Merger Arbitrage Mondays – Welbilt Accepts Ali Group’s Higher Bid

Merger activity increased last week with eight new deals announced, four deals completed and one deal terminated. M&A and SPAC activity picked up once again last week. In a continuation of the trend we have seen all year, half of the deals announced last week were regional bank mergers. The largest deal announced last week was the acquisition of Covanta Holding Corporation (CVA) by EQT Infrastructure for $5.35 billion.

Founded in 1986 and headquartered in Morristown, New Jersey, Covanta provides energy from waste and industrial waste management services. Covanta’s facilities burn waste from municipalities and businesses and convert it into renewable electricity to power homes. The company generates 74% of its revenue from its waste to energy services. Last week, Covanta entered into a definitive agreement to be acquired by EQT Infrastructure for $20.25 per share, representing approximately 37% premium to Covanta’s unaffected share price of $14.78 on June 8th, the day prior to initial media speculation of a transaction.

Another highlight from last week was Welbilt (WBT) terminating its previous deal with The Middleby Corporation and agreeing to be acquired by Ali Group after accepting its second higher offer. Ali Group paid Middleby a $110 million termination fee on Welbilt’s behalf.

We wrote the following about Welbilt in our Merger Arbitrage Mondays post on May 31st,

The saga of bidding wars continued last week with Italy’s Ali Group bidding $3.3 billion for Welbilt (WBT) on Friday, representing a premium of 15.5% to Welbilt’s closing price on Thursday. 

Founded in 1864 and headquartered in New Port Richey, Florida, Welbilt has built 12 brands in the foodservice industry in a span of over 85 years. The company provides ghost kitchen solutions.  On April 21, 2021, Welbilt had entered into an all stock definitive agreement to be acquired by The Middleby Corporation (MIDD). Carl Icahn, Welbilt’s largest shareholder with an 8.4% stake, had agreed to that deal. Ali Group’s bid trumps Middleby’s offer. Welbilt will have to pay a break-up fee of $110 million to Middleby if it decides to abandon it at the altar and tie the knot with Ali Group.

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

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

SPAC Arbitrage

There were 7 SPAC IPOs filed and 6 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Ivanhoe Capital Acquisition (IVANentered into a definitive agreement for a business combination with SES Holdings.
  2. Altus Power and CBRE Acquisition Holdings (CBAHannounced a definitive agreement for a business combination that would result in Altus Power becoming a public company.
  3.  HeartFlow Holding and Longview Acquisition Corp. II (LGVentered into a definitive business combination agreement.
  4. Aurora entered into a definitive business combination agreement with Reinvent Technology Partners Y (RTPY).
  5. ServiceMax entered into a business combination agreement with Pathfinder Acquisition Corporation (PFDR).
  6. Fathom Digital Manufacturing Corporation and Altimar Acquisition Corp. II (ATMRentered into a definitive business combination agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between July 9, and July 16, 2021

Symbol Quote Acquiring
Company Quote
Last Week
Spread Change
MX 22.73 South Dearborn Limited (N/A) 27.58% 22.16% 5.42% All Cash
RIVE 12.54 Mid Penn Bancorp, Inc. (MPB) 27.4 5.60% 2.73% 2.87% All Stock
XEC 66.08 Cabot Oil & Gas Corporation (COG) 16.16 -1.82% -4.64% 2.82% All Stock
KSU 266.33 Canadian National Railway Company (CNI) 104.38 19.34% 17.23% 2.11% Cash Plus Stock
ATC 24.16 MKS Instruments, Inc. (MKSI) 157.59 3.06% 1.37% 1.69% Cash Plus Stock
CIT 47.15 First Citizens BancShares, Inc. (FCNCA) 771.28 1.42% 2.61% -1.19% All Stock
MNR 19.23 Equity Commonwealth (EQC) 27.11 -4.61% -3.12% -1.49% Cash Plus Stock
WORK 44.7, inc. (CRM) 238.43 1.32% 3.01% -1.69% Cash Plus Stock
ICBK 34.6 Nicolet Bankshares, Inc. (NCBS) 71.22 -1.20% 0.53% -1.73% All Stock
SOGO 8.91 Tencent Parties (N/A) -0.11% 2.30% -2.41% All Cash

Deal Statistics:

Total Number of Deals Closed in 2021 101
Total Number of Deals Not Completed in 2021 7
Total Number of Pending Deals
Cash Deals 46
Stock Deals 35
Stock & Cash Deals 12
Special Conditions 2
Total Number of Pending Deals 95
Aggregate Deal Consideration $794.33 billion

New Deals:

  1. The acquisition of State Auto Financial Corporation (STFC) by Liberty Mutual Holding Company for $2.48 billion or $52 per share in cash.
  2. The acquisition of 1st Constitution Bancorp  (FCCY) by Lakeland Bancorp, Inc. (LBAI) for $244.4 million in an all stock deal. Under the terms of the merger agreement, shareholders of 1st Constitution Bancorp will receive 1.3577 Lakeland shares for each 1st Constitution share.
  3. The acquisition of Howard Bancorp (HBMD) by F.N.B. Corporation (FNB) for $418 million in an all stock deal. Under the terms of the agreement, shareholders of Howard Bancorp will be entitled to receive 1.8 shares of FNB common stock for each share of Howard common stock they own.
  4. The acquisition of Covanta Holding Corporation (CVA) by EQT Infrastructure for $5.35 billion or $20.25 per share in cash.
  5. The acquisition of Welbilt (WBT) by Ali Holding for $4.8 billion or $24.00 per share in cash.
  6. The acquisition of Reliant Bancorp (RBNC) by United Community Banks (UCBI) for $517 million in an all stock deal. Under the terms of the agreement, shareholders of Reliant Bancorp will receive 0.9842 shares of United common stock for each share of Reliant common stock outstanding.
  7. The acquisition of GP Strategies Corporation (GPX) by Learning Technologies Group for $394 million or $20.85 per share in cash.
  8. The merger of FVCBankcorp (FVCB) and Blue Ridge Bankshares (BRBS) for $113.36 million in an all stock deal. Under the terms of the agreement, FVCB shareholders will receive 1.1492 shares of Blue Ridge common stock for each share of FVCB common stock they own.

Deal Updates:

  1. On July 12, 2021, Aon (AONreceived conditional approval from the European Union (EU) antitrust regulators for its bid to acquire Willis Towers Watson (WLTW).
  2. July 13, 2021: According to Reuters, China’s antitrust regulator unconditionally approved on Tencent Holdings plan to take Sogou (SOGO) private.
  3. On July 13, 2021, Monmouth Real Estate Investment Corporation (MNR) announced that it received an unsolicited acquisition proposal from a large private investment firm primarily focused on global real estate that participated in the strategic alternatives review process undertaken by Monmouth’s Board of Directors earlier this year and made a proposal to acquire Monmouth as part of that process.
  4. On July 13, 2021, Diamond S Shipping (DSSI) announced that it has received shareholder approval to be acquired by International Seaways (INSW).
  5. On July 14, 2021, Herman Miller (MLHR) and Knoll (KNL) announced that, at their respective special meetings, their shareholders overwhelmingly approved their respective proposals required in order to consummate the pending acquisition of Knoll by Herman Miller.
  6. On July 14, 2021, The UK Competition and Markets Authority cleared AstraZeneca’s (AZN) proposed acquisition of Alexion Pharmaceuticals (ALXN). As a result, the acquisition is expected to close on 21 July 2021.
  7. On July 14, 2021, First Citizens BancShares (FCNCA) and CIT Group (CIT) jointly announced that the proposal to merge the two companies has received regulatory approval from the Federal Deposit Insurance Corporation.
  8. On July 16, 2021, Monmouth Real Estate Investment Corporation (MNR) announced that it received an amendment to the unsolicited acquisition proposal it previously received on July 8, 2021. The amendment to the proposal reflects an increase of $0.18 per share in the consideration that would be paid for each share of Monmouth Common Stock, resulting in a net cash consideration of $18.88 per share, reflecting a stated purchase price of $19.51 per share reduced by the termination fee of approximately $62.2 million, or $0.63 per share, if Monmouth terminates the merger agreement it previously entered into with Equity Commonwealth (EQC).
  9. On July 16, 2021, shareholders of Mackinac Financial Corporation (MFNCapproved the company’s merger with Nicolet Bankshares (NCBS) at a special meeting of shareholders.
  10. On July 16, 2021, Brookfield Property Partners (BPY) announced that it has received unitholder approval for Brookfield Asset Management’s (BAM) acquisition of all of the limited partnership units of BPY. It is expected that the closing of the transaction will occur prior to the end of July 2021.
  11. On July 16, 2021, Ossen Innovation (OSN) announced that it has entered into an Amendment to the Agreement and Plan of Merger with New Ossen Group Limited. Pursuant to Amendment No. 1, the parties have agreed to extend the Termination Date by three months to September 17, 2021.

Closed Deals:

  1. The acquisition of Newater Technology (NEWA) by Crouching Tiger Holding Limited on July 13, 2021. It took 284 days for this deal to be completed.
  2. The acquisition of Luminex Corporation (LMNX) by DiaSorin S.p.A. on July 14, 2021. It took 94 days for this deal to be completed.
  3. The acquisition of Constellation Pharmaceuticals (CNST) by MorphoSys AG (MOR) on July 15, 2021. It took 43 days for this deal to be completed.
  4. The acquisition of Diamond S Shipping (DSSI) by International Seaways (INSW) on July 16, 2021. It took 107 days for this deal to be completed.

Terminated Deals:

  1. On July 13, 2021, The Middleby Corporation (MIDD) announced that, under the terms of its previously announced Merger Agreement with Welbilt (WBT), it will not exercise its right to propose any modifications to the terms of the Merger Agreement and will allow the five-day match period to expire. Middleby expects that the Merger Agreement will terminate at the end of the match period today.

Top 10 deals with largest spreads:

Symbol Announced
Profit Annualized
TEDU 04/30/2021 Kidedu Holdings Limited (N/A) $4.00 $2.86 09/30/2021 39.86% 196.61%
MX 03/26/2021 South Dearborn Limited (N/A) $29.00 $22.73 12/31/2021 27.58% 60.65%
KSU 05/21/2021 Canadian National Railway Company (CNI) $317.85 $266.33 12/31/2022 19.34% 13.30%
CHNG 01/06/2021 UnitedHealth Group Incorporated (UNH) $25.75 $22.36 12/31/2021 15.16% 33.34%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $148.02 $128.63 12/31/2021 15.08% 33.15%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.48 06/30/2021 13.84% -280.63%
SJR 03/15/2021 Rogers Communications Inc. (RCI) $32.40 $28.78 06/30/2022 12.58% 13.23%
WLTW 03/09/2020 Aon plc (AON) $250.27 $222.36 07/31/2021 12.55% 352.39%
COHR 03/25/2021 II-VI Incorporated (IIVI) $283.28 $256.6 12/31/2021 10.40% 22.86%
AJRD 12/20/2020 Lockheed Martin Corporation (LMT) $51.00 $48.01 12/31/2021 6.23% 13.69%

List of all pending deals:

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


Multiple deals continued to receive required shareholder and regulatory approvals last week. The trend with respect to deals in the financial sector continues and so do the bidding wars. Welbilt (WBT) agreed to the higher offer it received from Ali Group and Monmouth Real Estate Investment Corporation (MNR) received an unsolicited acquisition proposal from a large private investment firm.

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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