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.

Deal Statistics:

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:

List of all pending deals:

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

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