Merger Arbitrage Mondays – Merger Activity Picks Up With Large Public And Private Deals

Merger activity decreased last week with two new deals announced but one of these was a blockbuster deal worth $21 billion and at a 108% premium to Friday’s closing price. None of the pending active deals were completed last week.

There was also a private deal nearly double the size of the public ones with NVIDIA agreeing to buy Arm Holdings from SoftBank Group for $40 billion.

Baring Private Equity Asia announced the acquisition of Virtusa Corporation (VRTU) in an all cash deal valued at $2 billion, representing a premium of approximately 27% to Virtusa Shareholders.

The highlight for last week was the dispute between LVMH Moët Hennessy Louis Vuitton and Tiffany. According to Reuters, LVMH decided to walk away from the multi-billion-dollar deal. Tiffany then said it is suing LVMH and seeking a court order requiring the French group to abide by its contractual obligation under the deal to complete the transaction on the agreed terms. Owing to these events, there has been a significant change in the spread for this deal but I am surprised Tiffany is not down more on this potential deal break. We are going to continue to track this as an active deal until the lawsuit is settled.

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 September 4, 2020, and September 11, 2020.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
CDOR 4.28 NexPoint Hospitality Trust (N/A) 159.35% 150.56% 8.79% All Cash
TAT 0.2245 TAT Holdco LLC and TAT Merger Sub LLC (N/A) 0.00 -42.09% -44.21% 2.12% All Cash
CBMG 18.21 CBMG management (N/A) 0.00 8.46% 6.76% 1.70% All Cash
LINX 6.64 StoneCo Ltd. (STNE) 50.49 -1.05% -2.23% 1.18% Special Conditions
DCOM 12.61 Bridge Bancorp, Inc. (BDGE) 19.54 0.41% -0.76% 1.17% All Stock
ACIA 68.49 Cisco Systems, Inc. (CSCO) 39.88 2.20% 4.76% -2.56% All Cash
MR 4.43 Southwestern Energy Company (SWN) 2.34 -1.46% 1.48% -2.94% All Stock
GILT 5.41 Comtech Telecommunications Corp. (CMTL) 14.42 55.17% 60.67% -5.50% Cash Plus Stock
GNW 3.71 China Oceanwide Holdings Group Co., Ltd. (N/A) 46.36% 56.94% -10.58% All Cash
SUNW 0.6902 The Peck Company Holdings, Inc. (PECK) 3.04 -18.44% 0.23% -18.67% All Stock

Deal Statistics:

Total Number of Deals Closed in 2020 94
Total Number of Deals Not Completed in 2020 14
Total Number of Pending Deals
Cash Deals 32
Stock Deals 14
Stock & Cash Deals 4
Special Conditions 3
Total Number of Pending Deals 53
Aggregate Deal Consideration $661.59 billion

New Deals:

  1. The acquisition of Virtusa Corporation (VRTU) by Baring Private Equity Asia for $2 billion or $51.35 per share in cash.
  2. The acquisition of Immunomedics (IMMU) by Gilead Sciences (GILD) for $21 billion or $88.00 per share in cash.

Deal Updates:

  1. On September 8, 2020, 58.com (WUBA) announced that the Company’s shareholders voted in favor of the previously announced agreement and plan of merger with Quantum Bloom Group.
  2. On September 9, 2020, Otelco (OTEL) announced that a virtual special meeting of its stockholders to consider and vote on a proposal to adopt the Agreement and Plan of Merger with Oak Hill Capital will be held online via live webcast on October 9, 2020.
  3. On September 9, 2020, The Federal Trade Commission (FTC) has granted early termination of the required waiting period under the Hart-Scott-Rodino Act with respect to the acquisition of Montage Resources Corporation (MR) by Southwestern Energy Company (SWN).
  4. On September 11, 2020, Sunrun (RUN) and Vivint Solar (VSLR) announced that they have received notification from the Department of Justice of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  5. On September 11, 2020, Third Point Reinsurance (TPRE) announced that it has entered into a definitive agreement with the holders of Sirius International Insurance Group (SG) Series B Preference Shares, pursuant to which such holders have agreed to remain investors in the Company upon the closing of the proposed merger contemplated by the Merger Agreement between the Company and Sirius.

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 $4.28 09/30/2020 159.35% 3421.25%
GILT 01/29/2020 Comtech Telecommunications Corp. (CMTL) $8.39 $5.41 10/31/2021 55.17% 48.76%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.71 09/30/2020 46.36% 995.40%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (LVMUY) $135.00 $113.81 12/31/2020 18.62% 62.35%
FIT 11/01/2019 Google LLC (GOOG) $7.35 $6.29 12/31/2020 16.85% 56.43%
MXIM 07/13/2020 Analog Devices, Inc. (ADI) $71.69 $66 06/30/2021 8.63% 10.86%
CBMG 08/12/2020 CBMG management (N/A) $19.75 $18.21 12/31/2020 8.46% 28.32%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $4.32 10/27/2020 6.02% 49.93%
BREW 11/12/2019 Anheuser-Busch (N/A) $16.50 $15.62 12/31/2020 5.63% 18.87%
INWK 07/16/2020 HH Global Group Limited (N/A) $3.00 $2.84 12/31/2020 5.63% 18.87%

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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