Merger Arbitrage Mondays – Nearly $12 Billion Of New Deals Announced

Merger activity increased with seven 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 three new deals announced in the Deals in the Works section.

Deal Statistics:

New Deals:

1. The acquisition of Carbonite (CARB) by Open Text Corporation (OTEX) for $1.42 billion or $23.00 per share in cash. We added CARB as a potential deal to the Deals in the Works section on September 6, 2019, and the price after the news of the potential deal came out was $15.08.
2. The merger of Foamix Pharmaceuticals (FOMX) with Menlo Therapeutics (MNLO) for $177.27 million in an all stock deal. Under the terms of the merger agreement, each share of Foamix stock will be exchanged for 0.5924 of a  share of Menlo common stock and a contingent stock right (“CSR”). There are certain adjustments to the ownership levels for each company’s shareholders as follows that result from an adjustment to the exchange ratio under the Merger Agreement prior to closing or post-closing through the issuance of CSRs to Foamix shareholders based on the results of two phase III trials for Menlo’s lead late stage product candidate serlopitant for the treatment of pruritus (itch) associated with prurigo nodularis (“PN”) :
   • If one of the Phase III PN trials fails to meet its primary endpoint at or before May 31, 2020, Foamix shareholders will receive an additional 0.6815 of a share of Menlo common stock for each Foamix share, increasing pro forma ownership of the combined company by Foamix shareholders to 76%
   • If both Phase III PN trials fail to meet their primary endpoints at or before May 31, 2020, Foamix shareholders will receive 1.2082 additional Menlo shares for each Foamix share, increasing pro forma ownership of the combined company by Foamix shareholders to 82%
   • If both the Phase III PN trials are successful with results announced by May 31, 2020, then no additional Menlo shares will be issued to Foamix shareholders and pro forma ownership by Foamix shareholders will remain 59%
   • In the event that the results of the Phase III PN trials are received prior to closing (or if the results of neither trial has been announced by May 31, 2020 and the closing occurs thereafter), then the exchange ratio will be amended based on the clinical trial results and no CSRs will be issued.
3. If one of the Phase III PN trials fails to meet its primary endpoint at or before May 31, 2020, Foamix shareholders will receive an additional 0.6815 of a share of Menlo common stock for each Foamix share, increasing pro forma ownership of the combined company by Foamix shareholders to 76%

Only plus or premium subscribers can access this post. Subscribe today.