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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.

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.

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