Merger Arbitrage Mondays – Forescout and Advent Settle Their Differences

Merger activity increased last week with three new deals announced and one deal closing.

The biggest highlight for last week was the acquisition of Maxim Integrated Products (MXIM) by Analog Devices (ADI) in an all stock deal for $21 billion, which is the largest deal so far this year.

There were two amendments announced last week. While Forescout Technologies (FSCT) and Advent International agreed to amend their merger agreement by reducing the deal price, Thermo Fisher Scientific (TMO) and QIAGEN (QGEN) amended their agreement by increasing the original offer price.

The original deal for Forescout Technologies (FSCT) was priced at $33 per share in cash. Advent attempted to walk away from the deal in mid-May, which caused the spread on the deal to expand to over 66% at some point. Forescout Technologies filed a lawsuit claiming Advent had violated the terms of the merger agreement. With this newly negotiated deal, that lawsuit has now been dismissed.

Forescout Advent Deal Spread History

Forescout Advent Deal Spread History (source: InsideArbitrage.com)

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section last week.

Weekly Spread Changes:

The table below shows weekly spread changes between July 10, 2020, and July 17, 2020.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
CDOR 3.83 NexPoint Hospitality Trust (N/A) 189.82% 183.16% 6.66% All Cash
QGEN 48.13 Thermo Fisher Scientific Inc. (TMO) 395.4 2.14% -4.35% 6.49% All Cash
INWK 2.83 HH Global Group Limited (N/A) 0.00 6.01% 0.00% 6.01% All Cash
MXIM 70.04 Analog Devices, Inc. (ADI) 116.75 5.01% 0.00% 5.01% All Stock
GRUB 70.15 Just Eat Takeaway.com N.V. (TKAYF) 106.7 16.61% 12.58% 4.03% All Stock
TTPH 2.55 La Jolla Pharmaceutical Company (LJPC) 4.7 -21.57% -17.70% -3.87% Special Conditions
QES 0.9852 KLX Energy Services Holdings, Inc. (KLXE) 1.86 -8.55% -0.37% -8.18% All Stock
GILT 5.48 Comtech Telecommunications Corp. (CMTL) 15.96 55.56% 65.67% -10.11% Cash Plus Stock
GNW 2.18 China Oceanwide Holdings Group Co., Ltd. (N/A) 149.08% 159.81% -10.73% All Cash
FSCT 28.9 Advent International (N/A) 0.35% 33.12% -32.77% All Cash

Deal Statistics:

Total Number of Deals Closed in 2020 79
Total Number of Deals Not Completed in 2020 12
Total Number of Pending Deals
Cash Deals 25
Stock Deals 11
Stock & Cash Deals 3
Special Conditions 2
Total Number of Pending Deals 41
Aggregate Deal Consideration $565.08 billion

New Deals:

  1. The acquisition of Maxim Integrated Products (MXIM) by Analog Devices (ADI) for $21 billion in an all stock deal. Under the terms of the agreement, Maxim stockholders will receive 0.630 of a share of ADI common stock for each share of Maxim common stock they hold at the closing of the transaction.
  2. The acquisition of Benefytt Technologies (BFYT) by Madison Dearborn Partners for $670.69 million or $31.00 per share in cash.
  3. The acquisition of InnerWorkings (INWK) by HH Global Group Limited for $245.7 million or $3.00 per share in cash.

Deal Updates:

  1. On July 15, 2020, Forescout Technologies (FSCT) and Advent International have agreed to amend the terms of their previously announced transaction. Under the terms of the revised merger agreement, Advent will acquire all of the outstanding shares of Forescout common stock for a price of $29.00 per share. The transaction is expected to close in the third quarter of 2020.
  2. On July 16, 2020, Thermo Fisher Scientific (TMO) and QIAGEN (QGEN) announced that they have entered into an amendment to their acquisition agreement. The amendment provides for an increase from the original offer price of €39.00 to a new price of €43.00 per QIAGEN share in cash.
  3. On July 17, 2020, Franklin Resources (BEN) and Legg Mason (LM) announced that all conditions to the closing of their previously announced merger transaction have been satisfied and the transaction is expected to close on July 31, 2020.
  4. On July 17, 2020, Eldorado Resorts (ERI) and Caesars Entertainment Corporation (CZRannounced the preliminary results of the elections made by Caesars stockholders as to the form of consideration they wish to receive in connection with the previously announced merger. Based on the information available as of the Election Deadline, 55.25% of the shares deemed outstanding for purposes of the election, elected to receive the Cash Election Consideration; 39.17% of the shares deemed outstanding for purposes of the election, elected to receive the Stock Election Consideration and 5.57% of the shares deemed outstanding for purposes of the election, either did not submit valid elections.
  5. On July 17, 2020, E*TRADE Financial Corporation (ETFC) announced that its stockholders have voted to adopt the merger agreement with Morgan Stanley (MS). The Company expects the acquisition to close in the fourth quarter of 2020.

Closed Deals:

  1. The acquisition of Standard Diversified (SDI) by Turning Point Brands (TPB) on July 16, 2020. It took 99 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 $3.83 09/30/2020 189.82% 949.09%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.18 09/30/2020 149.08% 745.41%
GILT 01/29/2020 Comtech Telecommunications Corp. (CMTL) $8.52 $5.48 10/31/2021 55.56% 43.24%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $3.86 09/30/2020 18.65% 93.26%
GRUB 06/10/2020 Just Eat Takeaway.com N.V. (TKAYF) $81.83 $70.15 03/31/2021 16.65% 23.84%
BREW 11/12/2019 Anheuser-Busch (N/A) $16.50 $14.845 12/31/2020 11.15% 24.66%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (LVMUY) $135.00 $121.75 07/31/2020 10.88% 331.02%
FIT 11/01/2019 Google LLC (GOOG) $7.35 $6.75 09/30/2020 8.89% 44.44%
LACQ 12/30/2019 GTWY Holdings Limited (N/A) $11.50 $10.6 12/31/2020 8.49% 18.78%
INWK 07/16/2020 HH Global Group Limited (N/A) $3.00 $2.83 12/31/2020 6.01% 13.29%

List of all pending deals:

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

Disclaimer: 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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