Merger activity decreased last week with six new deals announced and four deals completed. In addition to the six new deals, there were four potential deals in the works and four new SPAC business combinations announced last week.
Google finally completed the acquisition of Fitbit last week after facing multiple hurdles. According to Reuters, the U.S. Justice Department will continue to investigate the buyout as Google still awaits approval from the Australian government. This merger had a very wide spread at various times since its announcement on November 1, 2019 and the spread crested 20% a few times as you can see from the spread history below. I felt that the regulatory hurdles the acquisition would face worldwide would make it difficult for Google to consummate this deal but they prevailed. We have seen with several deals in the last year that were perceived as risky but managed to close.
In one of the more unusual moves we have seen with mergers in the recent past, Acacia Communications (ACIA) terminated its merger agreement with Cisco Systems (CSCO) because the deal had not received approval from the Chinese government and Acacia did not have an obligation to close the merger before the arrival of the January 8, 2021 extended end date. Cisco Systems must have had its heart set on this acquisition because just 3 days after the previous all cash deal for $70/share was terminated, the two companies announced an amendment to the merger agreement where Cisco would acquire Acacia for $115 per share in cash, a whopping 64% premium to the previous deal price.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours. There were four new deals announced in the Deals in the Works section last week.
SPAC Arbitrage
The SPAC IPO frenzy continued with 24 new IPOs filed last week and 4 new SPAC business combinations announced. You can find the new SPAC IPO announcements in our new SPACs tool here.
Weekly Spread Changes:
The table below shows weekly spread changes between January 8, 2020, and January 15, 2020.
Symbol | Quote | Acquiring Company | Acquiring Company Quote | Current Spread | Last Week Spread | Spread Change Weekly | Deal Type |
---|---|---|---|---|---|---|---|
APHA | 12.42 | Tilray, Inc. (TLRY) | 19.7 | 32.94% | 10.61% | 22.33% | All Stock |
NEOS | 0.764 | Aytu BioScience, Inc. (AYTU) | 7.44 | 5.95% | 0.59% | 5.36% | All Stock |
GRUB | 71.06 | Just Eat Takeaway.com N.V. (TKAYY) | 10.89 | 2.83% | -0.54% | 3.37% | All Stock |
SMTX | 5.89 | H.I.G. Capital (N/A) | 2.55% | 0.00% | 2.55% | All Cash | |
BPFH | 12.7 | SVB Financial Group (SIVB) | 461.43 | -0.63% | -2.66% | 2.03% | Cash Plus Stock |
EIDX | 126.51 | BridgeBio Pharma, Inc. (BBIO) | 68.61 | -42.09% | -39.43% | -2.66% | Special Conditions |
NEWA | 3.59 | Crouching Tiger Holding Limited (N/A) | 1.67% | 5.19% | -3.52% | All Cash | |
HPR | 10.61 | Bonanza Creek Energy, Inc. (BCEI) | 22.35 | -75.99% | -71.92% | -4.07% | All Stock |
CXDC | 1.07 | Faith Dawn Limited and Faith Horizon (N/A) | 12.15% | 18.81% | -6.66% | All Cash | |
DOYU | 12.14 | HUYA Inc. (HUYA) | 21.96 | 32.05% | 39.71% | -7.66% | All Stock |
Deal Statistics:
Total Number of Deals Closed in 2021 | 8 |
Total Number of Pending Deals | |
Cash Deals | 49 |
Stock Deals | 19 |
Stock & Cash Deals | 9 |
Special Conditions | 5 |
Total Number of Pending Deals | 82 |
Aggregate Deal Consideration | $421.91 billion |
New Deals:
Deal Updates:
Closed Deals:
Top 10 deals with largest spreads:
Symbol | Announced Date | Acquiring Company | Closing Price | Last Price | Closing Date | Profit | Annualized Profit |
---|---|---|---|---|---|---|---|
GNW | 10/23/2016 | China Oceanwide Holdings Group Co., Ltd. (N/A) | $5.43 | $3.11 | 01/31/2021 | 74.60% | 1944.88% |
APHA | 12/16/2020 | Tilray, Inc. (TLRY) | $16.51 | $12.42 | 06/30/2021 | 32.94% | 73.30% |
DOYU | 10/12/2020 | HUYA Inc. (HUYA) | $16.03 | $12.14 | 06/30/2021 | 32.05% | 71.33% |
PRVL | 12/15/2020 | Eli Lilly and Company (LLY) | $26.50 | $22.93 | 03/31/2021 | 15.57% | 77.85% |
GSUM | 10/01/2020 | Gridsum Corporation (N/A) | $2.00 | $1.75 | 03/31/2021 | 14.29% | 71.43% |
CXDC | 06/15/2020 | Faith Dawn Limited and Faith Horizon (N/A) | $1.20 | $1.07 | 02/07/2021 | 12.15% | 211.17% |
XLNX | 10/27/2020 | Advanced Micro Devices, Inc. (AMD) | $152.02 | $136.6 | 12/31/2021 | 11.29% | 11.84% |
OSN | 12/17/2020 | New Ossen Group Limited (N/A) | $5.10 | $4.66 | 06/30/2021 | 9.44% | 21.01% |
CBMG | 08/12/2020 | CBMG management (N/A) | $19.75 | $18.11 | 03/31/2021 | 9.06% | 45.28% |
WLTW | 03/09/2020 | Aon plc (AON) | $224.56 | $206.65 | 06/30/2021 | 8.67% | 19.29% |
List of all pending deals:
Conclusion:
M&A activity continues to pick up momentum as we move into the third week of the year. With six new deals announced in the past week, the aggregate deal consideration increased to $421.91 billion.
Disclaimer: I have long positions in Otelco (OTEL), Zagg (ZAGG), Prevail Therapeutics (PRVL) and B. Riley Financial (RILY). 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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