Merger Arbitrage Mondays – Two Chinese Companies Choose To Go Private

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.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
GNW 2.68 China Oceanwide Holdings Group Co., Ltd. (N/A) 102.61% 72.38% 30.23% All Cash
CDOR 4.21 NexPoint Hospitality Trust (N/A) 163.66% 149.44% 14.22% All Cash
PGNX 4.1 Lantheus Holdings, Inc. (LNTH) 14.83 12.13% -0.17% 12.30% All Stock
FSCT 21.695 Advent International (N/A) 52.11% 46.93% 5.18% All Cash
CXDC 1.15 Faith Dawn Limited and Faith Horizon (N/A) 0.00 4.35% 0.00% 4.35% All Cash
TECD 142.99 Apollo Global Management (APO) 53.08 1.41% 6.44% -5.03% All Cash
FIT 6.38 Google LLC (GOOG) 1431.72 15.20% 20.29% -5.09% All Cash
GRUB 63.88 Just Eat Takeaway.com N.V. (TKAYF) 99.3 16.63% 24.26% -7.63% All Stock
TTPH 2.63 Melinta Therapeutics (N/A) -31.94% -23.18% -8.76% Special Conditions
LACQ 12.5125 GTWY Holdings Limited (N/A) -8.09% 10.05% -18.14% Special Conditions

Deal Statistics:

Total Number of Deals Closed in 2020 69
Total Number of Deals Not Completed in 2020 10
Total Number of Pending Deals
Cash Deals 25
Stock Deals 15
Stock & Cash Deals 3
Special Conditions 3
Total Number of Pending Deals 46
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:

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 $4.21 06/30/2020 163.66% 6637.24%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.68 06/30/2020 102.61% 4161.48%
FSCT 02/06/2020 Advent International (N/A) $33.00 $21.695 06/30/2020 52.11% 2113.30%
GILT 01/29/2020 Comtech Telecommunications Corp. (CMTL) $8.52 $6.37 10/31/2021 33.82% 24.84%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $3.57 06/30/2020 28.29% 1147.37%
GRUB 06/10/2020 Just Eat Takeaway.com N.V. (TKAYF) $74.57 $63.88 03/31/2021 16.74% 21.59%
FIT 11/01/2019 Google LLC (GOOG) $7.35 $6.38 06/30/2020 15.20% 616.60%
PGNX 10/02/2019 Lantheus Holdings, Inc. (LNTH) $4.60 $4.1 06/19/2020 12.13% -2213.59%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (LVMUY) $135.00 $120.88 06/30/2020 11.68% 473.73%
BREW 11/12/2019 Anheuser-Busch (N/A) $16.50 $15.43 12/31/2020 6.93% 13.11%

List of all pending deals:

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

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria

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