Merger Arbitrage Mondays – Two Chinese Companies Choose To Go Private

  • June 22, 2020

Merger activity decreased last week with two new deals announced, and one deal closing.

One of the two new deals announced last week was on our list of potential deals and the other one was a “going private” transaction.

According to Reuters, Australian antitrust regulators expressed concerns regarding Google’s acquisition of Fitbit (FIT) and how it would give Google a large amount of user data thereby raising barriers for rivals. Oddly enough the spread on the deal narrowed despite this warning.

First Horizon National (FHN) and IBERIABANK Corporation (IBKC) received regulatory approval for their all stock merger of equals. The regulatory approval process also included previously-received approvals from the Tennessee Department of Financial Institutions and the Louisiana Office of Financial Institutions. Progenics Pharmaceuticals (PGNX) and Lantheus Holdings (LNTH) received approval from their shareholders and expect to complete the merger soon.

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 June 12, 2020, and June 19, 2020.

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
GNW2.68China Oceanwide Holdings Group Co., Ltd. (N/A)102.61%72.38%30.23%All Cash
CDOR4.21NexPoint Hospitality Trust (N/A)163.66%149.44%14.22%All Cash
PGNX4.1Lantheus Holdings, Inc. (LNTH)14.8312.13%-0.17%12.30%All Stock
FSCT21.695Advent International (N/A)52.11%46.93%5.18%All Cash
CXDC1.15Faith Dawn Limited and Faith Horizon (N/A)0.004.35%0.00%4.35%All Cash
TECD142.99Apollo Global Management (APO)53.081.41%6.44%-5.03%All Cash
FIT6.38Google LLC (GOOG)1431.7215.20%20.29%-5.09%All Cash
GRUB63.88Just Eat Takeaway.com N.V. (TKAYF)99.316.63%24.26%-7.63%All Stock
TTPH2.63Melinta Therapeutics (N/A)-31.94%-23.18%-8.76%Special Conditions
LACQ12.5125GTWY Holdings Limited (N/A)-8.09%10.05%-18.14%Special Conditions

Deal Statistics:

Total Number of Deals Closed in 202069
Total Number of Deals Not Completed in 202010
Total Number of Pending Deals
Cash Deals25
Stock Deals15
Stock & Cash Deals3
Special Conditions3
Total Number of Pending Deals46
Total Deal Size$536.27 billion

New Deals:

  1. The acquisition of China XD Plastics Company Limited (CXDC) by Faith Dawn Limited and Faith Horizon in a going private transaction for $1.2 billion or $1.2 per share in cash.
  2. The acquisition of 58.com (WUBA) by Quantum Bloom Group for $5.77 billion or $56.00 per share in cash. We added WUBA as a potential deal to the Deals in the Works section on April 2, 2020, and the price after the news of the potential deal came out was $52.98.

Deal Updates:

  1. On June 15, 2020, First Horizon National (FHN) and IBERIABANK Corporation (IBKC) announced receipt of regulatory approval from the Board of Governors of the Federal Reserve System to complete their previously announced all-stock merger of equals.
  2. On June 16, 2020, Progenics Pharmaceuticals (PGNX) announced that its stockholders voted to approve its proposed merger with Lantheus Holdings (LNTH). The parties expect to close the merger on or about June 19, 2020.
  3. On June 18, 2020, according to Reuters, Australia’s antitrust regulator warned Google’s (GOOG) planned $2.1 billion acquisition of fitness tracker maker Fitbit (FIT) may give it too much of people’s data, potentially hurting competition in health and online advertising markets. EU antitrust regulators will decide by July 20 whether to clear the deal.

Closed Deals:

  1. The acquisition of EQM Midstream Partners (EQM) by Equitrans Midstream Corporation (ETRN) on June 17, 2020. It took 111 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
CDOR07/22/2019NexPoint Hospitality Trust (N/A)$11.10$4.2106/30/2020163.66%6637.24%
GNW10/23/2016China Oceanwide Holdings Group Co., Ltd. (N/A)$5.43$2.6806/30/2020102.61%4161.48%
FSCT02/06/2020Advent International (N/A)$33.00$21.69506/30/202052.11%2113.30%
GILT01/29/2020Comtech Telecommunications Corp. (CMTL)$8.52$6.3710/31/202133.82%24.84%
CETV10/27/2019PPF Group N.V. (N/A)$4.58$3.5706/30/202028.29%1147.37%
GRUB06/10/2020Just Eat Takeaway.com N.V. (TKAYF)$74.57$63.8803/31/202116.74%21.59%
FIT11/01/2019Google LLC (GOOG)$7.35$6.3806/30/202015.20%616.60%
PGNX10/02/2019Lantheus Holdings, Inc. (LNTH)$4.60$4.106/19/202012.13%-2213.59%
TIF11/25/2019LVMH Moët Hennessy Louis Vuitton SE (LVMUY)$135.00$120.8806/30/202011.68%473.73%
BREW11/12/2019Anheuser-Busch (N/A)$16.50$15.4312/31/20206.93%13.11%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I hold a long position in Tech Data Corporation (TECD). 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.

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