billion in a cash plus stock deal. Under the terms of the agreement, Taylor Morrison will acquire all of the outstanding shares of William Lyon Homes common stock for per share consideration of (1) $2.50 in cash and (2) 0.800 shares of Taylor Morrison common stock.
  6. The acquisition of Diversified Restaurant Holdings (SAUC) by ICV Partners for $130 million or $1.05 per share in cash.

Deal Updates:

  1. On November 5, 2019, the Federal Communications Commission (FCC) officially approved the merger of T-Mobile (TMUS) and Sprint (S). This news barely had any impact on Sprint stock and the spread on the deal continues to remain wide because the companies still need to settle with various states that have filed lawsuits to block the merger.
  2. On November 6, 2019, Brazil’s anti-trust regulator CADE approved the acquisition of Avon Products (AVP) by personal care maker Natura Cosmeticos SA.
  3. On November 6, 2019, Shareholders of Presidio (PSDO) approved the company’s merger with BC Partners at a special meeting of shareholders.
  4. On November 8, 2019, the Department of Justice announced that BB&T Corporation (BBT) and SunTrust Banks (STI) have agreed to divest 28 branches across North Carolina, Virginia, and Georgia with approximately $2.3 billion in deposits to resolve antitrust concerns arising from BB&T’s proposed merger with SunTrust.

Closed Deals:

  1. The acquisition of Reven Housing REIT (RVEN) by KBS Strategic Opportunity REIT on November 4, 2019. It took 65 days for this deal to be completed.
  2. The acquisition of Genomic Health (GHDX) by Exact Sciences Corporation (EXAS) on November 8, 2019. It took 102 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 $4.69 03/31/2020 70.58% 182.70%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $8.30 $6.11 01/31/2020 35.86% 161.60%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.04 12/31/2019 34.41% 251.16%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $8.93 12/31/2019 23.40% 170.85%
CRZO 07/15/2019 Callon Petroleum Company (CPE) $9.31 $7.72 12/31/2019 20.56% 150.07%
OHAI 08/01/2019 Portman Ridge Finance Corporation (PTMN) $1.46 $1.3099 12/31/2019 11.46% 83.65%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $115.06 12/31/2019 8.64% 63.06%
AGN 06/25/2019 AbbVie Inc. (ABBV) $194.09 $181.28 03/31/2020 7.07% 18.30%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $23.00 $21.77 09/30/2020 5.66% 6.38%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $66.43 07/31/2020 5.37% 7.46%

List of all pending deals:

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

Disclaimer: I hold long positions in Sprint (S), 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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