Merger activity continued to remain lackluster last week with no new deals announced and one deal closing.
This is the second time in a row no new deals were announced. FSB Bancorp (FSBC), Forescout Technologies (FSCT), IBERIABANK Corporation (IBKC) and The Stars Group (TSG) received approval from their shareholders for their respective merger agreements. KEMET Corporation (KEM) received approval from the Committee on Foreign Investment in the United States (CFIUS) in connection with its pending acquisition by Yageo Corporation.
We updated the exchange ratio for the Standard Diversified (SDI) and Turning Point Brands (TPB) deal last week. According to the merger agreement, each share of Standard Diversified’s class A and class B common stock will be converted into the right to receive a fraction of a share of TPB Voting Common Stock, par value $0.01 per share equal to (a) 97% of the total number of shares of TPB Common Stock held by SDI at the Effective Time, divided by (b)(1) the total number of shares of SDI Common Stock outstanding at such date plus (2) the total number of shares of SDI Common Stock underlying all awards of shares of SDI Common Stock granted under SDI’s 2017 Omnibus Equity Incentive Plan that are unvested. Based on this information, we calculated and updated the exchange ratio to 0.57.
I have also received several emails about the acquisition of FSB Bankcorp (FSBC) by Evans Bancorp (EVBN) and the large and growing spread on that deal. This is a cash (or) stock kind of deal. At this point the cash election is probably oversubscribed and hence most shareholders are likely to receive Evans Bancorp shares, which means the merger consideration received is likely to be well below the all cash consideration of $17.80. We are going to update our Merger Arbitrage Tool to reflect this and covert this deal from a cash deal to an all stock deal.
Another deal with a large and growing spread that I have been watching is the acquisition of the mall REIT Taubman Centers (TCO) by the largest mall REIT Simon Property Group (SPG). On account of the all cash nature of the acquisition, Taubman had held up much better than other mall REITs but has been declining in recent weeks as the specter of retail bankruptcies and tenants not paying rent rises.
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 17, 2020 and April 25, 2020.
Symbol | Quote | Acquiring Company | Acquiring Company Quote | Current Spread | Last Week Spread | Spread Change Weekly | Deal Type |
---|---|---|---|---|---|---|---|
FSBC | 12.3 | Evans Bancorp, Inc. (EVBN) | 24.99 | 44.72% | 22.76% | 21.96% | All Cash |
TSG | 25.1 | Flutter Entertainment PLC (PDYPF) | 111.25 | -0.14% | -12.70% | 12.56% | All Stock |
TCO | 37.43 | Simon Property Group, Inc. (SPG) | 51.49 | 40.26% | 27.99% | 12.27% | All Cash |
DLPH | 7.99 | BorgWarner Inc. (BWA) | 27.08 | 53.67% | 41.58% | 12.09% | All Stock |
GNW | 3.3 | China Oceanwide Holdings Group Co., Ltd. (N/A) | 64.55% | 54.70% | 9.85% | All Cash | |
CZR | 8.87 | Eldorado Resorts, Inc. (ERI) | 17.82 | 12.76% | 21.79% | -9.03% | Cash Plus Stock |
LACQ | 11.39 | GTWY Holdings Limited (N/A) | 0.97% | 11.33% | -10.36% | Special Conditions | |
MSBF | 12.11 | Kearny Financial Corp. (KRNY) | 7.94 | -14.76% | -3.09% | -11.67% | All Stock |
CETV | 3.99 | PPF Group N.V. (N/A) | 14.79% | 32.37% | -17.58% | All Cash | |
SDI | 11.45 | Turning Point Brands, Inc. (TPB) | 20.69 | 3.00% | 76.00% | -73.00% | All Stock |
Deal Statistics:
Total Number of Deals Closed in 2020 | 50 |
Total Number of Deals Not Completed in 2020 | 5 |
Total Number of Pending Deals | |
Cash Deals | 28 |
Stock Deals | 24 |
Stock & Cash Deals | 5 |
Special Conditions | 4 |
Total Number of Pending Deals | 61 |
Aggregate Deal Consideration | $531.19 billion |
Deal Updates:
Closed Deals:
Top 10 deals with largest spreads:
Symbol | Announced Date | Acquiring Company | Closing Price | Last Price | Closing Date | Profit | Annualized Profit |
---|---|---|---|---|---|---|---|
CDOR | 07/22/2019 | NexPoint Hospitality Trust (N/A) | $11.10 | $3.62 | 06/30/2020 | 206.63% | 1160.31% |
GNW | 10/23/2016 | China Oceanwide Holdings Group Co., Ltd. (N/A) | $5.43 | $3.3 | 06/30/2020 | 64.55% | 362.45% |
DLPH | 01/28/2020 | BorgWarner Inc. (BWA) | $12.28 | $7.99 | 12/31/2020 | 53.67% | 78.67% |
FSBC | 12/19/2019 | Evans Bancorp, Inc. (EVBN) | $17.80 | $12.3 | 06/30/2020 | 44.72% | 251.09% |
TCO | 02/10/2020 | Simon Property Group, Inc. (SPG) | $52.50 | $37.43 | 06/30/2020 | 40.26% | 226.09% |
YTRA | 07/17/2019 | Ebix, Inc. (EBIX) | $1.74 | $1.27 | 06/30/2020 | 37.17% | 208.70% |
FG | 02/07/2020 | Fidelity National Financial, Inc. (FNF) | $12.50 | $10.25 | 09/30/2020 | 21.95% | 51.03% |
CETV | 10/27/2019 | PPF Group N.V. (N/A) | $4.58 | $3.99 | 06/30/2020 | 14.79% | 83.03% |
CZR | 06/24/2019 | Eldorado Resorts, Inc. (ERI) | $10.00 | $8.87 | 06/30/2020 | 12.76% | 71.67% |
AXE | 01/13/2020 | WESCO International, Inc. (WCC) | $100.00 | $90.55 | 09/30/2020 | 10.44% | 24.26% |
List of all pending deals:
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.
Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria