Merger Arbitrage Mondays – Siemens Healthineers to acquire Varian Medical Systems

Merger activity increased last week with four new deals announced and seven deals closing.

Over the past month, we have seen early signs of a pickup in new deals and two large deals announced in the energy and healthcare sectors. The acquisition of Noble Energy by Chevron was a significant deal announced in the energy sector in the third week of July. The acquisition of Varian Medical Systems by Siemens for $16.4 billion is the largest health care deal announced this year.

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 July 24, 2020, and July 31, 2020.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
GNW 2.04 China Oceanwide Holdings Group Co., Ltd. (N/A) 166.18% 147.95% 18.23% All Cash
ONDK 1.46 Enova International, Inc. (ENVA) 16.09 9.61% 0.00% 9.61% Cash Plus Stock
FIT 6.54 Google LLC (GOOG) 1482.96 12.39% 8.09% 4.30% All Cash
OTEL 11.51 Oak Hill Capital (N/A) 0.00 2.09% 0.00% 2.09% All Cash
DLPH 14.99 BorgWarner Inc. (BWA) 36.6 5.16% 3.26% 1.90% All Stock
CETV 3.98 PPF Group N.V. (N/A) 15.08% 18.65% -3.57% All Cash
GRUB 72.24 Just Eat Takeaway.com N.V. (TKAYF) 106.7 -0.89% 3.99% -4.88% All Stock
CNXM 8.96 CNX Resources Corporation (CNX) 9.65 -5.22% 0.00% -5.22% All Stock
GILT 5.59 Comtech Telecommunications Corp. (CMTL) 16.42 53.19% 65.29% -12.10% Cash Plus Stock
CDOR 4.15 NexPoint Hospitality Trust (N/A) 167.47% 201.63% -34.16% All Cash

Deal Statistics:

Total Number of Deals Closed in 2020 88
Total Number of Deals Not Completed in 2020 13
Total Number of Pending Deals
Cash Deals 25
Stock Deals 10
Stock & Cash Deals 3
Total Number of Pending Deals 38
Aggregate Deal Consideration $594.73 billion

New Deals:

  1. The acquisition of Otelco (OTEL) by Oak Hill Capital for $105.6 million or $11.75 per share in cash.
  2. The acquisition of CNX Midstream Partners (CNXM) by CNX Resources Corporation (CNX) for $357 million in an all stock deal. Under the terms of the agreement, each outstanding common unit of CNX Midstream that CNX does not already own will be converted into 0.88 shares of CNX common stock.
  3. The acquisition of On Deck Capital (ONDK) by Enova International (ENVA) for $90 million in an all stock deal. Under the terms of the agreement, OnDeck shareholders will receive $0.12 cents per share in cash and 0.092 shares of Enova common stock for each share of OnDeck held.
  4. The acquisition of Varian Medical Systems (VAR) by Siemens Healthineers AG for $16.4 billion or $177.50 per share in cash.

Deal Updates:

  1. On July 25, 2020, Tiffany (TIFreceived an additional regulatory approval necessary for the completion of its proposed acquisition by LVMH Moët Hennessy-Louis Vuitton. The State Administration for Market Regulation of China decided that it will not prohibit the Merger. The transaction remains subject to receiving additional regulatory clearances by the European Commission, the Japan Fair Trade Commission, the Mexican competition authority (Comisión Federal de Competencia Económica) and the Taiwan Fair Trade Commission. The transaction also remains subject to the satisfaction or waiver of other customary closing conditions.
  2. On July 29, 2020, Brookfield Renewable Partners (BEP) and TerraForm Power (TERP) jointly announced that TERP’s stockholders voted to approve the previously announced merger transactions with Brookfield Renewable.  The Merger is expected to close on July 31.
  3. July 29, 2020: LogMeIn (LOGM) and Francisco Partners have received the final regulatory approvals required to complete the transaction and now anticipate the merger to close later in the third quarter of 2020.
  4. July 30, 2020: According to Reuters, Google’s (GOOG) bid for Fitbit (FIT) will face a full-scale EU antitrust investigation next week.

Closed Deals:

  1. The acquisition of Quintana Energy Services (QES) by KLX Energy Services Holdings (KLXE) on July 28, 2020. It took 85 days for this deal to be completed.
  2. The acquisition of Tetraphase Pharmaceuticals (TTPH) by La Jolla Pharmaceutical Company (LJPC) on July 29, 2020. It took 35 days for this deal to be completed.
  3. The acquisition of El Paso Electric Company (EE) by J.P. Morgan Investment Management on July 29, 2020. It took 422 days for this deal to be completed.
  4. The acquisition of GAIN Capital Holdings (GCAP) by INTL FCStone (INTL) on July 31, 2020. It took 155 days for this deal to be completed.
  5. The acquisition of Legg Mason (LM) by Franklin Resources (BEN) on July 31, 2020. It took 164 days for this deal to be completed.
  6. The acquisition of TerraForm Power (TERP) by Brookfield Renewable Partners (BEP) on July 31, 2020. It took 137 days for this deal to be completed.
  7. The acquisition of SB One Bancorp (SBBX) by Provident Financial Services (PFS) on July 31, 2020. It took 141 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 $4.15 09/30/2020 167.47% 1053.91%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.04 09/30/2020 166.18% 1045.77%
GILT 01/29/2020 Comtech Telecommunications Corp. (CMTL) $8.56 $5.59 10/31/2021 53.19% 42.76%
VAR 08/02/2020 Siemens Healthineers AG (N/A) $177.50 $142.72 06/30/2021 24.37% 26.87%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $3.98 09/30/2020 15.08% 94.87%
FIT 11/01/2019 Google LLC (GOOG) $7.35 $6.54 09/30/2020 12.39% 77.94%
BREW 11/12/2019 Anheuser-Busch (N/A) $16.50 $14.81 12/31/2020 11.41% 27.77%
ONDK 07/28/2020 Enova International, Inc. (ENVA) $1.60 $1.46 12/31/2020 9.61% 23.38%
INWK 07/16/2020 HH Global Group Limited (N/A) $3.00 $2.75 12/31/2020 9.09% 22.12%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (LVMUY) $135.00 $125.36 09/30/2020 7.69% 48.39%

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.

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

Leave A Comment

You must be logged in to post a comment.