×

Subscribe Today

Get our free articles delivered directly to your email!

Continue reading

Merger Arbitrage Mondays – The Bidding War For Monmouth Real Estate Continues

  • August 23, 2021

Merger activity decreased significantly last week with just one new deal announced and one deal completed.

The third week of August saw a significant decline in both M&A and SPAC fronts with only one new deal announced and a single SPAC IPO filed.

On July 27, 2021, Bloomberg had reported that Nordic Capital was in advanced talks on a potential acquisition of Inovalon Holdings (INOV). The price of INOV after this announcement was $36.95, a 12.96% premium to INOV’s share price on the previous day. Founded in 1998 and headquartered in Bowie, Maryland, Inovalon provides cloud-based platforms to support data driven healthcare. On August 19, 2021, the company entered into a definitive agreement to be acquired by an equity consortium led by European buyout group Nordic Capital, which has been increasing its investments in the U.S. healthcare sector and U.S. based Insight Partners, which is also known for investing in private technology companies. Shareholders of Inovalon will receive $41 per share, representing a 25.3% premium over the closing price of Inovalon on July 26, 2021, the day before Bloomberg reported the potential acquisition.

The bidding war for Monmouth Real Estate Investment Corporation (MNR) continued last week after Equity Commonwealth (EQC) revised its offer to pay $19.00 per share in a combination of cash and stock. This was countered by Starwood Real Estate Income Trust submitting an enhanced all-cash proposal to acquire MNR for $19.93 per Monmouth share.

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 was 1 SPAC IPO filed and 3 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Silver Crest Acquisition Corporation (SLCRentered into an Agreement and Plan of Merger with TH International Limited.
  2. Hagerty and Aldel Financial (ADFentered into a definitive business combination agreement.
  3. Aspiration Partners and InterPrivate III Financial Partners (IPVFannounced a definitive merger agreement that will result in Aspiration becoming a publicly listed company.

Weekly Spread Changes:

The table below shows weekly spread changes between August 13 and August 20, 2021.

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
TEDU1.33Kidedu Holdings Limited (N/A)0.00200.75%187.77%12.98%All Cash
XONE22.81Desktop Metal, Inc. (DM)7.5811.79%5.20%6.59%Special Conditions
MX18.54South Dearborn Limited (N/A)56.42%52.23%4.19%All Cash
MNR19.07Equity Commonwealth (EQC)26.18-1.17%-4.93%3.76%Cash Plus Stock
VNE36.1Magna International Inc. (MGA)77.66-13.43%-16.87%3.44%All Cash
FVCB20.16Blue Ridge Bankshares, Inc. (BRBS)17.81.47%5.15%-3.68%All Stock
MXIM101.65Analog Devices, Inc. (ADI)166.643.28%7.44%-4.16%All Stock
JOBS72.95Garnet Faith Limited (N/A)0.008.36%13.20%-4.84%All Cash
XLNX144.27Advanced Micro Devices, Inc. (AMD)104.6525.01%29.93%-4.92%All Stock
COHR249.47II-VI Incorporated (IIVI)60.4210.23%15.97%-5.74%Cash Plus Stock

Deal Statistics:

Total Number of Deals Closed in 2021117
Total Number of Deals Not Completed in 20218
Total Number of Pending Deals
Cash Deals51
Stock Deals36
Stock & Cash Deals11
Special Conditions3
Total Number of Pending Deals101
Aggregate Deal Consideration$845.68 billion

New Deals:

  1. The acquisition of Inovalon Holdings (INOV) by an equity consortium led by Nordic Capital, and joined by Insight Partners for $7.3 billion or $41.00 per share in cash. We added INOV as a potential deal to the Deals in the Works section on July 27, 2021, and the price after the news of the potential deal came out was $36.95.

Deal Updates:

  1. On August 11, 2021, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired in connection with the previously announced proposed merger between Raven Industries (RAVN) and CNH Industrial N.V. (CNHI). The closing of the Merger remains subject to certain other closing conditions, including, but not limited to, an affirmative vote of a majority of the votes cast by the holders of outstanding shares of the Company’s common stock at the Company’s shareholder meeting to be held on September 15, 2021.
  2. On August 13, 2021, EXFO (EXFO) announced that a significant majority of shareholders voted in favor of the special resolution approving the previously announced plan of arrangement pursuant to which 11172239 Canada, a corporation controlled by Germain Lamonde, EXFO’s founder and majority shareholder, will acquire all the issued and outstanding subordinate voting shares of EXFO.
  3. On August 16, 2021, Equity Commonwealth (EQC) and Monmouth Real Estate Investment Corporation (MNR) announced that they have entered into an amendment to the definitive merger agreement between the two companies. Under the terms of the Merger Agreement, Equity Commonwealth revised its offer to pay a total value of $19.00 per share in a combination of cash and stock.  The revised offer increases the exchange ratio from 0.67x to 0.713x, representing a 6.4% premium over the previous all-stock offer. Monmouth shareholders will have the option to elect to receive, for each Monmouth common share, either (i) $19.00 of cash or (ii) 0.713 shares of EQC stock.
  4. On August 16, 2021, shareholders of U.S. Concrete (USCRapproved the company’s merger with Vulcan Materials Company (VMC) at a special meeting of shareholders.
  5. On August 17, 2021, Webster Financial Corporation (WBS) and Sterling Bancorp (STL) announced that each company’s stockholders have approved the proposed merger between Webster and Sterling at their respective special meetings of stockholders.
  6. On August 18, 2021, Stamps.com (STMPannounced the expiration of the 40-day “go-shop” period under the terms of the previously announced merger agreement.
  7. On August 18, 2021, Starwood Real Estate Income Trust submitted an enhanced all-cash proposal to acquire Monmouth Real Estate Investment Corporation (MNR) for $19.93 per Monmouth share reduced by the termination fee owed to Equity Commonwealth of $72 million or $0.73 per share.
  8. On August 18, 2021, ORBCOMM (ORBC) announced that the Federal Communications Commission (FCC) has approved the transfer of control of ORBCOMM’s FCC authorizations in connection with the previously announced acquisition of ORBCOMM by GI Partners.
  9. On August 19, 2021, Kansas City Southern (KSU) announced that it has convened and adjourned the Special Meeting of Stockholders for KCS stockholders to vote on the previously announced definitive merger agreement with CN (CNI) and other proposals until September 3, 2021.
  10. On August 20, 2021, EXFO Inc. (EXFO) announced that the Superior Court of Québec has issued a final order approving the previously announced plan of arrangement with 11172239 Canada.

Closed Deals:

  1. The acquisition of Bowl America Incorporated (BWL-A) by Bowlero on August 16, 2021. It took 80 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
TEDU04/30/2021Kidedu Holdings Limited (N/A)$4.00$1.3309/30/2021200.75%1878.83%
MX03/26/2021South Dearborn Limited (N/A)$29.00$18.5412/31/202156.42%157.20%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$180.35$144.2712/31/202125.01%69.69%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$42.4712/31/202120.08%55.96%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.512/31/202119.77%55.08%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$28.7506/30/202212.70%14.85%
XONE08/11/2021Desktop Metal, Inc. (DM)$25.50$22.8112/31/202111.79%32.86%
SOLY05/10/2021Allergan Aesthetics (N/A)$22.60$20.4209/30/202110.68%99.91%
COHR03/25/2021II-VI Incorporated (IIVI)$274.98$249.4712/31/202110.23%28.49%
KSU05/21/2021Canadian National Railway Company (CNI)$319.62$290.2612/31/202210.11%7.44%

List of all pending deals:

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

TargetAnnounced
Date
AcquirerDeal
Type
Closing
Value
Deal
Price
Last
Price
Target VolumeEstimated
Closing Date
ReturnAnnualized
Return
+TEDU4/30/21Kidedu Holdings Limited (N/A)All Cash$230.6 M$4.00$1.33232,0969/30/21200.75%1928.27%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$18.54395,82412/31/2156.42%158.41%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$180.35$144.271,717,72512/31/2125.01%70.22%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$42.47355,78712/31/2120.08%56.39%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$21.5607,49512/31/2119.77%55.50%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$28.7590,4706/30/2212.70%14.90%
+XONE8/11/21Desktop Metal, Inc. (DM)Special Conditions$418.26 M$25.50$22.81680,41512/31/2111.79%33.11%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$20.42182,9019/30/2110.68%102.54%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$274.98$249.4789,88912/31/2110.23%28.71%
+KSU5/21/21Canadian National Railway Company (CNI)Cash Plus Stock$33.6 B$319.62$290.26482,23912/31/2210.11%7.46%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$20.19409,7673/31/228.96%14.87%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$72.95429,38712/31/218.36%23.48%
+OSN12/17/20New Ossen Group Limited (N/A)All Cash$84.96 M$5.10$4.7175,8939/30/218.28%79.53%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$11.25218,60412/31/216.67%18.72%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$20.59$19.3598,2471/31/226.42%14.55%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.1161,1883/31/226.29%10.43%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$192.5344,0841/31/225.45%12.37%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$124.17$118.11,473,56712/31/215.14%14.43%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$26.68198,12912/31/214.95%13.89%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$49.86284,6513/31/224.29%7.12%
+FIVN7/18/21Zoom Video Communications, Inc. (ZM)All Stock$14.7 B$186.38$179.261,350,8506/30/223.97%4.66%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$22.43$21.6537,2521/31/223.60%8.16%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.21,131,6531/31/223.45%7.82%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$21.14$20.46748,33212/31/213.34%9.39%
+MXIM7/13/20Analog Devices, Inc. (ADI)All Stock$21 B$104.98$101.652,832,0146/30/213.28%0.00%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$64.65$62.67400,5981/31/223.17%7.18%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.05784,23012/31/213.15%8.84%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$23.97$23.28309,86012/31/212.98%8.37%
+SCR8/05/21Penn National Gaming, Inc. (PENN)Cash Plus Stock$2 B$33.22$32.27394,9313/31/222.95%4.90%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$12.87$12.53,36012/31/212.92%8.21%
+USCR6/07/21Vulcan Materials Company (VMC)All Cash$2.32 B$74.00$71.96261,00912/31/212.83%7.96%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$36.24$35.274,61412/31/212.75%7.72%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$29.33$28.5572,7843/31/222.73%4.53%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$48.98474,49112/31/212.69%7.57%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.52700,9643/31/222.65%4.40%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.41120,06512/31/212.52%7.08%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$11.38$11.1111,52412/31/212.51%7.04%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$17.09$16.6846,85912/31/212.44%6.85%
+VEI8/10/21Chesapeake Energy Corporation (CHK)Cash Plus Stock$2.2 B$14.29$13.97210,47912/31/212.32%6.51%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$7.75$7.58800,2356/30/212.28%0.00%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$14.03$13.741,667,2666/30/222.15%2.52%
+SOGO9/29/20Tencent Parties (N/A)All Cash$2.19 B$8.95$8.72150,8127/31/212.06%0.00%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$49.43$48.43191,94212/31/212.06%5.77%
+INOV8/19/21Nordic Capital (N/A)All Cash$7.3 B$41.00$40.183,762,0671/31/222.04%4.63%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$21.33$20.91178,91712/31/212.03%5.70%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.65332,50412/31/211.98%5.57%
+SIC8/09/21Sun Capital Partners, Inc. (N/A)All Cash$411 M$14.50$14.22269,71110/31/211.97%10.42%
+ACBI7/23/21South State Corporation (SSB)All Stock$542 M$24.74$24.27111,6863/31/221.95%3.23%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$18.69$18.35357,0791/31/221.87%4.24%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$40.02$39.3940,3136/30/221.84%2.16%
+ALTA5/18/21Glacier Bancorp, Inc. (GBCI)All Stock$933.5 M$42.64$41.8960,54112/31/211.80%5.06%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.042,669,84012/31/211.74%4.90%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$22.55$22.18898,49012/31/211.66%4.66%
+BOCH6/24/21Columbia Banking System, Inc. (COLB)All Stock$266 M$14.61$14.3762,37312/31/211.66%4.65%
+CSOD8/05/21Clearlake Capital Group, L.P. (N/A)All Cash$5.2 B$57.50$56.651,381,89412/31/211.50%4.21%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$20.46$20.1624,5211/31/221.47%3.33%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$54.74435,68412/31/211.39%3.90%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$16.01$15.821,614,19812/31/211.22%3.42%
+GPX7/15/21Learning Technologies Group (N/A)All Cash$394 M$20.85$20.698,44412/31/211.21%3.41%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$50.70$50.14707,73512/31/211.11%3.12%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$27.35$27.0663712/31/211.08%3.03%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.041,125,64712/31/211.05%2.94%
+IEC8/12/21Creation Technologies Inc. (N/A)All Cash$242.3 M$15.35$15.280,68310/31/210.99%5.22%
+JAX7/02/21SPB Hospitality LLC (N/A)All Cash$220 M$14.00$13.8723,59711/15/210.94%4.07%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$8.87$8.7920,3959/30/210.91%8.74%
+SHSP6/22/21Clearlake Capital Group, L.P. (N/A)All Cash$240 M$17.10$16.9565,0899/30/210.88%8.50%
+GRA4/26/21Standard Industries Holdings Inc. (N/A)All Cash$7 B$70.00$69.42301,38312/31/210.84%2.35%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.723,305,56812/31/210.83%2.33%
+STMP7/09/21Thoma Bravo (N/A)All Cash$6.6 B$330.00$327.37253,6519/30/210.80%7.72%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$114.424,76612/31/210.75%2.11%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.32$12.235039/30/210.75%7.22%
+TRMT4/26/21RMR Mortgage Trust (RMRM)All Stock$252.33 M$5.75$5.7116,9609/30/210.72%6.92%
+NWHM7/23/21Apollo Global Management (N/A)All Cash$338 M$9.00$8.94113,84212/31/210.67%1.88%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$18.98$18.86877,5313/31/220.66%1.09%
+LDL6/21/21Unifrax (N/A)All Cash$1.3 B$62.10$61.7187,68712/31/210.63%1.77%
+ORBC4/08/21GI Partners (N/A)All Cash$1.1 B$11.50$11.43431,7809/30/210.61%5.88%
+TBIO8/03/21Sanofi (SNY)All Cash$1.94 B$38.00$37.772,425,4289/30/210.61%5.85%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$38.40$38.1989,7909/30/210.55%5.29%
+PFPT4/26/21Thoma Bravo (N/A)All Cash$12.3 B$176.00$175.05514,9439/30/210.54%5.21%
+SNR6/28/21Ventas, Inc. (VTR)All Stock$2.3 B$8.52$8.481,242,87512/31/210.49%1.37%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.55225,49512/31/210.48%1.34%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$87.148,73612/31/210.46%1.29%
+CLDR6/01/21Clayton, Dubilier & Rice and KKR (N/A)All Cash$5.3 B$16.00$15.942,387,31912/31/210.38%1.06%
+CORE5/18/21Performance Food Group Company (PFGC)Cash Plus Stock$2.5 B$42.85$42.7599,3436/30/220.36%0.42%
+EXFO6/07/2111172239 Canada Inc (N/A)All Cash$383.69 M$6.25$6.238,3679/30/210.32%3.08%
+QTS6/07/21Blackstone (BX)All Cash$10 B$78.00$77.791,123,57912/31/210.27%0.76%
+SYKE6/18/21Sitel Group (N/A)All Cash$2.2 B$54.00$53.86425,58512/31/210.26%0.73%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.86214,56612/31/210.25%0.70%
+MFNC4/13/21Nicolet Bankshares, Inc. (NCBS)Cash Plus Stock$248 M$21.25$21.22,2239/30/210.24%2.27%
+KIN6/16/21Elanco Animal Health Incorporated (ELAN)All Cash$440 M$9.25$9.23185,8599/30/210.22%2.08%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$52.54$52.43435,7026/30/210.21%0.00%
+PFBI3/29/21Peoples Bancorp Inc. (PEBO)All Stock$292.3 M$18.15$18.1228,9419/30/210.19%1.80%
+CBB3/13/20Macquarie Infrastructure Partners (N/A)All Cash$2.9 B$15.50$15.48741,4869/30/210.13%1.24%
+XEC5/24/21Cabot Oil & Gas Corporation (COG)All Stock$8.59 B$57.89$57.83477,20312/31/210.10%0.29%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$40.23$40.2881,37512/31/21-0.12%-0.35%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$58.13128,94412/31/21-0.22%-0.63%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$191.3550,4936/30/22-0.71%-0.83%
+MNR5/04/21Equity Commonwealth (EQC)Cash Plus Stock$3.4 B$18.85$19.07673,21312/31/21-1.17%-3.29%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$11.82$12.391,003,05612/31/21-4.61%-12.96%
+SBBP5/24/21Xeris Pharmaceuticals, Inc. (XERS)All Stock$267 M$1.72$1.91157,08411/15/21-9.70%-42.13%
+VNE7/22/21Magna International Inc. (MGA)All Cash$3.3 B$31.25$36.1928,20712/31/21-13.43%-37.72%

Conclusion:

Even though there was a decline in both M&A and SPAC activity last week, multiple active deals including SPAC business combinations received required approvals for the successful completion of their respective deals.

Disclaimer: I have long positions in Nuance Communications (NUAN) and Change Healthcare (CHNG). I also have put options in Change Healthcare. 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.