Merger Arbitrage Mondays – Exxon and Chevron Contemplate The Largest Corporate Merger Ever

Merger activity increased last week with two new deals announced and five deals completed. The two deals that were announced last week were potential deals in the works.

On December 15, 2020,  Cardtronics (CATM) had entered into a definitive agreement with funds managed by affiliates of Apollo Global Management (APO) and Hudson Executive Capital to be acquired for $39 per share in cash. In the second week of January, there was significant change in the weekly spread for Cardtronics after it received an unsolicited proposal from NCR Corporation. On January 25, 2021, the company terminated its previous agreement and entered into a deal with NCR Corporation (NCR) to be acquired for $39.00 per share in cash.

On January 31, 2021, according to The Wall Street Journal, the chief executives of Exxon Mobil (XOM) and Chevron (CVX) spoke about combining the oil giants after the pandemic shook the world last year, testing the waters for what could be one of the largest corporate mergers ever.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section last week.

SPAC Arbitrage

There were 23 new IPOs filed last week and 9 new SPAC business combinations announced.

  1. Alight Solutions and Foley Trasimene Acquisition (WPF) entered into a definitive business combination agreement that will result in Alight becoming a publicly traded company with an enterprise value of approximately $7.3 billion.
  2. Latch and TS Innovation Acquisitions (TSIAU) entered into a definitive merger agreement that will result in Latch becoming a publicly listed company with an equity value of $1.56 billion post-money.
  3. Taboola and ION Acquisition Corp. 1 (IACA) entered into a definitive merger agreement that will result in Taboola becoming a publicly listed company
  4. HMAN Group Holdings and Landcadia Holdings III (LCY) entered into a definitive merger agreement that will result in Hillman becoming a publicly listed company.
  5. Sunlight Financial and Spartan Acquisition Corp. II (SPRQentered into a definitive agreement for a business combination that will result in Sunlight becoming a publicly listed company.
  6. Stryve Foods and Andina Acquisition Corp. III (ANDA) announced a definitive agreement for a business combination that would result in Stryve becoming a public company.
  7. Faraday Future and Property Solutions Acquisition (PSAC) entered into a definitive agreement that will result in Faraday Future becoming a publicly traded company.
  8. Nerdy and TPG Pace Tech Opportunities (PACE) entered into an agreement to become a public company  that will result in Nerdy becoming a publicly traded company.
  9. FREYR AS announced that it will become a publicly listed company through a business combination with Alussa Energy Acquisition (ALUS). The transaction represents a pro forma equity value of $1.4 billion for the combined company.

Weekly Spread Changes:

The table below shows weekly spread changes between January 22, 2021, and January 29, 2021.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
GNW 2.84 China Oceanwide Holdings Group Co., Ltd. (N/A) 91.20% 74.60% 16.60% All Cash
APHA 12.18 Tilray, Inc. (TLRY) 18.1 24.55% 16.89% 7.66% All Stock
DOYU 13.13 HUYA Inc. (HUYA) 25.89 43.94% 36.94% 7.00% All Stock
CXDC 1.09 Faith Dawn Limited and Faith Horizon (N/A) 10.09% 5.26% 4.83% All Cash
FBSS 18.55 Virginia National Bankshares Corporation (VABK) 29.1 5.89% 1.25% 4.64% All Stock
CPAH 3.41 Alianza, Inc. (N/A) 2.35% 3.25% -0.90% All Cash
QEP 2.85 Diamondback Energy, Inc. (FANG) 56.69 -0.54% 1.82% -2.36% All Stock
HPR 10.88 Bonanza Creek Energy, Inc. (BCEI) 20.66 -78.35% -74.74% -3.61% All Stock
NEOS 0.78 Aytu BioScience, Inc. (AYTU) 7.14 -0.41% 3.55% -3.96% All Stock
CBMG 19.6 CBMG management (N/A) 0.77% 8.28% -7.51% All Cash

Deal Statistics:

Total Number of Deals Closed in 2021 15
Total Number of Deals Not Completed in 2021 1
Total Number of Pending Deals
Cash Deals 47
Stock Deals 17
Stock & Cash Deals 10
Special Conditions 3
Total Number of Pending Deals 77
Aggregate Deal Consideration $434.91 billion

New Deals:

  1. The acquisition of Cardtronics (CATM) by NCR Corporation (NCR) by a closing value of $2.5 billion or $39 per share in cash. We added CATM as a potential deal to the Deals in the Works section on January 11, 2021, and the price after the news of the potential deal came out was $40.59.
  2. The acquisition of Perspecta (PRSP) by Veritas Capital for $7.1 billion or $29.35 per share in cash. We added PRSP as a potential deal to the Deals in the Works section on January 9, 2021, and the price after the news of the potential deal came out was $25.97.

Deal Updates:

  1. On January 25, 2021, China Biologic Products Holdings (CBPO) announced that it has called an extraordinary general meeting of shareholders to be held on March 1, 2021.
  2. On January 26, 2021, TC PipeLines (TCP) announced that it has established a record date of January 15, 2021 and a meeting date of February 26, 2021, for a special meeting of its common unitholders.
  3. On January 28, 2021, Cellular Biomedicine Group (CBMG) received written notice from CFIUS that it had concluded its review of the Merger and there were no unresolved national security concerns associated with the Merger.
  4. On January 29, 2021, China Distance Education Holdings Limited (DL) announced that it has called an extraordinary general meeting of shareholders to be held on February 26, 2021.

Closed Deals:

  1. The acquisition of Eidos Therapeutics (EIDX) by BridgeBio Pharma (BBIO) on January 26, 2021. It took 113 days for this deal to be completed.
  2. The acquisition of American Renal Associates Holdings (ARA) by Innovative Renal Care on January 26, 2021. It took 116 days for this deal to be completed.
  3. The acquisition of Foundation Building Materials (FBM) by American Securities on January 29, 2021. It took 74 days for this deal to be completed.
  4. The acquisition of Acorn International (ATV) by First Ostia Port on January 29, 2021. It took 109 days for this deal to be completed.
  5. The acquisition of Dime Community Bancshares (DCOM) by Bridge Bancorp (BDGE) on January 29, 2021. It took 212 days for this deal to be completed.

Terminated Deals:

  1. January 25, 2021: Prior to entry into the agreement with NCR, Cardtronics (CATM) terminated its previously announced acquisition agreement with an entity affiliated with funds managed by affiliates of Apollo Global Management (APO) in accordance with the terms of the acquisition agreement.

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 $2.84 01/31/2021 91.20% 0.00%
DOYU 10/12/2020 HUYA Inc. (HUYA) $18.90 $13.13 06/30/2021 43.94% 106.93%
APHA 12/16/2020 Tilray, Inc. (TLRY) $15.17 $12.18 06/30/2021 24.55% 59.73%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $147.59 $130.57 12/31/2021 13.04% 14.25%
GSUM 10/01/2020 Gridsum Corporation (N/A) $2.00 $1.81 03/31/2021 10.50% 64.94%
CXDC 06/15/2020 Faith Dawn Limited and Faith Horizon (N/A) $1.20 $1.09 02/07/2021 10.09% 526.21%
IPHI 10/29/2020 Marvell Technology Group Ltd. (MRVL) $185.54 $168.61 12/31/2021 10.04% 10.97%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.64 06/30/2021 9.91% 24.12%
HCAP 12/23/2020 Portman Ridge Finance Corporation (PTMN) $8.53 $7.78 06/30/2021 9.59% 23.33%
ALXN 12/12/2020 AstraZeneca (AZN) $167.49 $153.33 09/30/2021 9.23% 13.93%

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

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