Merger Arbitrage Mondays – Bidding War And A Busted Deal

  • December 6, 2021

New deal activity declined for the third week in a row with one new deal announced last week. We did see nine deals completed with one of the nine completing in just 57 days. Regulatory issues continued to weigh on some active deals with one deal falling apart because of opposition from the FTC. On the positive side, bidding wars continue and R. R. Donnelley & Sons Company (RRD), the subject of the latest bidding war decided to go with a new suitor as discussed below.

Significant Weekly Spread Changes

  1. There was a 13.78% weekly spread change for Momentive (MNTV) last week after Zendesk (ZEN) received a letter from activist Jana Partners, which owns a “significant” stake in the company. Jana Partners urged the company to abandon the Momentive deal. Momentive dropped 3.2% and Zendesk rose 7.7% after this announcement.
  2. R. R. Donnelley & Sons Company (RRD) saw its spread tighten by 12.31% after the company’s Board of Directors determined that Chatham Asset Management’s proposal to acquire RRD for $10.25 per share in cash constituted a “Superior Proposal”. Chatham also agreed to pay the $20 million termination fee and expense reimbursement on RRD’s behalf to Atlas Holdings.
  3.  PNM Resources (PNM) shares dropped to 5.7% on Thursday, December 2, 2021 after majority of New Mexico regulators voiced opposition to Avangrid’s bid to take over the company.
  4. Advanced Micro Devices (AMD) CEO Lisa Su said last month that the chipmaker was making “good progress” toward finalizing the acquisition of Xilinx (XLNX) by the end of the year. The deal has received antitrust clearance in the US and Europe and is awaiting approval from China.

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 12 SPAC IPOs filed and 5 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Essentium an innovator of industrial additive manufacturing solutions, announced that it has entered into a definitive business combination agreement with Atlantic Coastal Acquisition Corporation (ACAH).
  2. Voltus, a Distributed Energy Resource (DER) software technology platform, and Broadscale Acquisition (SCLEannounced a definitive agreement for a business combination that will result in Voltus becoming the first publicly traded pure-play DER software technology company.
  3. Rumble and CF Acquisition Corp. VI (CFVI) announced that they have entered into a definitive business combination agreement.
  4. OPAL Fuels, a vertically integrated producer and distributor of renewable natural gas (RNG) and ArcLight Clean Transition Corp. II (ACTDannounced a definitive agreement for a business combination.
  5. American Express Global Business Travel, a B2B travel platform, announced its entry into a definitive business combination agreement with Apollo Strategic Growth Capital (APSG).

Weekly Spread Changes:

The table below shows weekly spread changes between November 26 and December 3, 2021.

Company Quote
Last Week
Spread Change
MNTV18.91Zendesk (ZEN)96.8815.27%1.49%13.78%All Stock
PNM45.27Avangrid, Inc. (AGR)50.3911.11%1.37%9.74%All Cash
MX17.47South Dearborn Limited (N/A)66.00%58.47%7.53%All Cash
SOLY20.12Allergan Aesthetics (N/A)12.33%8.55%3.78%All Cash
CHNG20.33UnitedHealth Group Incorporated (UNH)449.3226.66%24.22%2.44%All Cash
NFH11.4Unicorn II Holdings Limited (N/A)5.26%9.39%-4.13%All Cash
AZPN151.59Emerson Electric Co. (EMR)90.285.55%10.22%-4.67%Special Conditions
JOBS56Garnet Faith Limited (N/A)41.16%45.88%-4.72%All Cash
XLNX217.06Advanced Micro Devices, Inc. (AMD)144.0114.34%19.13%-4.79%All Stock
RRD10.73Atlas Holdings LLC (N/A)-20.60%-8.29%-12.31%All Cash

Deal Statistics:

Total Number of Deals Closed in 2021184
Total Number of Deals Not Completed in 202114
Total Number of Pending Deals
Cash Deals47
Stock Deals27
Stock & Cash Deals6
Special Conditions4
Total Number of Pending Deals84
Total Deal Size$1.01 trillion

New Deals:

  1. The merger of SLR Senior Investment (SUNS) with SLR Investment (SLRC). Under the terms of the proposed merger, SUNS shareholders will receive an amount of SLRC shares with a net asset value equal to the NAV of SUNS shares that they hold at the time of closing. The exchange ratio will be determined within forty-eight hours prior to the closing such that shares issued by SLRC to SUNS shareholders will result in an ownership split of the combined company based on the respective NAVs of each of SLRC and SUNS. We have not added this deal to the Merger Arbitrage Tool because the exchange ratio will be determined shortly before the closing of the transaction.

Deal Updates:

  1. On November 29, 2021, R. R. Donnelley & Sons Company (RRDannounced the expiration of the “go-shop” period set forth in the previously announced definitive merger agreement with affiliates of Atlas Holdings. Chatham Asset Management offered to acquire R.R. Donnelley (RRD) For $10.25 per share in cash on the same day.
  2. On November 30, 2021, Jana Partners sent a letter to Zendesk (ZEN), urging the company to abandon the Momentive (MNTV) deal.
  3. On December 1, 2021, R. R. Donnelley & Sons Company (RRD) announced that its Board of Directors unanimously determined that an unsolicited proposal from Chatham Asset Management to acquire all of the common stock of the Company not already owned by Chatham and its affiliates for $10.25 per share in cash constitutes a “Superior Proposal” as defined in the Company’s previously announced definitive merger agreement with affiliates of Atlas Holdings.
  4. On December 1, 2021, Teekay LNG Partners (TGP) announced that at a special meeting of common unitholders of the Partnership held on December 1, 2021, its common unitholders voted to approve the proposed acquisition by merger of Teekay LNG by Stonepeak Limestone Holdings. The merger is currently anticipated to close in mid-January 2022.
  5. On December 1, 2021, PAE Incorporated (PAEannounced the expiration of the “go-shop” period under the terms of the previously announced definitive agreement in which it agreed to be acquired by an affiliate of Amentum Government Services Holdings.
  6. On December 1, 2021, The Board of Directors of TriState Capital Holdings (TSC) announced its decision to name James F. Getz executive chairman and appoint Brian S. Fetterolf to serve as the company’s president and chief executive officer, effective January 1, 2022.
  7. On December 2, 2021, Hillrom (HRC) announced that its shareholders have voted to approve the previously announced pending acquisition by Baxter International (BAX) at a special meeting.
  8. On December 2, 2o21, Aspen Technology (AZPN) announced, in connection with its proposed transaction with Emerson (EMR), the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and antitrust clearance from the Austrian Federal Competition Authority.
  9. On December 2, 2021, Shareholders of Columbia Property Trust (CXPapproved the company’s merger with Pacific Investment Management Company at a special meeting of shareholders.
  10. On December 2, 2021, The New Mexico Public Regulation Commission (NMPRC) began its consideration of the merger application involving PNM Resources (PNM) and AVANGRID (AGR) during its regular open meeting.
  11. On December 2, 2021, New Frontier Health Corporation (NFH) announced that it has called an extraordinary general meeting of shareholders to be held on January 7, 2022.
  12. On December 3, 2021, PNM Resources (PNM) and AVANGRID (AGR) answered open questions at a news conference about their proposed merger and addressed some concerns heard at the New Mexico Public Regulation Commission open meeting.

Closed Deals:

  1. The acquisition of Raven Industries (RAVN) by CNH Industrial N.V (CNHI) on November 30, 2021. It took 162 days for this deal to be completed.
  2. The acquisition of Domtar Corporation (UFS) by Paper Excellence on November 30, 2021. It took 203 days for this deal to be completed.
  3. The acquisition of Covanta Holding Corporation (CVA) by EQT Infrastructure on November 30, 2021. It took 139 days for this deal to be completed.
  4. The acquisition of Riverview Financial Corporation (RIVE) by Mid Penn Bancorp (MPB) on December 1, 2021. It took 153 days for this deal to be completed.
  5. The acquisition of Enable Midstream Partners (ENBL) by Energy Transfer (ET) on December 2, 2021. It took 288 days for this deal to be completed.
  6. The acquisition of Meredith Corporation (MDP) by IAC/InterActiveCorp and Gray Television on December 2, 2021. It took 57 days for this deal to be completed.
  7. The acquisition of DSP Group (DSPG) by Synaptics Incorporated (SYNA) on December 2, 2021. It took 94 days for this deal to be completed.
  8. The acquisition of Community Bankers Trust Corporation (ESXB) by United Bankshares (UBSI) on December 3, 2021. It took 183 days for this deal to be completed.
  9. The acquisition of County Bancorp (ICBK) by Nicolet Bankshares (NCBS) on December 3, 2021. It took 164 days for this deal to be completed.

Terminated Deals:

  1. On December 2, 2021, Sportsman’s Warehouse Holdings (SPWH) and Great Outdoors Group, called off their merger deal. The decision follows feedback from the U.S. Federal Trade Commission (FTC) that led the companies to believe they would not receive clearance to close the deal. Great Outdoors Group agreed to pay Sportsman’s Warehouse a termination fee of $55 million.

Top 10 deals with largest spreads:

MX03/26/2021South Dearborn Limited (N/A)$29.00$17.4712/31/202166.00%926.52%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$5612/31/202141.16%577.83%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$20.3302/28/202226.66%114.48%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$43.1703/31/202218.14%57.07%
MNTV10/28/2021Zendesk (ZEN)$21.80$18.9106/30/202215.27%26.93%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$248.19$217.0612/31/202114.34%201.31%
SOLY05/10/2021Allergan Aesthetics (N/A)$22.60$20.1203/31/202212.33%38.78%
PNM10/21/2020Avangrid, Inc. (AGR)$50.30$45.2712/31/202111.11%155.98%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$29.1706/30/202211.07%19.52%
STXB11/19/2021Simmons First National Corporation (SFNC)$30.94$28.6906/30/20227.85%13.85%

List of all pending deals:

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


Multiple active deals received required approvals for the successful completion of their transactions. Even as nine deals were successfully completed last week, regulatory concerns remain after Sportsman’s Warehouse Holdings terminated its deal following feedback from the FTC that the deal may not be approved. Another hurdle was New Mexico utility regulators voicing their opposition against Avangrid’s purchase of PNM Resources. M&A activity was almost muted as we entered into the last month of the year. SPAC activity continued to be steady with 12 new SPAC IPOs filed last week.

Disclaimer: I have long positions in Magnachip Semiconductor (MX), 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.