Merger Arbitrage Mondays – FBL Financial Group Receives A Nice Boost To Its Previous Offer

Merger activity decreased last week with three new deals announced and two deals completed. Unlike the previous month, there were no banking-related mergers announced last week but we did see yet another deal receive a higher offer.

Holmdel-based Monmouth Real Estate Investment Corporation (MNR) is one of the oldest public equity REITs in the world. Founded in 1968, the company owns 120 properties totaling 24.5 million square feet in its portfolio and is under contract to purchase six properties totaling 1.8 million square feet.

We added MNR as a potential deal in the works on December 21, 2020, when Blackwells Capital, one of the largest owners of Monmouth Real Estate Investment Corporation offered to acquire Monmouth for $18 per share. The following month, on January 14, 2021,  the company announced that its Board of Directors had determined that Blackwell’s offer was not in the best interest of the Company and that it was exploring strategic alternatives to maximize stockholder value, including a potential sale or merger of the company. As a result of this consideration, the Board suspended the Company’s Dividend Reinvestment and Stock Purchase Plan and stated that stockholders would receive dividends in cash effective with the dividend that was scheduled to be paid on March 15, 2021. Stockholders that remained enrolled at reinstatement would automatically resume participation in the Plan.

On May 4, 2021, Equity Commonwealth (EQC), a Chicago-based office REIT, and Monmouth entered into a definitive merger agreement by which Equity Commonwealth will acquire Monmouth in an all-stock transaction, valued at approximately $3.4 billion, including the assumption of debt. The merger agreement also includes one remaining dividend of 18 cents per share.

At announcement, the deal with EQC was worth $19.44 per share but following a big drop in EQC’s stock price after the deal announcement, the deal is currently only worth $18.72 per share, not significantly above Blackwells’ offer. What is even more interesting is that with MNR trading at $19.49, the deal has a negative spread of 3.96% indicating arbitrageurs are expecting another bidding war.

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 3 new SPAC IPOs and 4 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Roivant Sciences and Montes Archimedes Acquisition Corp. (MAACentered into a definitive business combination agreement.
  2. asper Therapeutics and Amplitude Healthcare Acquisition Corporation (AMHCU)  entered into a definitive business combination agreement.
  3. Science 37, Inc. and LifeSci Acquisition II Corp. (LSAQentered into a definitive business combination agreement.
  4. Lightning eMotors, and GigCapital3, Inc. announced that they are completing their previously announced business combination.

Weekly Spread Changes:

The table below shows weekly spread changes between April 30, 2021, and May 7, 2021.

Symbol Quote Acquiring
Company Quote
Last Week
Spread Change
DSSI 10.76 International Seaways, Inc. (INSW) 20.45 5.24% -0.61% 5.85% All Stock
GRUB 65.41 Just Eat N.V. (TKAYY) 10.465 7.35% 2.76% 4.59% All Stock
HCAP 8.79 Portman Ridge Finance Corporation (PTMN) 2.4 15.58% 11.48% 4.10% Cash Plus Stock
LEAF 8.5 Graham Holdings Company (GHC) 658.58 0.00% -4.06% 4.06% All Cash
MX 24.21 South Dearborn Limited (N/A) 19.79% 15.95% 3.84% All Cash
DOYU 8.57 HUYA Inc. (HUYA) 16.37 39.44% 41.19% -1.75% All Stock
LINX 7.2 StoneCo Ltd. (STNE) 62.49 -13.19% -11.10% -2.09% Special Conditions
BPFH 15.39 SVB Financial Group (SIVB) 587.98 0.75% 2.84% -2.09% Cash Plus Stock
TRMT 5.97 RMR Mortgage Trust (RMRM) 12.06 5.05% 7.24% -2.19% All Stock
SJR 29.57 Rogers Communications Inc. (RCI) 50.76 9.57% 11.99% -2.42% Special Conditions

Deal Statistics:

Total Number of Deals Closed in 2021 68
Total Number of Deals Not Completed in 2021 3
Total Number of Pending Deals
Cash Deals 45
Stock Deals 25
Stock & Cash Deals 16
Special Conditions 3
Total Number of Pending Deals 89
Aggregate Deal Consideration $710.29 billion

New Deals:

  1. The acquisition of Monmouth Real Estate Investment Corporation (MNR) by Equity Commonwealth (EQC) for $3.4 billion in an all stock deal. Under the terms of the agreement, Monmouth shareholders will receive 0.67 shares of Equity Commonwealth stock for every share of Monmouth stock they own. The merger agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of $0.18 per share without Equity Commonwealth paying a corresponding common dividend to its shareholders. We added MNR as a potential deal to the Deals in the Works section on December 21, 2020, and the price after the news of the potential deal came out was $17.71.
  2. The acquisition of Chiasma (CHMA) by Amryt Pharma (AMYT) for $53.61 million in an all stock deal. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the consummation of the transaction will be exchanged for 0.396 Amryt American Depositary Shares.
  3. The acquisition of At Home Group (HOME) by Hellman & Friedman for $2.8 billion or $36 per share in cash.

Deal Updates:

  1. On May 3, 2021, Farm Bureau Property & Casualty Insurance Company and FBL Financial Group (FFGamended their previously-announced definitive merger agreement by increasing the offer price to $61 per share in cash. The previous offer was $56 in cash.
  2. On May 4, 2021, Boston Private Financial Holdings (BPFH) announced that its shareholders have approved the company’s merger agreement with SVB Financial Group (SIVB), pursuant to which Boston Private will merge with and into SVB Financial.
  3. On May 6, 2021, The U.S. Surface Transportation Board (STB) approved the voting trust for Canadian Pacific Railway’s (CP) proposed acquisition of Kansas City Southern (KSU) railroad.
  4. On May 6, 2021,  The Public Utility Commission of Texas (PUCT) voted to approve the unanimous stipulation and agreement among parties for the merger of PNM Resources (PNM), including its Texas utility subsidiary, Texas-New Mexico Power Company (TNMP), with AVANGRID (AGR).
  5. On May 6, 2021, Dollar Mutual Bancorp and Standard AVB Financial (STND) jointly announced that the parties have received all the regulatory approvals necessary to complete the merger of Standard into Dollar. The parties expect that their proposed merger transaction will be completed after market hours on May 28, 2021.
  6. On May 6, 2021, The American Antitrust Institute (AAI) warned that UnitedHealth Group’s (UNH) planned acquisition of Change Healthcare (CHNG) could stifle competition. The nonprofit wrote in a letter to the Department of Justice (DOJ) that the deal is “likely to harm competition and consumers.”
  7. On May 7, 2021, shareholders of Cardtronics (CATMapproved the company’s merger with NCR Corporation (NCR) at a special meeting of shareholders.

Closed Deals:

  1. The acquisition of GW Pharmaceuticals (GWPH) by Jazz Pharmaceuticals (JAZZ) on May 5, 2021. It took 90 days for this deal to be completed.
  2. The acquisition of Perspecta (PRSP) by Veritas Capital on May 6, 2021. It took 99 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
DOYU 10/12/2020 HUYA Inc. (HUYA) $11.95 $8.57 06/30/2021 39.44% 276.85%
MX 03/26/2021 South Dearborn Limited (N/A) $29.00 $24.21 12/31/2021 19.79% 30.60%
CHMA 05/05/2021 Amryt Pharma (AMYT) $4.74 $4.0300 09/30/2021 17.62% 44.66%
HCAP 12/23/2020 Portman Ridge Finance Corporation (PTMN) $10.16 $8.79 06/30/2021 15.58% 109.34%
CXDC 06/15/2020 Faith Dawn Limited and Faith Horizon (N/A) $1.20 $1.06 05/10/2021 13.21% 4820.75%
CHNG 01/06/2021 UnitedHealth Group Incorporated (UNH) $25.75 $22.89 12/31/2021 12.49% 19.32%
SJR 03/15/2021 Rogers Communications Inc. (RCI) $32.40 $29.57 06/30/2022 9.57% 8.38%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $135.82 $124.43 12/31/2021 9.15% 14.16%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.68 06/30/2021 8.97% 62.99%
AJRD 12/20/2020 Lockheed Martin Corporation (LMT) $51.00 $47 12/31/2021 8.51% 13.16%

List of all pending deals:

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


With just three new deals announced last week, merger activity has declined at the start of the month of May. There was no significant change in SPAC activity as it continues to be steady like the previous month. A number of active deals received shareholder and other regulatory approvals last week.

Disclaimer: I have long positions in Nuance Communications (NUAN), Change Healthcare (CHNG) and Brookfield Property Partners (BPY). 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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