Merger Arbitrage Mondays – January 27, 2020

Merger activity decreased last week with three new deals announced and three 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 was one new deal announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2020 13
Total Number of Deals Not Completed in 2020 2
Total Number of Pending Deals
Cash Deals 40
Stock Deals 20
Stock & Cash Deals 6
Special Conditions 6
Total Number of Pending Deals 72
Aggregate Deal Consideration $417.91 billion

New Deals:

  1. The acquisition of CSS Industries (CSS) by IG Design Group for $88 million or $9.40 per share in cash.
  2. The merger of Franklin Financial Network (FSB) with FB Financial Corporation (FBK) for $611 million in a cash plus stock deal. Under the terms of the merger agreement, Franklin shareholders will receive 0.9650 shares of FB Financial common stock and $2.00 in cash for each share of Franklin stock.
  3. The acquisition of Changyou.com Limited (CYOU) by Sohu.com Limited (SOHU) for $579 million. Under the terms of the Merger Agreement each Class A ordinary share of the Company issued and outstanding other than the Excluded Shares, will be cancelled and cease to exist, in exchange for the right to receive $5.40 in cash without interest, and each outstanding American depositary share of the Company (each, an “ADS,” representing two Class A Ordinary Shares), other than the ADSs representing the Excluded Shares, will be cancelled in exchange for the right to receive $10.80 in cash without interest.We added CYOU as a potential deal to the Deals in the Works section on September 9, 2019, and the price after the news of the potential deal came out was $10.71.

Deal Updates:

  1. On January 20, 2020, First Defiance Financial (FDEF) and United Community Financial (UCFC) announced that approval has been received from the Federal Reserve Bank, the Federal Deposit Insurance and the Ohio Division of Financial Institutions (collectively, the “Regulatory Authorities”) for the merger of United Community with and into First Defiance.
  2. On January 21, 2020, Pattern Energy Group (PEGI) announced that it had established a record date of January 31, 2020, and a special meeting date of March 10, 2020, for a meeting of its stockholders to, among other things, vote to approve proposals related to the merger agreement between Pattern Energy and Canada Pension Plan Investment Board.
  3. On January 22, 2020, The Federal Trade Commission (FTC) has granted early termination of the required waiting period under the Hart-Scott-Rodino Act with respect to the acquisition of AK Steel Holding Corporation (AKS) by Cleveland-Cliffs (CLF).
  4. On January 23, 2020, ZF Friedrichshafen AG won U.S. antitrust approval for its $7 billion deal to buy U.S. rival Wabco (WBC).
  5. On January 24, 2020, Cincinnati Bell (CBB) announced that on January 22, 2020 it received a non-binding proposal from an infrastructure fund to acquire all of the outstanding shares of common stock of Cincinnati Bell for $12.00 per share in cash.
  6. On January 24, 2020, The U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the pending acquisition of Achillion Pharmaceuticals (ACHN) by Alexion Pharmaceuticals (ALXN).

Closed Deals:

  1. The acquisition of Synthorx (THOR) by Sanofi on January 23, 2020. It took 45 days for this deal to be completed.
  2. The acquisition of Teekay Offshore Partners (TOO) by Brookfield Business Partners (BBU) on January 23, 2020. It took 114 days for this deal to be completed.
  3. The acquisition of WellCare Health Plans (WCG) by Centene Corporation (CNC) on January 23, 2020. It took 302 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) $8.37 $4.83 01/31/2020 73.23% 6681.93%
NTGN 01/16/2020 BioNTech SE (BNTX) $2.20 $1.66 06/30/2020 32.79% 77.22%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.24 03/31/2020 28.07% 160.06%
ABDC 08/13/2019 Crescent Capital BDC, Inc. (N/A) $11.02 $9.48 03/31/2020 16.24% 92.65%
LACQ 12/30/2019 GTWY Holdings Limited (N/A) $11.50 $10.42 06/30/2020 10.36% 24.41%
FIT 11/01/2019 Google LLC (N/A) $7.35 $6.69 06/30/2020 9.87% 23.23%
TSG 10/02/2019 Flutter Entertainment PLC (PDYPF) $26.18 $24.59 09/30/2020 6.47% 9.55%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $119.45 03/31/2020 4.65% 26.50%
FSBC 12/19/2019 Evans Bancorp, Inc. (EVBN) $17.80 $17.18 06/30/2020 3.61% 8.50%
AMTD 11/25/2019 The Charles Schwab Corporation (SCHW) $51.10 $49.32 12/31/2020 3.60% 3.88%

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) and Mellanox Technologies (MLNX). 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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