Merger Arbitrage Mondays – QIAGEN Shareholders Want More

Merger activity increased significantly last week with eight new deals announced and one deal terminated.

This is the highest number of deals announced in a single week this year but most of these deals were relatively small compared to the multi-billion dollar deals we saw in the week prior. Two of the new deals announced were from the energy sector, one of the hardest hit sectors during the COVID-19 pandemic. Based in Irving, Texas, Montage Resources Corporation is an independent oil and natural gas exploration and production company. On August 12, 2020, Montage Resources Corporation (MR) agreed to be acquired by Southwestern Energy Company (SWN) in an all stock deal worth $835 million.

Another highlight from last week was Thermo Fisher Scientific (TMO) terminating its acquisition agreement with QIAGEN (QGEN) after QIAGEN shareholders refused to tender their shares.

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

There was one new deal announced in the Deals in the Works section last week.

Weekly Spread Changes:

The table below shows weekly spread changes between August 7, 2020, and August 14, 2020.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
ONDK 1.7 Enova International, Inc. (ENVA) 18.13 5.17% 1.49% 3.68% Cash Plus Stock
GILT 5.65 Comtech Telecommunications Corp. (CMTL) 17.6 53.32% 50.60% 2.72% Cash Plus Stock
CDOR 4.5 NexPoint Hospitality Trust (N/A) 146.67% 166.19% -19.52% All Cash
GNW 2.57 China Oceanwide Holdings Group Co., Ltd. (N/A) 111.28% 131.06% -19.78% All Cash

Deal Statistics:

Total Number of Deals Closed in 2020 88
Total Number of Deals Not Completed in 2020 14
Total Number of Pending Deals
Cash Deals 28
Stock Deals 13
Stock & Cash Deals 5
Special Conditions 3
Total Number of Pending Deals 49
Aggregate Deal Consideration $622.29 billion

New Deals:

  1. The acquisition of Sunworks (SUNW) by The Peck Company Holdings (PECK) for $13.74 million in an all stock deal. Under the terms of the agreement, each share of Sunworks common stock will be exchanged for 0.185171 shares of Peck common stock.
  2. The merger of Linx (LINX) and StoneCo (STNE) for $912.35 million. The Transaction will be implemented through a Brazilian merger of shares, whereby each Linx common share will be contributed to STNE in exchange for 1 newly issued STNE Class A preferred share, and 1 STNE newly issued Class B preferred share. Immediately after the Merger, each STNE Class A preferred share will be redeemed for a cash payment of R$30.39, and each STNE Class B preferred share will be redeemed for 0.0126774 Stone Class A share. The Base Exchange Ratio is calculated on a fully diluted basis and represents a total consideration of R$33.7625 for each Linx share, considering Stone share price as of August 7, 2020. We are treating this as a “special conditions” type of deal.
  3. The merger of TransAtlantic Petroleum (TAT) by TAT Holdco LLC and TAT Merger Sub LLC for $7.54 million or $0.13 per share in cash.
  4. The merger of MVC Capital (MVC) and Barings BDC (BBDC) for $145.5 million in a cash plus stock deal. Under the terms of the agreement, MVC Capital stockholders will receive 0.94024 Barings BDC shares for each MVC Capital share. In addition, Barings LLC will pay approximately $7 million in cash, or $0.39492 per share, directly to MVC Capital stockholders at closing.
  5. The acquisition of Pfenex (PFNX) by Ligand Pharmaceuticals Incorporated (LGND) for $438 million or $12.00 per share in cash. Ligand will also pay holders of Pfenex common stock a price of $2.00 per share, or $78 million, as a Contingent Value Right (CVR) in the event a predefined regulatory milestone is achieved by December 31, 2021. We are treating this as a “special conditions” type of deal on account of the CVR.
  6. The acquisition of Cellular Biomedicine Group (CBMG) in a going private transaction for $364.68 million or $19.75 per share in cash.
  7. The acquisition of Montage Resources Corporation (MR) by Southwestern Energy Company (SWN) for $835.49 million. Under the terms of the agreement, Montage Resources shareholders will receive 1.8656 shares of Southwestern for each Montage Resources share.
  8. The acquisition of Principia Biopharma (PRNB) by Sanofi (SNY) for $3.68 billion or $100 per share in cash. We added PRNB as a potential deal to the Deals in the Works section on July 16, 2020, and the price after the news of the potential deal came out was $84.10.

Deal Updates:

  1. August 12, 2020: The Federal Trade Commission (FTC) granted early termination of the required waiting period under the Hart-Scott-Rodino Act with respect to the acquisition of Majesco (MJCO) by Thoma Bravo.
  2. August 12, 2020: According to Bloomberg, Israel’s energy minister is “confident” the country’s regulators will allow Chevron (CVX) to operate the local natural gas assets of Noble Energy (NBL), despite a campaign by environmentalists to stop that from happening.

Deals Terminated:

  1. August 13, 2020: Thermo Fisher Scientific (TMO) announced that its offer to acquire all of the ordinary shares of QIAGEN (QGEN) has lapsed. Thermo Fisher has terminated the acquisition agreement with QIAGEN, and QIAGEN will pay to Thermo Fisher an expense reimbursement payment of $95 million in cash in accordance with the terms of the acquisition agreement.

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 $4.5 09/30/2020 146.67% 1216.67%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.57 09/30/2020 111.28% 923.15%
GILT 01/29/2020 Comtech Telecommunications Corp. (CMTL) $8.66 $5.65 10/31/2021 53.32% 44.23%
FIT 11/01/2019 Google LLC (GOOG) $7.35 $6.34 12/31/2020 15.93% 42.75%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $4.05 10/27/2020 13.09% 67.28%
PRNB 08/17/2020 Sanofi (SNY) $100.00 $90.74 12/31/2020 10.20% 27.39%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (LVMUY) $135.00 $125 09/30/2020 8.00% 66.36%
MXIM 07/13/2020 Analog Devices, Inc. (ADI) $73.82 $68.6 06/30/2021 7.61% 8.77%
CBMG 08/12/2020 CBMG management (N/A) $19.75 $18.51 12/31/2020 6.70% 17.98%
BREW 11/12/2019 Anheuser-Busch (N/A) $16.50 $15.6 12/31/2020 5.77% 15.48%

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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