Merger Arbitrage Mondays – Big Pharma Spends $5 Billion On Acquisitions

Merger activity decreased with four 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 183
Total Number of Deals Not Completed in 2019 9
Total Number of Pending Deals
Cash Deals 47
Stock Deals 19
Stock & Cash Deals 5
Special Conditions 6
Total Number of Pending Deals 77
Aggregate Deal Consideration $1.33 trillion

New Deals:

  1. The acquisition of Diplomat Pharmacy (DPLO) by OptumRx for $891.47 million or $4.00 per share in cash.
  2. The acquisition of Synthorx (THOR) by Sanofi for $2.35 billion or $68.00 per share in cash.
  3. The acquisition of ArQule (ARQL) by Merck & Co. (MRK) for $2.5 billion or $20.00 per share in cash.
  4. The merger of Texas Capital Bancshares (TCBI) and Independent Bank Group (IBTX) for approximately $3 billion in an all stock deal. Under the terms of the merger agreement, Texas Capital shareholders will receive 1.0311 shares of Independent Bank Group for each Texas Capital share they own.

Deal Updates:

  1. On December 9, 2019, Pattern Energy Group (PEGIannounced the expiration of the 35-day “Go-Shop Period”under the merger agreement between Pattern Energy and Canada Pension Plan Investment Board.
  2. On December 9, 2019, Roche again extended the deadline for its tender offer for Spark Therapeutics (ONCE), saying U.S. and British anti-trust authorities needed more time to review the deal. The offer, which was originally due to expire on December 10, has now been extended to December 16.
  3. December 10, 2019: According to Reuters, the U.S. Justice Department will review plans by Alphabet owned (GOOGL) Google to buy fitness tracker maker Fitbit (FIT) for possible antitrust issues.
  4. On December 12, 2019, OHA Investment Corporation (OHAI) announced that it obtained stockholder approval for its proposed merger with Portman Ridge Finance Corporation (PTMN) at a special meeting of the Company’s stockholders. The Merger is currently expected to close on or around December 18, 2019, subject to satisfaction of customary closing conditions.
  5. On December 12, 2019, Genworth Financial (GNWannounced the closing of the sale of its majority stake in Genworth MI Canada to Brookfield Business Partners (BBU).
  6. On December 12, 2019, Pivotal Software (PVTL) announced that it will hold the company’s special meeting of stockholders on Friday, December 27, 2019.
  7. December 13, 2019: According to Reuters, the European Commission website showed that Nvidia (NVDAhas not offered any concessions to EU antitrust regulators examining its bid for Mellanox Technologies (MLNX). The EU competition enforcer is scheduled to decide on Nvidia’s biggest-ever acquisition by Dec. 19.
  8. On December 13, 2019, ConnectOne Bancorp (CNOB) and Bancorp of New Jersey (BKJ) announced that the merger of BKJ with and into ConnectOne is expected to close on or about January 2, 2020.

Closed Deals:

  1. The acquisition of SunTrust Banks by BB&T Corporation (BBT) on December 9, 2019. It took 305 days for this deal to be completed.
  2. The acquisition of Fibrocell Science (FCSC) by Castle Creek Pharmaceutical Holdings on December 13, 2019. It took 91 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
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.74 $5.21 01/31/2020 48.56% 377.15%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $5.52 03/31/2020 44.93% 153.26%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $9.09 12/31/2019 21.23% 484.36%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.6100 12/31/2019 17.79% 405.78%
OHAI 08/01/2019 Portman Ridge Finance Corporation (PTMN) $1.46 $1.2900 12/18/2019 13.18% 1603.36%
FIT 11/01/2019 Google LLC (N/A) $7.35 $6.59 06/30/2020 11.53% 21.26%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $115.92 03/31/2020 7.83% 26.72%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $26.59 $24.87 09/30/2020 6.90% 8.68%
SORL 11/29/2019 Ruili International Inc. (N/A) $4.72 $4.45 06/30/2020 6.07% 11.18%
ACIA 07/08/2019 Cisco Systems, Inc. (CSCO) $70.00 $67.07 07/31/2020 4.37% 6.96%

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) and Pacific Biosciences of California (PACB). 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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