Merger activity increased last week with two new deals announced, one deal closing and one deal terminated. The increase in merger activity last week was not very significant as only two new deals were announced. The merger of Standard Diversified (SDI) into a wholly owned subsidiary of Turning Point Brands (TPB) is a tax-free merger. The transaction was first announced by the companies in November 2019 and confirmed last week. The second deal was a going private transaction, where the Stern Group, comprised of Gary Stern, Ricky Stern and certain related parties will acquire the outstanding publicly held shares of common stock of Asta Funding (ASFI).
The most significant update from our active deals last week was Woodward (WWD) and Hexcel Corporation (HXL) mutually terminating their merger agreement. The termination was a result of the impact of the COVID-19 pandemic on the aerospace and industrial sectors.
The impact of the pandemic was also seen in other deals. The acquisition of Tiffany by LVMH might potentially be delayed. Some companies have asked their shareholders to attend shareholder meetings virtually during the lockdown period.
On the positive side, Infineon Technologies AG obtained antitrust clearance from China’s State Administration for Market Regulation for its merger transaction with Cypress Semiconductor (CY) and Anixter’s (AXE) shareholders approved the transaction between Anixter and WESCO International (WCC).
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
There were no new deals announced in the Deals in the Works section last week.
Weekly Spread Changes:
The table below shows weekly spread changes between April 3, 2020 and April 10, 2020.
|YTRA||1.06||Ebix, Inc. (EBIX)||16.89||59.34%||24.55%||34.79%||All Stock|
|QUMU||1.59||Synacor, Inc. (SYNC)||1.04||5.31%||0.03%||5.28%||All Stock|
|PGNX||3.69||Lantheus Holdings, Inc. (LNTH)||13.21||10.98%||6.85%||4.13%||All Stock|
|TIVO||6.82||Xperi Corporation (XPER)||14.62||-2.46%||-5.49%||3.03%||All Stock|
|CSFL||17.84||South State Corporation (SSB)||61.5||3.45%||0.57%||2.88%||All Stock|
|NTGN||2.46||BioNTech SE (BNTX)||45.41||16.29%||31.35%||-15.06%||All Stock|
|TSG||21.65||Flutter Entertainment PLC (PDYPF)||89.05||-7.33%||7.81%||-15.14%||All Stock|
|CZR||7.93||Eldorado Resorts, Inc. (ERI)||18.11||26.46%||48.30%||-21.84%||Cash Plus Stock|
|CETV||3.45||PPF Group N.V. (N/A)||32.75%||69.00%||-36.25%||All Cash|
|CDOR||3.6||NexPoint Hospitality Trust (N/A)||208.33%||270.00%||-61.67%||All Cash|
|Total Number of Deals Closed in 2020||45|
|Total Number of Deals Not Completed in 2020||4|
|Total Number of Pending Deals|
|Stock & Cash Deals||5|
|Total Number of Pending Deals||67|
|Total Deal Size||$342.6 billion|
- The merger of Standard Diversified (SDI) into a wholly owned subsidiary of Turning Point Brands (TPB) for $661.06 million in an all stock deal. Under the terms of the agreement, the holders of SDI’s Class A Common Stock and SDI’s Class B Common Stock will receive in the aggregate, in return for their SDI Common Stock, TPB Voting Common Stock at a ratio of 0.97 of a share of TPB Common Stock for each share of TPB Common Stock held by SDI.
- The acquisition of Asta Funding (ASFI) by Stern Group in a going private transaction for $91.84 million or $11.47 per share in cash.
- On April 6, 2020, Woodward (WWD) and Hexcel Corporation (HXL) announced that the companies have mutually agreed to terminate their merger agreement. The termination was approved by the Boards of Directors of both companies and is in response to the increasing impact on both the aerospace and industrial sectors, and global markets broadly, resulting from the health crisis caused by the coronavirus (COVID-19) pandemic.
- On April 7, 2020, Cypress Semiconductor (CY) announced that Infineon Technologies AG has obtained antitrust clearance from China’s State Administration for Market Regulation for Cypress’ previously announced merger transaction with Infineon (IFNNY). Cypress expects the merger to close on or about April 16, 2020.
- April 8, 2020: According to Reuters, Tiffany (TIF) said that Australian regulators have sought more time to review LVMH’s multi-billion dollar purchase of the U.S. jeweler due to the coronavirus outbreak, potentially delaying closure of the deal.
- On April 10, 2020, Anixter International (AXE) announced that, at a special meeting of stockholders, Anixter’s stockholders approved the adoption of the previously announced merger agreement relating to the proposed transaction between Anixter and WESCO International (WCC).
- The acquisition of Forty Seven (FTSV) by Gilead Sciences (GILD) on April 7, 2020. It took 36 days for this deal to be completed.
Top 10 deals with largest spreads:
|CDOR||07/22/2019||NexPoint Hospitality Trust (N/A)||$11.10||$3.6||06/30/2020||208.33%||962.55%|
|SMRT||01/31/2020||Kingswood Capital Management, L.P. (N/A)||$0.90||$0.37||06/30/2020||143.24%||661.82%|
|SDI||04/08/2020||Turning Point Brands, Inc. (TPB)||$21.28||$11.85||06/30/2020||79.59%||367.74%|
|YTRA||07/17/2019||Ebix, Inc. (EBIX)||$1.69||$1.06||06/30/2020||59.34%||274.16%|
|GNW||10/23/2016||China Oceanwide Holdings Group Co., Ltd. (N/A)||$5.43||$3.58||06/30/2020||51.68%||238.76%|
|DLPH||01/28/2020||BorgWarner Inc. (BWA)||$11.67||$8.29||12/31/2020||40.78%||56.59%|
|CETV||10/27/2019||PPF Group N.V. (N/A)||$4.58||$3.45||06/30/2020||32.75%||151.33%|
|FSBC||12/19/2019||Evans Bancorp, Inc. (EVBN)||$17.80||$13.98||06/30/2020||27.32%||126.25%|
|CZR||06/24/2019||Eldorado Resorts, Inc. (ERI)||$10.03||$7.93||06/30/2020||26.46%||122.24%|
|FG||02/07/2020||Fidelity National Financial, Inc. (FNF)||$12.50||$10.25||09/30/2020||21.95%||46.85%|
List of all pending deals:
List of all pending deals:
The aggregate deal consideration for the active deals decreased to $342.6 billion after Woodward (WWD) and Hexcel Corporation (HXL) mutually terminated their deal and Gilead Sciences (GILD) successfully completed the acquisition of Forty Seven. The top 10 deals in our list of active deals continue to trade with spreads over 20%.
Disclaimer: I hold a long position in 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.