Merger activity remained steady last week with three new deals announced and four deals completed.
Incorporated in 1989 and headquartered in San Francisco, CAI International is a global transportation company that offers intermodal container leasing and sales. On June 17, 2021, CAI entered into an agreement to be acquired by Mitsubishi HC Capital, a Japanese shipping conglomerate for $56 per share, representing a 46.8% premium over CAI’s closing stock price on Friday. In September of last year, Mitsubishi acquired its smaller rival Hitachi Capital to compete with global competitors and changed its name to Mitsubishi HC Capital Inc.
Mitsubishi’s merger agreement with CAI comes at a time of high shipping rates and a shortage in the supply of shipping containers on account of resurgent demand after pandemic related disruptions. Other factors that influenced this are the traffic jam in the Suez Canal and the recent partial closure of China’s Yantian port. In joining forces with MHC, CAI International aims to become a larger player in the market.
Two deals announced amendments to their merger agreements. Ossen Innovation (OSN) amended its going-private deal by extending the termination date by three months. At Home Group (HOME) also entered into an amendment with Hellman & Friedman (H&F) after announcing the expiration of the 40-day “go-shop” period and the HSR Act last week. The improved offer of $37 is an increase from the prior $36 per share offer, representing a premium of approximately 21% to the company’s closing stock price of $30.67 on May 4, 2021. This revised price did little to appease the company’s largest shareholder CAS Investment Partners, LCC, which owns a 17% stake in HOME. CAS Investment Partners asks shareholders to reject the current deal by not tendering their shares because they they think the company is worth $70 per share. It will be interesting to see if H&F comes back to the table with a higher offer following the letter CAS sent to shareholders.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.