Merger Arbitrage Mondays – Kansas City Southern Pays A Huge Fee To Walk Away

  • September 20, 2021

Merger activity increased last week with five new deals announced, two deals completed and one terminated.

Kansas City Southern (KSU) has now managed to leave both its suitors, Canadian National Railway (CNI) and Canadian Pacific Railway (CP), at the altar once each. Under regulatory pressure, KCS terminated its alliance with Canadian National Railway Company (CNI) and once again entered into a merger agreement to be acquired by Canadian Pacific Railway Limited (CP). In connection with the termination of the CN merger agreement, KCS has to pay CN a huge breakup fee of $1.4 billion. This termination fee includes $700 million for walking away from the CN deal and an additional $700 million to return the $700 million previously paid by CN to KCS to reimburse the termination fee paid to CP in May.

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

Potential deals continued to increase last week with three new deals announced in the Deals in the Works section last week.

SPAC Arbitrage

There were 7 SPAC IPOs filed and 3 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Forge Global announced it has entered into a definitive business combination agreement with Motive Capital Corp (MOTV).
  2. Pagaya Technologies and EJF Acquisition (EJFA) have entered into a definitive business combination agreement.
  3. Gogoro® Inc. and Poema Global Holdings Corp. (PPGHannounced a definitive agreement for a business combination that would result in Gogoro becoming a publicly listed company.
  4. Prenetics Group Limited and Artisan Acquisition (ARTAUentered into a definitive merger agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between September 10 and September 17, 2021.

Company Quote
Last Week
Spread Change
TEDU1.42Kidedu Holdings Limited (N/A)0.00181.69%166.67%15.02%All Cash
KDMN8.73Sanofi (SNY)48.388.82%4.51%4.31%All Cash
SBBP2.12Xeris Pharmaceuticals, Inc. (XERS)2.6-3.85%-7.79%3.94%All Stock
MSON24.82Bioventus Inc. (BVS)13.8812.81%9.25%3.56%Special Conditions
AJRD41.44Lockheed Martin Corporation (LMT)340.9823.07%20.34%2.73%All Cash
SAFM190.91Cargill and Continental Grain Company (N/A)6.33%8.47%-2.14%All Cash
SCR34.28Penn National Gaming, Inc. (PENN)74.591.77%4.00%-2.23%Cash Plus Stock
RIVE12.75Mid Penn Bancorp, Inc. (MPB)26.550.64%3.63%-2.99%All Stock
FIVN175.06Zoom Video Communications, Inc. (ZM)287.68-9.07%-3.86%-5.21%All Stock
MX17.98South Dearborn Limited (N/A)61.29%67.63%-6.34%All Cash

Deal Statistics:

Total Number of Deals Closed in 2021133
Total Number of Deals Not Completed in 202110
Total Number of Pending Deals
Cash Deals52
Stock Deals35
Stock & Cash Deals9
Special Conditions3
Total Number of Pending Deals99
Aggregate Deal Consideration$881.05 billion

New Deals:

  1. The acquisition of Itamar Medical (ITMR) by ZOLL Medical Corporation for $399.11 million or $31.00 per share in cash.
  2. The acquisition of Corvus Gold (KOR) by AngloGold Ashanti Limited for $450 million or $3.20 per share in cash. We have converted the closing price to USD using the latest conversion rate.
  3. The acquisition of GreenSky (GSKY) by The Goldman Sachs Group (GS) for $2.24 billion in an all stock deal. Under the terms of the agreement, GreenSky stockholders will receive 0.03 shares of common stock of Goldman Sachs for each share of GreenSky Class A common stock.
  4. The acquisition of Kansas City Southern (KSU) by Canadian Pacific Railway Limited (CP) for $30.44 billion in a cash plus stock deal. Under the terms of the agreement, each share of KCS common stock will be exchanged for $90 in cash and 2.884 shares of CP common stock.
  5. The merger of Great Western Bancorp (GWB) and First Interstate BancSystem (FIBK) for $2 billion in an all stock deal. Under the terms of the agreement, GWB shareholders will receive 0.8425 shares of FIBK Class A common stock for each GWB share they own.

Deal Updates:

  1. On September 10, 2021, Magnachip Semiconductor Corporation (MX) announced that through outside legal counsel, asked CFIUS to permit them to withdraw and re-file their June 11, 2021 notice concerning the Merger, in order to permit further discussion with CFIUS concerning potential options for permanently mitigating risks to the national security that have been identified by CFIUS.
  2. On September 13, 2021, Veoneer (VNE) confirmed that it has received an updated non-binding proposal from Qualcomm providing for the acquisition of all of the outstanding shares of Veoneer at a price of $37.00 per share in cash, following Qualcomm’s public announcement of a proposal on August 5, 2021.
  3. On September 14, 2021, Xeris Pharmaceuticals (XERS) announced that its stockholders have voted to approve the previously announced proposed acquisition of Strongbridge Biopharma (SBBP) by Xeris.
  4. On September 14, 2021, Ventas (VTR) and New Senior Investment Group (SNR) announced that New Senior stockholders have approved the previously announced merger pursuant to which New Senior will merge with and into a subsidiary of Ventas.
  5. On September 14, 2021, shareholders of Lydall (LDLapproved the company’s merger with Unifrax at a special meeting of shareholders.
  6. On September 15, 2021, Raven Industries (RAVN) announced that its shareholders voted strongly to approve the pending transaction with CNH Industrial (CNHI).
  7. On September 16, 2021, First Midwest Bancorp (FMBI) announced that its stockholders have overwhelmingly approved the proposed merger between First Midwest and Old National Bancorp (ONB).
  8. On September 17, 2021, Proxy advisory firm Institutional Shareholder Services on recommended a vote by shareholders against Zoom Video Communications (ZM) deal for Five9 (FIVN).
  9. On September 17, 2021, W. R. Grace & (GRA) announced that, the Company’s shareholders approved a proposal to adopt the merger agreement between Grace and an affiliate of Standard Industries Holdings.

Closed Deals:

  1. The acquisition of Translate Bio (TBIO) by Sanofi  (SNY) on September 14, 2021. It took 42 days for this deal to be completed. It took 42 days for this deal to be completed.
  2. The acquisition of Premier Financial Bancorp (PFBI) by Peoples Bancorp (PEBO) on September 17, 2021. It took 172 days for this deal to be completed.

Terminated Deals: 

  1. On September 15, 2021, Kansas City Southern (KSUterminated the Canadian National Railway Company (CNI) merger agreement and is entering into a merger agreement with Canadian Pacific Railway Limited (CP).

Top 10 deals with largest spreads:

TEDU04/30/2021Kidedu Holdings Limited (N/A)$4.00$1.4209/30/2021181.69%6028.81%
MX03/26/2021South Dearborn Limited (N/A)$29.00$17.9812/31/202161.29%217.19%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$41.4412/31/202123.07%81.75%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.8412/31/202117.90%63.44%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$179.03$153.7812/31/202116.42%58.18%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$28.4506/30/202213.88%17.84%
MSON07/29/2021Bioventus Inc. (BVS)$28.00$24.8212/31/202112.81%45.40%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$71.6212/31/202110.37%36.76%
COHR03/25/2021II-VI Incorporated (IIVI)$275.02$250.8312/31/20219.64%34.17%
KDMN09/08/2021Sanofi (SNY)$9.50$8.7312/31/20218.82%31.26%

List of all pending deals:

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

Target VolumeEstimated
Closing Date
+TEDU4/30/21Kidedu Holdings Limited (N/A)All Cash$230.6 M$4.00$1.42151,7969/30/21181.69%6631.69%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$17.98552,83412/31/2161.29%219.32%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$41.44526,22012/31/2123.07%82.55%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$21.842,425,14612/31/2117.90%64.06%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$179.03$153.782,818,49012/31/2116.42%58.75%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$28.451,083,8256/30/2213.88%17.91%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$24.82137,33112/31/2112.81%45.85%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$71.62328,46112/31/2110.37%37.12%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$275.02$250.83310,81712/31/219.64%34.51%
+KDMN9/08/21Sanofi (SNY)All Cash$1.64 B$9.50$8.738,750,73212/31/218.82%31.56%
+XONE8/11/21Desktop Metal, Inc. (DM)Special Conditions$418.26 M$25.50$23.48337,36512/31/218.60%30.79%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$20.94305,8639/30/217.93%289.35%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.02342,7813/31/226.72%12.78%
+TRIL8/23/21Pfizer Inc. (PFE)All Cash$1.2 B$18.50$17.342,578,22912/31/216.69%23.94%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$20.63953,5253/31/226.64%12.62%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$190.91238,7761/31/226.33%17.38%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$11.34210,15812/31/215.82%20.83%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$19.73$18.87228,1191/31/224.55%12.48%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$126.69$121.734,986,24812/31/214.08%14.59%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.25365,8193/31/223.67%6.98%
+HRC9/02/21Baxter International Inc. (BAX)All Cash$12.4 B$156.00$150.52,318,2943/31/223.65%6.95%
+GWB9/16/21First Interstate BancSystem, Inc. (FIBK)All Stock$2 B$32.64$31.572,620,8093/31/223.38%6.43%
+TRMT4/26/21RMR Mortgage Trust (RMRM)Cash Plus Stock$252.33 M$5.76$5.5811,7009/30/213.15%115.10%
+BOCH6/24/21Columbia Banking System, Inc. (COLB)All Stock$266 M$13.66$13.25241,41612/31/213.12%11.18%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$72.16$70.05747,7441/31/223.01%8.26%
+GTS8/24/21GuideWell Mutual Holding Corporation (N/A)All Cash$665.93 M$36.00$35.08249,3476/30/222.62%3.38%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$14.43$14.075,202,7056/30/222.58%3.33%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$20.39$19.913,8101/31/222.45%6.71%
+KSU9/15/21Canadian Pacific Railway Limited (CP)Cash Plus Stock$30.44 B$283.89$277.461,179,78412/31/212.32%8.29%
+ITMR9/13/21ZOLL Medical Corporation (N/A)All Cash$399.11 M$31.00$30.30252,28512/31/212.31%8.27%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.461,804,0351/31/222.30%6.32%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.5752,34012/31/212.13%7.61%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$16.75$16.4271,62512/31/212.00%7.16%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.651,558,72112/31/211.98%7.10%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$22.05$21.631,290,9983/31/221.96%3.72%
+ACBI7/23/21SouthState Corporation (SSB)All Stock$542 M$23.30$22.86325,9243/31/221.92%3.65%
+SOGO9/29/20Tencent Parties (N/A)All Cash$2.19 B$8.95$8.74449,12512/31/211.83%6.55%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$51.07184,3393/31/221.82%3.46%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$10.49$10.3183,80312/31/211.81%6.49%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$49.412,023,90912/31/211.80%6.45%
+SCR8/05/21Penn National Gaming, Inc. (PENN)Cash Plus Stock$2 B$34.89$34.281,627,7113/31/221.77%3.36%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.45$24.04181,38312/31/211.71%6.11%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.15,891,44012/31/211.63%5.84%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.752,078,89112/31/211.60%5.74%
+CXP9/07/21Pacific Investment Management Company LLC (N/A)All Cash$3.9 B$19.30$193,266,73712/31/211.58%5.65%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$7.82$7.71,258,58412/31/211.58%5.64%
+NNA8/26/21Navios Maritime Partners L.P. (NMM)All Stock$1.93 B$3.72$3.66202,97212/31/211.51%5.41%
+INOV8/19/21Nordic Capital (N/A)All Cash$7.3 B$41.00$40.391,842,0291/31/221.51%4.14%
+VEI8/10/21Chesapeake Energy Corporation (CHK)Cash Plus Stock$2.2 B$16.38$16.14775,21712/31/211.50%5.37%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$28.54$28.13110,5003/31/221.46%2.78%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$51.07$50.4385,26112/31/211.33%4.77%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$16.23$16.028,021,24412/31/211.32%4.71%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$22.67$22.3816,2621/31/221.31%3.60%
+KOR9/13/21AngloGold Ashanti Limited (N/A)All Cash$450 M$3.20$3.1600289,9613/31/221.27%2.41%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$54.84916,17312/31/211.20%4.31%
+DSPG8/30/21Synaptics Incorporated (SYNA)All Cash$399.78 M$22.00$21.74660,43912/31/211.20%4.28%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$57.351,579,95412/31/211.13%4.06%
+GSKY9/15/21The Goldman Sachs Group (GS)All Stock$2.24 B$11.74$11.626,462,6423/31/221.07%2.03%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$22.54$22.313,403,38712/31/211.05%3.74%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$40.39$40.02575,0416/30/220.93%1.20%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$18.09$17.931,750,5921/31/220.90%2.48%
+ECHO9/10/21The Jordan Company, L.P. (N/A)All Cash$939.64 M$48.25$47.821,120,44312/31/210.90%3.22%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$114.3175,87612/31/210.85%3.04%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.111,272,06312/31/210.70%2.49%
+GPX7/15/21Learning Technologies Group (N/A)All Cash$394 M$20.85$20.71290,20012/31/210.68%2.42%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$12.83$12.7513,92512/31/210.64%2.29%
+CSOD8/05/21Clearlake Capital Group, L.P. (N/A)All Cash$5.2 B$57.50$57.151,767,59512/31/210.61%2.19%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$47.71$47.431,776,77012/31/210.60%2.15%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$40.01$39.78302,31412/31/210.59%2.10%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$50.84$50.56519,7239/30/210.54%19.86%
+JAX7/02/21SPB Hospitality LLC (N/A)All Cash$220 M$14.00$13.94111,80711/15/210.43%2.81%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.62597,69712/31/210.40%1.44%
+STMP7/09/21Thoma Bravo (N/A)All Cash$6.6 B$330.00$328.7408,3789/30/210.40%14.44%
+CLDR6/01/21Clayton, Dubilier & Rice and KKR (N/A)All Cash$5.3 B$16.00$15.942,291,44212/31/210.38%1.35%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$19.67$19.6398,24312/31/210.36%1.29%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$189.35325,5776/30/220.34%0.44%
+JMP9/08/21Citizens Financial Group, Inc. (CFG)All Cash$149 M$7.50$7.4866,55612/31/210.27%0.96%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.86664,73212/31/210.25%0.90%
+LDL6/21/21Unifrax (N/A)All Cash$1.3 B$62.10$61.95373,75212/31/210.24%0.87%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.923,818,74612/31/210.24%0.84%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$12.86$12.833,010,25112/31/210.22%0.80%
+SC8/24/21Santander Holdings USA, Inc. (N/A)All Cash$12.7 B$41.50$41.412,258,02912/31/210.22%0.78%
+XEC5/24/21Cabot Oil & Gas Corporation (COG)All Stock$8.59 B$77.92$77.762,290,78612/31/210.21%0.75%
+SIC8/09/21Sun Capital Partners, Inc. (N/A)All Cash$411 M$14.50$14.47296,45010/31/210.21%1.85%
+ALTA5/18/21Glacier Bancorp, Inc. (GBCI)All Stock$933.5 M$40.27$40.2115,94012/31/210.17%0.62%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$87.38413,13312/31/210.14%0.49%
+IEC8/12/21Creation Technologies Inc. (N/A)All Cash$242.3 M$15.35$15.33703,54810/31/210.13%1.16%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.50$12.4935,4589/30/210.10%3.48%
+GRA4/26/21Standard Industries Holdings Inc. (N/A)All Cash$7 B$70.00$69.982,313,05012/31/210.03%0.10%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$21.19$21.19924,19212/31/21-0.02%-0.07%
+SNR6/28/21Ventas, Inc. (VTR)All Stock$2.3 B$8.91$8.921,650,63312/31/21-0.08%-0.27%
+LMRK8/23/21Landmark Dividend LLC (N/A)All Cash$997.25 M$16.50$16.5231,23512/31/21-0.12%-0.43%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$50.97$51.341,002,4769/30/21-0.73%-26.57%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$8.93$9.01130,5719/30/21-0.94%-34.43%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$34.59$35.310,80212/31/21-2.01%-7.21%
+SBBP5/24/21Xeris Pharmaceuticals, Inc. (XERS)All Stock$267 M$2.04$2.12233,46211/15/21-3.85%-25.09%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$26.53$27.636,66812/31/21-3.98%-14.25%
+FIVN7/18/21Zoom Video Communications, Inc. (ZM)All Stock$14.7 B$159.17$175.064,663,2166/30/22-9.07%-11.70%
+VNE7/22/21Magna International Inc. (MGA)All Cash$3.3 B$31.25$34.69875,69112/31/21-9.92%-35.49%


While one bidding war came to an end last week, another one continues. Veoneer (VNE) confirmed last week that it received an updated non-binding proposal from Qualcomm Incorporated (QCOM). After evaluating Qualcomm’s proposal, Veoneer will engage in negotiations with Qualcomm and/or Magna to ascertain the best possible outcome for its stockholders.

Disclaimer: I have long positions in Nuance Communications (NUAN), Change Healthcare (CHNG) and Trillium Therapeutics (TRIL). 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.