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Merger Arbitrage Mondays – Sanofi’s Second Purchase In Six Weeks

  • September 13, 2021

Merger activity increased last week with four new deals announced and three deals completed.

Incorporated in 2019 and headquartered in New York, Kadmon Holdings (KDMN) is a biopharmaceutical company that focuses on discovery, and development of transformative therapies for unmet medical needs. Rezurock (belumosudil), an oral, once-daily tablet, is approved by the FDA in the United States for the treatment of adult and pediatric patients 12 years and older with chronic graft-versus-host disease (cGVHD) after failure of at least two prior lines of systemic therapy. In just over a month after announcing the acquisition of Translate Bio (TBIO), French drugmaker, Sanofi entered into a definitive agreement to acquire Kadmon Holdings for $9.50 per share in cash, representing a premium of 79% over Kadmon’s closing price on September 7, 2021.

We have been writing about successful deals in the works in our past few posts. Another potential deal became successful last week. We added Columbia Property Trust to our list of potential deals on March 18, 2021, after Bloomberg reported that a group of CXP investors made an unsolicited proposal to acquire the company. CXP’s price after this announcement was $16.76. On September 7, 2021, Columbia Property Trust entered into an agreement to be acquired by PIMCO for $19.30 per share in cash.

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

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

SPAC Arbitrage

There were 5 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.  Novus Capital Corporation II (NXU) and Energy Vault announced that they have entered into a definitive agreement for a business combination.
  2. Packable entered into a definitive agreement to merge with Highland Transcend Partners I Corp. (HTPA).
  3. Golden Path Acquisition Corporation (GPCO) and MC Hologram announced that they have entered into a definitive merger agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between September 3 and September 10, 2021.

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
MX17.3South Dearborn Limited (N/A)67.63%61.74%5.89%All Cash
JOBS72.96Garnet Faith Limited (N/A)0.008.35%2.66%5.69%All Cash
XONE23.76Desktop Metal, Inc. (DM)8.147.32%2.70%4.62%Special Conditions
SAFM187.15Cargill and Continental Grain Company (N/A)8.47%4.10%4.37%All Cash
SJR28.89Rogers Communications Inc. (RCI)47.7912.15%8.91%3.24%Special Conditions
TRMT5.69RMR Mortgage Trust (RMRM)10.881.65%3.01%-1.36%Cash Plus Stock
ESXB10.49United Bankshares, Inc. (UBSI)33.471.24%2.79%-1.55%All Stock
SBBP2.27Xeris Pharmaceuticals, Inc. (XERS)2.67-7.79%-4.80%-2.99%All Stock
FVCB19.72Blue Ridge Bankshares, Inc. (BRBS)17.280.70%4.76%-4.06%All Stock
XLNX155.06Advanced Micro Devices, Inc. (AMD)105.216.92%21.46%-4.54%All Stock

Deal Statistics:

Total Number of Deals Closed in 2021131
Total Number of Deals Not Completed in 20219
Total Number of Pending Deals
Cash Deals50
Stock Deals35
Stock & Cash Deals9
Special Conditions3
Total Number of Pending Deals97
Aggregate Deal Consideration$879.2 billion

New Deals:

  1. The acquisition of Columbia Property Trust (CXP) by PIMCO for $3.9 billion or $19.30 per share in cash. We added CXP as a potential deal to the Deals in the Works section on March 18, 2021, and the price after the news of the potential deal came out was $16.76.
  2. The acquisition of Kadmon Holdings (KDMN) by Sanofi (SNY) for $1.64 billion or $9.50 per share in cash.
  3. The acquisition of JMP Group (JMP) by Citizens Financial Group (CFG) for $149 million or $7.50 per share in cash.
  4. The acquisition of Echo Global Logistics (ECHO) by The Jordan Company for $939.64 million or $48.25 per share in cash.

Deal Updates:

  1. On September 3, 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 IEC Electronics (IEC) and Creation Technologies.
  2. On September 7, 2021, Medallia (MDLA) announced the expiration of the 40-day “go-shop” period under the terms of the previously announced merger agreement pursuant to which Thoma Bravo will acquire Medallia in an all-cash transaction.
  3. On September 7, 2021, Intersect ENT (XENT) announced that the special meeting of stockholders will be held virtually on October 8, 2021.
  4. On September 7, 2021, W. R. Grace & Co. (GRA) announced that it has received all required regulatory approvals to complete the merger with Standard Industries Holdings. Assuming receipt of the Company Stockholder Approval at the special meeting of stockholders to be held on September 17, 2021, closing of the Merger is expected to occur on September 22, 2021.
  5. On September 7, 2021, Nicolet Bankshares (NCBS) announced that is has received all regulatory approvals for the Merger with County Bancorp (ICBK). Completion of the Merger remains subject to approval by shareholders of both Nicolet and County, as well as other customary closing conditions. Assuming shareholder approval is received and other closing conditions are satisfied, Nicolet expects to complete the Merger on December 3, 2021.
  6. On September 8, 2021, Golden Nugget Online Gaming (GNOG) announced that its shareholders voted overwhelmingly to approve its acquisition by DraftKings (DKNG).
  7. On September 8, 2021, Strongbridge Biopharma (SBBP) announced that its shareholders have voted to approve the previously announced proposed acquisition of Strongbridge by Xeris Pharmaceuticals (XERS).
  8. On September 9, 2021, QAD Inc. (QADA) announced that the special meeting of stockholders will be held virtually on October 15, 2021.
  9. On September 9, 2021, Ferro Corporation (FOE) announced that its shareholders voted overwhelmingly to approve its acquisition by an affiliate of Prince International Corporation.
  10. On September 9, 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 Medallia (MDLA) and Thoma Bravo.
  11. On September 12, 2021, Kansas City Southern (KSU) announced that the KCS Board of Directors determined that CP’s (CP) revised proposal constitutes a “Company Superior Proposal” as defined in KCS’s merger agreement with Canadian National Railway Company (CNI). Under the terms of CP’s proposal, each share of KCS common stock would be exchanged for 2.884 CP common shares and $90 in cash.

Closed Deals:

  1. The acquisition of  Cincinnati Bell (CBB) by Macquarie Infrastructure Partners on September 7, 2021. It took 543 days for this deal to be completed.
  2. The acquisition of The New Home Company (NWHM) by Apollo Global Management on September 8, 2021. It took 47 days for this deal to be completed.
  3. The acquisition of Ossen Innovation (OSN) by New Ossen Group Limited on September 10, 2021. It took 267 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$1.509/30/2021166.67%3379.63%
MX03/26/2021South Dearborn Limited (N/A)$29.00$17.312/31/202167.63%224.41%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$42.3812/31/202120.34%67.49%
KSU05/21/2021Canadian National Railway Company (CNI)$334.24$28012/31/202219.37%14.88%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.7712/31/202118.28%60.66%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$181.30$155.0612/31/202116.92%56.16%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$28.8906/30/202212.15%15.24%
COHR03/25/2021II-VI Incorporated (IIVI)$275.90$251.9712/31/20219.50%31.52%
MSON07/29/2021Bioventus Inc. (BVS)$28.00$25.6312/31/20219.25%30.68%
SAFM08/09/2021Cargill and Continental Grain Company (N/A)$203.00$187.1501/31/20228.47%21.92%

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$1.5208,7869/30/21166.67%3578.43%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$17.3211,95712/31/2167.63%226.47%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$42.38170,48612/31/2120.34%68.11%
+KSU5/21/21Canadian National Railway Company (CNI)Cash Plus Stock$33.6 B$334.24$280.001,080,29612/31/2219.37%14.92%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$21.77745,52212/31/2118.28%61.22%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$181.30$155.061,351,05812/31/2116.92%56.67%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$28.89266,7656/30/2212.15%15.29%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$275.90$251.9777,65912/31/219.50%31.80%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$25.6346,21412/31/219.25%30.96%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$187.15322,4931/31/228.47%22.08%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$72.96236,26612/31/218.35%27.95%
+XONE8/11/21Desktop Metal, Inc. (DM)Special Conditions$418.26 M$25.50$23.76332,87512/31/217.32%24.52%
+TRIL8/23/21Pfizer Inc. (PFE)All Cash$1.2 B$18.50$17.291,987,74712/31/217.00%23.43%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$21.18129,9829/30/216.70%143.95%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$11.25111,63312/31/216.67%22.32%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.221,7143/31/225.86%10.74%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$127.78$120.822,391,88712/31/215.76%19.28%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$21661,1853/31/224.76%8.73%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$19.82$18.96132,2831/31/224.53%11.80%
+KDMN9/08/21Sanofi (SNY)All Cash$1.64 B$9.50$9.0917,480,57212/31/214.51%15.10%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.06213,9223/31/224.40%8.07%
+SCR8/05/21Penn National Gaming, Inc. (PENN)Cash Plus Stock$2 B$36.14$34.75281,6473/31/224.00%7.33%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$12.58$12.144,03812/31/213.63%12.14%
+HRC9/02/21Baxter International Inc. (BAX)All Cash$12.4 B$156.00$150.871,834,6623/31/223.40%6.24%
+ACBI7/23/21SouthState Corporation (SSB)All Stock$542 M$23.95$23.31204,0453/31/222.73%5.01%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$69.77$68562,3241/31/222.60%6.78%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$16.32$15.9120,61512/31/212.58%8.63%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$28.19$27.4843,6893/31/222.57%4.72%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$22.55$22.036,6041/31/222.37%6.17%
+GTS8/24/21GuideWell Mutual Holding Corporation (N/A)All Cash$665.93 M$36.00$35.19149,9856/30/222.30%2.90%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.5520,2791/31/222.13%5.55%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$7.99$7.83262,23012/31/212.09%6.99%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$5193,7693/31/221.96%3.60%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.681,429,09912/31/211.81%6.06%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$22.80$22.4950,3393/31/221.78%3.26%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.691,316,51212/31/211.73%5.81%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$21.70$21.34548,21512/31/211.71%5.71%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$14.19$13.951,244,7016/30/221.69%2.13%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$49.59$48.77175,44912/31/211.67%5.61%
+TRMT4/26/21RMR Mortgage Trust (RMRM)Cash Plus Stock$252.33 M$5.78$5.6935,9209/30/211.65%35.50%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.39$24622,81612/31/211.64%5.48%
+TBIO8/03/21Sanofi (SNY)All Cash$1.94 B$38.00$37.41536,4129/30/211.58%33.86%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.211,351,55412/31/211.43%4.79%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.48$12.313,8219/30/211.41%30.22%
+SOGO9/29/20Tencent Parties (N/A)All Cash$2.19 B$8.95$8.78207,55612/31/211.37%4.58%
+CXP9/07/21Pacific Investment Management Company LLC (N/A)All Cash$3.9 B$19.30$19.046,935,16912/31/211.37%4.57%
+INOV8/19/21Nordic Capital (N/A)All Cash$7.3 B$41.00$40.45826,0931/31/221.36%3.54%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$49.65522,03912/31/211.31%4.38%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$10.62$10.49115,84612/31/211.24%4.15%
+NNA8/26/21Navios Maritime Partners L.P. (NMM)All Stock$1.93 B$3.95$3.9215,99012/31/211.22%4.07%
+ECHO9/10/21The Jordan Company, L.P. (N/A)All Cash$939.64 M$48.25$47.704,564,41012/31/211.15%3.86%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$22.50$22.25640,68612/31/211.13%3.79%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.7496,66912/31/211.10%3.67%
+VEI8/10/21Chesapeake Energy Corporation (CHK)Cash Plus Stock$2.2 B$16.00$15.83250,28512/31/211.08%3.63%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$18.14$17.95362,1211/31/221.05%2.72%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.05553,99912/31/211.00%3.34%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$53.58$53.06232,2729/30/210.98%21.03%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$54.98189,71712/31/210.95%3.17%
+DSPG8/30/21Synaptics Incorporated (SYNA)All Cash$399.78 M$22.00$21.8351,56712/31/210.92%3.07%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$19.50$19.3394,59212/31/210.87%2.90%
+BOCH6/24/21Columbia Banking System, Inc. (COLB)All Stock$266 M$13.46$13.3552,72612/31/210.85%2.86%
+SIC8/09/21Sun Capital Partners, Inc. (N/A)All Cash$411 M$14.50$14.3968,36310/31/210.76%5.81%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$39.11$38.8277,04212/31/210.73%2.46%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$114.476,44312/31/210.71%2.37%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$19.86$19.7214,6801/31/220.70%1.83%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.792,270,54612/31/210.62%2.08%
+PFBI3/29/21Peoples Bancorp Inc. (PEBO)All Stock$292.3 M$17.91$17.821,7869/30/210.62%13.32%
+GPX7/15/21Learning Technologies Group (N/A)All Cash$394 M$20.85$20.7348,47912/31/210.58%1.94%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$40.61$40.391,394,4096/30/220.55%0.69%
+JMP9/08/21Citizens Financial Group, Inc. (CFG)All Cash$149 M$7.50$7.46197,24012/31/210.54%1.80%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$47.88$47.63886,38812/31/210.53%1.78%
+CSOD8/05/21Clearlake Capital Group, L.P. (N/A)All Cash$5.2 B$57.50$57.2700,27412/31/210.52%1.76%
+CLDR6/01/21Clayton, Dubilier & Rice and KKR (N/A)All Cash$5.3 B$16.00$15.922,756,39912/31/210.50%1.68%
+ALTA5/18/21Glacier Bancorp, Inc. (GBCI)All Stock$933.5 M$40.29$40.0985,43012/31/210.49%1.63%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$8.63$8.5919,9469/30/210.47%10.00%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$51.38$51.15125,1599/30/210.44%9.49%
+STMP7/09/21Thoma Bravo (N/A)All Cash$6.6 B$330.00$328.58229,1509/30/210.43%9.28%
+XEC5/24/21Cabot Oil & Gas Corporation (COG)All Stock$8.59 B$73.55$73.24795,35612/31/210.42%1.41%
+JAX7/02/21SPB Hospitality LLC (N/A)All Cash$220 M$14.00$13.95174,10911/15/210.36%2.08%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.68207,27612/31/210.34%1.13%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$87.2659,02512/31/210.28%0.92%
+IEC8/12/21Creation Technologies Inc. (N/A)All Cash$242.3 M$15.35$15.31100,74610/31/210.26%1.99%
+SNR6/28/21Ventas, Inc. (VTR)All Stock$2.3 B$8.77$8.75542,44612/31/210.24%0.81%
+SC8/24/21Santander Holdings USA, Inc. (N/A)All Cash$12.7 B$41.50$41.4459,38512/31/210.24%0.81%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.8888,13612/31/210.21%0.72%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$16.02$15.992,011,75212/31/210.19%0.62%
+LDL6/21/21Unifrax (N/A)All Cash$1.3 B$62.10$62.0176,85312/31/210.15%0.49%
+GRA4/26/21Standard Industries Holdings Inc. (N/A)All Cash$7 B$70.00$69.92647,42312/31/210.11%0.38%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$57.94199,26412/31/210.10%0.35%
+LMRK8/23/21Landmark Dividend LLC (N/A)All Cash$997.25 M$16.50$16.49213,68812/31/210.06%0.20%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$35.11$35.1613,48712/31/21-0.14%-0.46%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$190.361,5646/30/22-0.16%-0.20%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$12.41$12.61800,19512/31/21-1.58%-5.31%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$26.09$26.63,46212/31/21-1.91%-6.39%
+FIVN7/18/21Zoom Video Communications, Inc. (ZM)All Stock$14.7 B$166.82$173.511,682,4256/30/22-3.86%-4.85%
+SBBP5/24/21Xeris Pharmaceuticals, Inc. (XERS)All Stock$267 M$2.09$2.27295,77711/15/21-7.79%-45.10%
+VNE7/22/21Magna International Inc. (MGA)All Cash$3.3 B$31.25$34.81436,61812/31/21-10.23%-34.25%

Conclusion:

We have added twenty three potential deals in the works since the beginning of the third quarter of 2021 and five of them have already been successful with four of them at significant premiums. Multiple deals received required regulatory and shareholder approvals last week. SPAC activity continued to grow last week with 5 new SPAC IPOs filed.

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.