Merger activity decreased last week with two new deals announced, six deals completed and one deal terminated.
Another potential deal in the works materialized last week. We added Hill-Rom Holdings (HRC) as a potential on August 29, 2021, when The Wall Street Journal reported that Baxter International (BAX) was in advanced talks to acquire HRC. The price of Hill-Rom Holdings after this announcement came out was $145.78, representing a 9.69% premium to HRC’s price of $132.90 on August 27, 2021 before rumors about a potential deal emerged.
Founded in 1915, Hill-Rom Holdings has been a leading medical device innovator for over 100 years. Hillrom has acquired Allen Medical, Liko, Mortara, Trumpf Medical, Voalte, Welch Allyn, Breathe Technologies and Excel Medical in the past years to improve and integrate its innovations. Four days after the announcement of the potential deal, HRC entered into a definitive agreement to be acquired by Baxter International (BAX) for $156 per share in cash, representing a 26% premium to Hillrom’s closing stock price on July 27, 2021.
The bidding war for Kansas City Southern continued last week, after the Surface Transportation Board (STB), a U.S. federal agency that is charged with the economic regulation of various modes of surface transportation including freight rail, rejected the use of a voting trust between Canadian National Railway (CNI) and Kansas City Southern (KSU).
Canadian National Railway had set up the voting trust structure to get KSU shareholders on board by having the voting trust temporarily own KSU and allowing KSU shareholders to get $200 in cash and 1.129 shares of CN common stock even if STB rejected the deal. Rival Canadian Pacific (CP) stepped in and reaffirmed its approximately $300 cash and stock offer for KSU, which the board of directors of KSU said could reasonably be a superior proposal.