Merger activity decreased last week with six new deals announced and six deals completed. One of the deals announced last week was a potential deal in the works.
Beyond the standard M&A related news, an event that stood out last week was Elon Musk selling an additional $6.89 billion of Tesla (TSLA) stock just in case he was forced to perform on the Twitter (TWTR) deal by the Delaware Chancery Court. It was also interesting to see Chicken Soup for the Soul Entertainment (CSSE) close its acquisition of Redbox Entertainment just 92 days after announcing the deal. For much of the time after the deal was announced, Redbox traded at a massive premium to the deal price but it was near impossible to find enough shares to short the stock.
Global Blood Therapeutics (GBT)
Incorporated in 2011 and headquartered in South San Francisco, California, Global Blood Therapeutics is a biopharmaceutical company that engages in the treatment for underserved patient communities with sickle cell disease (SCD).
Sickle cell disease is an inherited blood disorder caused by a defective gene, called the sickle cell gene. It results in an abnormality in the oxygen-carrying protein haemoglobin found in red blood cells, which restricts blood flow through the body and can lead to serious problems, including stroke, eye problems, infections, and episodes of pain called pain crises. Stem cell or bone marrow transplants are the only cure for sickle cell disease, but are not done very often because of the significant risks involved.
Global Blood Therapeutics won approval in the U.S. for a sickle-cell drug named Oxbryta in 2019. The company has two other sickle-cell drugs in development. Vertex Pharmaceuticals (VRTX), a portfolio company that we wrote about in December 2020, also has a sickle-cell disease drug in phase 3 development in collaboration with CRISPR Therapeutics (CRSP).
We added Global Blood Therapeutics as a potential deal in the works on August 5, 2022, when Bloomberg reported that the company was attracting takeover interest. On August 8, 2022, Pfizer (PFE) and Global Blood Therapeutics, entered into a definitive agreement under which Pfizer will acquire GBT, in a transaction valued at $68.50 per share in cash, for a total enterprise value of approximately $5.4 billion, representing a premium of over 100% to GBT’s price on August 3, 2022, before the potential deal was announced.
Pfizer plans to boost its pipeline with this acquisition in order to combat the potential slowdown in the sales of Covid-19 drugs. Pfizer acquired Arena Pharmaceuticals and Trillium Therapeutics last year and is in the process of completing the acquisition of Biohaven Pharmaceutical (BHVN).
According to an article on The Wall Street Journal,
“The acquisition continues a string of deals for Pfizer, which is flush with cash from sales of its Covid-19 vaccine and drug. It has said it wants to add $25 billion in revenue from business-development moves like mergers and acquisitions by 2030.“
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
Deals In The Works
There were four new potential deals added to the Deals in the Works section last week.
There were two new SPAC IPOs filed and three new SPAC combinations announced last week. You can find new SPAC IPO announcements in our SPACs tool here.
New Business Combinations
Weekly Spread Changes:
The table below shows weekly spread changes between August 5, 2022 and August 12, 2022.
|IS||4.01||Unity (U)||58.47||58.79%||8.58%||50.21%||All Stock|
|HMTV||7.14||Gato Investments LP (N/A)||-1.96%||-10.26%||8.30%||All Cash|
|TYME||0.3415||Syros Pharmaceuticals, Inc. (SYRS)||0.9551||20.60%||14.14%||6.46%||All Stock|
|EMCF||33||Farmers National Banc Corp. (FMNB)||15||-2.27%||-4.18%||1.91%||All Stock|
|FSTX||6.5||invoX Pharma (N/A)||9.54%||7.88%||1.66%||All Cash|
|VMW||121.96||Broadcom Inc. (AVGO)||558.23||16.84%||21.54%||-4.70%||Special Conditions|
|TWTR||44.26||Elon Musk (N/A)||22.46%||27.47%||-5.01%||All Cash|
|BKI||67.14||Intercontinental Exchange, Inc. (ICE)||109.68||26.60%||31.76%||-5.16%||Special Conditions|
|MITO||0.3041||Stealth Parent Limited (N/A)||0.00||24.96%||31.94%||-6.98%||All Cash|
|NLSN||27.58||Evergreen Coast Capital Corporation (N/A)||1.52%||21.53%||-20.01%||All Cash|
|Total Number of Deals Closed in 2022||116|
|Total Number of Deals Not Completed in 2022||6|
|Total Number of Pending Deals|
|Stock & Cash Deals||4|
|Total Number of Pending Deals||97|
|Total Deal Size||$1.03 trillion|
Top 10 deals with largest spreads:
Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.
|LOTZ||08/09/2022||Shift Technologies, Inc. (SFT)||$0.85||$0.6000||12/31/2022||41.89%||110.01%|
|SAVE||07/28/2022||JetBlue Airways Corporation (JBLU)||$33.50||$24.57||06/30/2024||36.35%||19.34%|
|SIMO||05/05/2022||MaxLinear, Inc. (MXL)||$109.62||$82.61||06/30/2023||32.69%||37.29%|
|BKI||05/04/2022||Intercontinental Exchange, Inc. (ICE)||$85.00||$67.14||06/30/2023||26.60%||30.34%|
|MITO||08/01/2022||Stealth Parent Limited (N/A)||$0.38||$0.3041||12/31/2022||24.96%||65.54%|
|TWTR||04/25/2022||Elon Musk (N/A)||$54.20||$44.26||12/31/2022||22.46%||58.97%|
|TYME||07/05/2022||Syros Pharmaceuticals, Inc. (SYRS)||$0.41||$0.3415||12/31/2022||20.60%||54.09%|
|SJR||03/15/2021||Rogers Communications Inc. (RCI)||$32.40||$27.41||09/30/2022||18.21%||141.38%|
|ATVI||01/18/2022||Microsoft Corporation (MSFT)||$95.00||$80.79||06/30/2023||17.59%||20.06%|
List of all pending deals:
List of all pending deals:
Disclaimer: I have long positions in Atlas Air Worldwide (AAWW), Biohaven Pharmaceutical (BHVN), Twitter (TWTR), First Horizon (FHN), Tower Semiconductor (TSEM), TEGNA (TGNA) and Bluerock Residential Growth REIT (BRG). 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.