Merger Arbitrage Mondays – Chevron Proposes to Buy Out Noble Midstream Partners

Merger activity increased last week with four new deals announced and one deal completed. The action was mostly in the red hot SPAC area where we saw the pace of IPOs and business combination announcements continue unabated.

On Friday, February 5, 2020, Chevron Corporation (CVXsubmitted a non-binding proposal to the Board of Directors of Noble Midstream Partners (NBLX), to acquire the company through a merger transaction at a value of $12.47 per share. This announcement came less than a week after the chief executives of Exxon Mobil (XOM) and Chevron spoke about combining the two companies for what could be one of the largest corporate mergers ever.

Another highlight from last week was an announcement from the Federal Trade Commission, with support from the Antitrust Division of the U.S. Department of Justice, stating that they will be temporarily suspending early termination to filings made under the Hart-Scott-Rodino Act. This could translate into mergers taking slightly longer to close, all things being equal.

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.

SPAC Arbitrage

There were 27 new IPOs filed last week and 12 new SPAC business combinations announced. You can find the new SPAC IPO announcements in our new SPACs tool here.

  1. Wheels Up Partners Holdings entered into a definitive agreement to become publicly-traded via a merger with special purpose acquisition company, Aspirational Consumer Lifestyle Corp (ASPL).
  2. Microvast and Tuscan Holdings (THCB) entered into a definitive merger agreement that will result in Microvast becoming a publicly listed company.
  3. Fertitta Entertainment and FAST Acquisition (FST) have entered into a definitive merger agreement that will result in Fertitta Entertainment becoming a publicly listed company
  4. PLAYSTUDIOS, Inc. and Acies Acquisition (ACAC) entered into a definitive merger agreement that will result in PLAYSTUDIOS becoming a publicly listed company.
  5. Leisure Acquisition Corp. (LACQ) entered into a definitive agreement to acquire Ensysce Biosciences, Inc. Upon closing, Leisure intends to change its name to Ensysce Biosciences, Inc. and remain on the Nasdaq Capital Market, listed under the new ticker symbol ENSC.
  6. Nexters Global Limited and Kismet Acquisition One Corp. (KSMTUentered into a definitive business combination agreement that will result in Nexters becoming a publicly-listed company on the Nasdaq Global Select Market under a new GDEV ticker.
  7. Otonomo Technologies and Software Acquisition Group, Inc. II (SAIIentered into a definitive agreement for a business combination.
  8. Astra, the fastest privately-funded company in history to demonstrate orbital launch capability, and Holicity (HOLUUannounced a definitive business combination agreement that will result in Astra becoming a publicly traded company.
  9. REE Automotive and 10X Capital Venture Acquisition Corp (VCVC) announced they have entered into a merger agreement for a business combination that would result in REE becoming a publicly listed company. Following the close, NASDAQ will list the combined company under the ticker “REE”.
  10. CCC Information Services and Dragoneer Growth Opportunities (DGNR) entered into a definitive merger agreement. The combined company is expected to be renamed CCC Intelligent Solutions Holdings Inc. and is expected to be listed on the New York Stock Exchange.
  11. Payoneer and FTAC Olympus Acquisition (FTOCU) entered into a definitive agreement and plan of reorganization.
  12. 23andMe, Inc., a leading consumer genetics and research company, and VG Acquisition (VGACentered into a definitive merger agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between January 29, 2021, and February 5, 2021.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
APHA 16.67 Tilray, Inc. (TLRY) 25.72 29.31% 24.55% 4.76% All Stock
HPR 11.12 Bonanza Creek Energy, Inc. (BCEI) 23.64 -75.76% -78.35% 2.59% All Stock
QEP 3.18 Diamondback Energy, Inc. (FANG) 64.45 1.34% -0.54% 1.88% All Stock
BPFH 13.17 SVB Financial Group (SIVB) 490.91 0.93% -0.89% 1.82% Cash Plus Stock
WDR 25.01 Macquarie Asset Management (N/A) -0.04% -1.15% 1.11% All Cash
LINX 7.07 StoneCo Ltd. (STNE) 85.71 -11.60% -8.09% -3.51% Special Conditions
CXDC 1.13 Faith Dawn Limited and Faith Horizon (N/A) 6.19% 10.09% -3.90% All Cash
NEWA 3.68 Crouching Tiger Holding Limited (N/A) -0.82% 3.69% -4.51% All Cash
DOYU 14.49 HUYA Inc. (HUYA) 26.77 34.87% 43.94% -9.07% All Stock
GNW 3.7 China Oceanwide Holdings Group Co., Ltd. (N/A) 46.76% 91.20% -44.44% All Cash

Deal Statistics:

Total Number of Deals Closed in 2021 16
Total Number of Deals Not Completed in 2021 1
Total Number of Pending Deals
Cash Deals 50
Stock Deals 16
Stock & Cash Deals 10
Special Conditions 4
Total Number of Pending Deals 80
Aggregate Deal Consideration $452.6 billion

New Deals:

  1. The acquisition of Viela Bio (VIE) by Horizon Therapeutics Public Limited Company (HZNP) for $2.67 billion or $53 per share in cash.
  2. The acquisition of Ruhnn Holding Limited (RUHN) by RUNION Holding Limited in a going-private transaction for $179.29 million or $3.50 per share in cash. We added RUHN as a potential deal to the Deals in the Works section on November 25, 2020, and the price after the news of the potential deal came out was $2.8.
  3. The acquisition of GW Pharmaceuticals (GWPH) by Jazz Pharmaceuticals (JAZZ) for $7.2 billion. Under the terms of the agreement, holders of GW ADSs, which each represent 12 GW ordinary shares, will be entitled to receive $220 for each GW ADS, of which $200 will be paid in cash and $20 in Jazz ordinary shares. The stock portion of the deal is subject to a collar based on a price range of $139.72 to $170.76 per Jazz ordinary share. We are classifying this as a “special conditions” deal.
  4. The acquisition of CoreLogic (CLGX) by Stone Point Capital and Insight Partners for $7.64 billion or $80 per share in cash. We added CLGX as a potential deal to the Deals in the Works section on September 14, 2020, and the price after the news of the potential deal came out was $67.52.

Deal Updates:

  1. February 1, 2021: According to the EC website, the European Commission’s phase 1 review of Siemens Healthineers planned purchase of Varian Medical (VAR) has been extended until February 19, 2021.
  2. On February 2, 2021, AVANGRID (AGR) confirmed that it has received clearance from the Committee on Foreign Investment in the United States (CFIUS) after the conclusion of the initial review period in relation to the proposed merger combination with PNM Resources (PNM).

Closed Deals:

  1. The acquisition of Norbord (OSB) by West Fraser Timber on February 1, 2021. It took 74 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
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.7 01/31/2021 46.76% -2438.03%
DOYU 10/12/2020 HUYA Inc. (HUYA) $19.54 $14.49 06/30/2021 34.87% 88.99%
APHA 12/16/2020 Tilray, Inc. (TLRY) $21.56 $16.67 06/30/2021 29.31% 74.81%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $151.49 $136.48 12/31/2021 11.00% 12.27%
IPHI 10/29/2020 Marvell Technology Group Ltd. (MRVL) $182.27 $165.5 12/31/2021 10.13% 11.31%
GSUM 10/01/2020 Gridsum Corporation (N/A) $2.00 $1.83 03/31/2021 9.29% 65.21%
CHNG 01/06/2021 UnitedHealth Group Incorporated (UNH) $25.75 $23.8 12/31/2021 8.19% 9.15%
WLTW 03/09/2020 Aon plc (AON) $241.08 $223.91 06/30/2021 7.67% 19.57%
ALXN 12/12/2020 AstraZeneca (AZN) $165.64 $153.92 09/30/2021 7.62% 11.83%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.75 06/30/2021 7.37% 18.81%

List of all pending deals:

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

Disclaimer: I have long positions in Otelco (OTEL) and Zagg (ZAGG). 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.