Merger Arbitrage Mondays – Novo Nordisk Acquires Forma Therapeutics

  • September 5, 2022

Merger activity declined last week with one new deal announced and three deals completed.

The pace of M&A activity continued to stay low for the third week in a row, after The Wall Street Journal reported on August 15, 2022, that under Chairwoman Lina Khan, the Federal Trade Commission was questioning mergers that likely would have gone unchallenged in the past years. Ms. Khan said in an interview,

“In all too many areas of our economy, including agriculture, airlines, healthcare, we’ve seen significant consolidation and reduction of competition. Mergers have played a role in that.”

I discussed how Ms. Khan’s decision to block Meta’s acquisition of Within Unlimited is a game changer in an article titled The FTC Throws A Wrench Into The Meta Machine in early August and wrote the following,

Unbridled capitalism with no checks and balances is not good for consumers or society at large. Unfortunately, you could also go to the other extreme where onerous regulations and red tape stifle growth and innovation. If the Federal Trade Commission (FTC) or the Department of Justice (DOJ) decide to step in and sue to block a merger of large public companies, most companies give up and the deal falls apart. Every once in a while you end up with a situation like UnitedHealth Group’s acquisition of Change Healthcare (CHNG) where the companies decided to take their slim chances in court.

When the Biden administration named Lina Khan as the Chair of the FTCin June 2021, arbitrageurs who focus on picking up the spread between where a company is currently trading and the price an acquirer will pay for the company when the announced acquisition closes, realized that the regulatory environment is going to change and deals will go through increased scrutiny.

Some of the active deals in our MAT faced scrutiny last week as well. On Friday, September 2, 2022, One Medical (ONEM) and Amazon (AMZN) received a request for additional information and documentary materials from the FTC in connection with the FTC’s review of the merger. The following day, Reuters reported that the FTC has begun a review of Amazon’s takeover of iRobot (IRBT) to decide if the deal violates antitrust law.

Microsoft’s (MSFT) planned acquisition of Activision Blizzard (ATVI) is expected to go through an in-depth review by UK’s Competition and Markets Authority and the merger of MaxLinear (MXL) and Silicon Motion Technology Corporation (SIMO) remains subject to review and clearance by the State Administration for Market Regulation in the People’s Republic of China. The two parties were asked to refile for their planned acquisition last week.

On the bright side, four active deals received shareholders approval and we saw an increase in the number of potential deals in the works.

New Deal: Forma Therapeutics, Holdings (FMTX)

Headquartered in Watertown, Massachusetts, Forma Therapeutics Holdings is a clinical-stage biopharmaceutical company, that focuses on transforming the lives of patients with sickle cell disease (SCD) and rare blood disorders.

On August 8, 2022, Pfizer (PFE) entered into a definitive agreement to acquire Global Blood Therapeutics (GBT), another company that engages in the treatment for underserved patient communities with sickle cell disease (SCD). We had written the following about sickle cell disease in our Merger Arbitrage Mondays post that week.

“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.”

Forma Thearapeutics’ lead development candidate, Etavopivat is an investigational, once-daily, selective pyruvate kinase-R (PKR) activator, that is designed to be a disease-modifying therapy with the potential to improve red blood cell health and transform the lives of people living with SCD.

Forma Therapeutics Pipeline

On September 1, 2022, Novo Nordisk (NVO) entered into a definitive agreement to acquire Forma Therapeutics in order to expand its scientific presence in sickle cell disease and rare blood disorders. This deal comes in almost a month after Pfizer announced its acquisition of Global Blood Therapeutics. Under the terms of the agreement, Novo Nordisk will acquire Forma Therapeutics for $20 per share in cash, representing a premium of 92% to Forma Therapeutics’ volume-weighted average price per share over the past 30 days ended August 31, 2022. The deal is expected to be completed in the fourth quarter of 2022.

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.

  1. On August 29, 2022, Grindrod Shipping Holdings (GRIN) announced that Taylor Maritime Investment Limited made a non-binding indicative proposal to acquire the entire issued and to be issued share capital of the company not already owned by TMI for an aggregate cash consideration of $26 per share.
  2. On September 2, 2022, Hemisphere Media Group (HMTV) received a non-binding proposal from unidentified “Company E” to purchase the company for $7.25 in cash and $1.75 in the form of registered, freely tradeable shares of publicly traded common stock of the combined post-transaction company.
  3. On September 2, 2022, Aurora Innovation’s (AUR) Chief Executive Officer recently laid out a range of options for the self-driving company to respond to worsening market conditions and partners pushing out timelines, including a possible sale to (AAPL) or Microsoft (MSFT).
  4. On September 2, 2022, a consortium led by China’s Hollysys Automation Technologies management plans to take the U.S.-listed automation and control system maker (HOLI) private in a deal that would value the firm at $1.8 billion.

SPAC Arbitrage

Four new SPAC combinations were announced last week, two completed and one terminated. You can find new SPAC IPO announcements in our SPACs tool here.

New Business Combinations

  1. On August 26, 2022, Avanseus Holdings, a technology and software innovator, and Fat Projects Acquisition (FATPentered into a business combination agreement.
  2. On August 30, 2022, Abacus Settlements and Longevity Market Assets, and East Resources Acquisition Corporation (ERESentered into a definitive merger agreement that will result in Abacus becoming a publicly listed company.
  3. On August 30, 2022, Vision Sensing Acquisition Corp. (VSACannounced the execution of a definitive business combination agreement with Newsight Imaging, a semiconductor company that develops proprietary 3D machine vision sensors and spectral vision chips.
  4. On August 31, 2022, Aesther Healthcare Acquisition Corp (AEHAentered into an Agreement and Plan of Merger with Ocean Biomedical, a biopharma company.


  1. On August 29, 2022, Westrock Coffee Company (WESTannounced the closing of its business combination transaction with Riverview Acquisition (RVAC). We discussed Westrock Coffee in our latest Insider Weekends post yesterday after an insider purchase by the Chairman and Co-founder of Westrock.
  2. On August 29, 2022, Software Acquisition Group Inc. III (SWAGannounced the completion of its business combination with Nogin.


  1. On August 29, 2022, North Mountain Merger Corp. (NMMC) and Corcentric mutually agreed to terminate their previously announced agreement and plan of merger, effective immediately.
  2. On August 31, 2022, Ackrell SPAC Partners I Co. (ACKIU) announced that the company received a notice from North Atlantic Imports purporting to unilaterally terminate the Business Combination Agreement.

Merger Arbitrage

Weekly Spread Changes:

The table below shows weekly spread changes between August 26, 2022, and September 2, 2022.

Company Quote
Last Week
Spread Change
SIMO71.18MaxLinear, Inc. (MXL)35.8350.94%39.06%11.88%Cash Plus Stock
SAVE22.09JetBlue Airways Corporation (JBLU)7.6351.65%43.53%8.12%All Cash
TWTR38.63Elon Musk (N/A)40.31%33.96%6.35%All Cash
AXU0.426Hecla Mining Company (HL)3.96.20%0.27%5.93%All Stock
SJR25.88Rogers Communications Inc. (RCI)42.5725.19%20.99%4.20%Special Conditions
RMO0.5909Nikola Corporation (NKLA)5.275.77%7.75%-1.98%All Stock
LOTZ0.3969Shift Technologies, Inc. (SFT)0.816542.39%45.94%-3.55%All Stock
SRLP19.9Hartree Partners, LP (N/A)-4.52%0.16%-4.68%All Cash
BRG26.76Blackstone Real Estate (N/A)11.55%17.71%-6.16%Special Conditions
IS3.84Unity (U)40.7915.68%24.80%-9.12%All Stock

Deal Statistics:

Total Number of Deals Closed in 2022130
Total Number of Deals Not Completed in 20226
Total Number of Pending Deals
Cash Deals55
Stock Deals20
Stock & Cash Deals3
Special Conditions9
Total Number of Pending Deals87
Aggregate Deal Consideration$1.04 trillion

New Deals:

  1. The acquisition of Forma Therapeutics Holdings (FMTX) by Novo Nordisk A/S (NVO) for $414.64 million or $20 per share in cash.

Deal Updates:

  1. On August 29, 2022, Light Street Capital, which manages funds that own more than two percent of the outstanding shares of Zendesk (ZENproposed a superior alternative to the company’s proposed transaction with Hellman & Friedman and Permira and intends to vote against the current transaction. Light Street’s offer at $82.50 per share for shareholders who would like to sell their shares, represents a 6.5% premium to the $77.50 per share contemplated in the proposed transaction.
  2. On August 29, 2022, Global Blood Therapeutics (GBT) announced that the special meeting of stockholders will be on September 30, 2022.
  3. On August 29, 2022, ironSource (IS) announced that the special meeting of stockholders will be on October 3, 2022.
  4. On August 29, 2022,  Twitter (TWTRreceived another notice of purported termination of the Merger Agreement. Twitter responded to that second notice of termination stating that the purported termination set forth in the letter is invalid and wrongful under the Agreement.
  5. On August 30, 2022, Biohaven Pharmaceutical Holding Company (BHVN) announced that the special meeting of stockholders will be on September 29, 2022.
  6. On August 30, 2022, Sierra Wireless (SWIR) announced that the special meeting of stockholders will be on September 27, 2022.
  7. On August 30, 2022, Nikola Corporation (NKLAcommenced an exchange offer to purchase all outstanding shares of Romeo Power (RMO). The Offer will expire on September 26, 2022, and the transaction is expected to be completed during the fourth quarter of 2022.
  8. On August 30, 2022, Alexco Resource’s (AXU) security holders approved the previously announced acquisition of Alexco by Hecla Mining Company (HL). The transaction is expected to be completed on September 7, 2022.
  9. On August 31, 2022, shareholders of Silicon Motion (SIMOapproved the previously announced merger agreement under which MaxLinear (MXL) will acquire Silicon Motion, and approved other proposals related to the transaction.
  10. On August 31, 2022, CynergisTek (CTEK) announced that its stockholders have voted to approve the previously announced merger agreement with Clearwater Compliance.
  11. On August 31, 2022, the State Administration for Market Regulation in the People’s Republic of China advised MaxLinear (MXLto refile for the planned acquisition of Silicon Motion Technology Corporation (SIMO).
  12. On August 31, 2022, Sprague Resources (SRLPentered into an amendment to the agreement and plan of merger with an affiliate of Hartree Partners. The inside date has been extended from July 31, 2022, to November 28, 2022. The date after which either party may terminate the Merger Agreement should the Merger have not closed, has been extended from December 2, 2022, to March 2, 2023. In addition to the previously agreed merger consideration of $19.00 per common unit, the partnership’s unitholders unaffiliated with Hartree will receive an additional $1.00 per common unit in cash as consideration for the amendment to the inside date. The partnership will pay a cash distribution to its unitholders for the calendar quarter ending September 30, 2022, in an amount not less than $0.4338 per common unit, regardless of whether the closing of the merger occurs prior to September 30, 2022.Following execution of the amendment, the partnership expects that the merger will close in the fourth quarter of 2022.
  13. On September 1, 2022, The UK’s Competition and Markets Authority said that it’s concerned that Microsoft’s (MSFT) anticipated purchase of Activision Blizzard (ATVI) could “substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services (game streaming).”
  14. On September 1, 2022, Nielsen Holdings (NLSN) announced that its shareholders have approved the previously announced definitive agreement for Nielsen to be acquired by a private equity consortium composed of Evergreen Coast Capital.
  15. On September 1, 2022, Activision Blizzard (ATVI) CEO Bobby Kotick, sent a letter to all ATVI employees stating that they have entered the second phase of our review in the United Kingdom, and they will continue to fully cooperate with the regulators there, and everywhere approvals are required.
  16. On September 1, 2022, Zendesk (ZEN) announced that its Board of Directors has determined that Light Street Capital Management’s unsolicited, non-binding recapitalization proposal is neither a Superior Proposal nor reasonably likely to lead to a Superior Proposal under the Company’s merger agreement with the consortium led by Hellman & Friedman and Permira.
  17. On September 2, 2022, Alexco Resource (AXUobtained a final order from the Supreme Court of British Columbia approving the previously announced acquisition of Alexco by Hecla Mining Company (HL).
  18. On September 2, 2022, One Medical (ONEM) and Amazon (AMZN) each received a request for additional information and documentary materials from the FTC in connection with the FTC’s review of the Merger. The Second Request is a next step in the regulatory review process.
  19. On September 3, 2022, according to Reuters, the U.S. Federal Trade Commission has begun a review of’s (AMZN) $1.7 billion takeover of robot vacuum maker iRobot (IRBT) to decide if the deal violates antitrust law.

Closed Deals:

  1. The acquisition of Plantronics (POLY) by HP Inc. (HPQ) on August 29, 2022. It took 154 days for this deal to be completed.
  2. The acquisition of AutoWeb (AUTO) by One Planet Group on August 31, 2022. It took 37 days for this deal to be completed.
  3. The acquisition of CynergisTek (CTEK) by Clearwater Compliance on September 1, 2022. It took 101 days for this deal to be completed.

Top 10 deals with the 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.

SAVE07/28/2022JetBlue Airways Corporation (JBLU)$33.50$22.0906/30/202451.65%28.35%
SIMO05/05/2022MaxLinear, Inc. (MXL)$107.44$71.1806/30/202350.94%62.19%
LOTZ08/09/2022Shift Technologies, Inc. (SFT)$0.57$0.396912/31/202242.39%131.12%
TWTR04/25/2022Elon Musk (N/A)$54.20$38.6312/31/202240.31%124.67%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$85.00$66.3606/30/202328.09%34.29%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$25.8809/30/202225.19%353.67%
VMW05/26/2022Broadcom Inc. (AVGO)$142.50$115.6604/30/202323.21%35.59%
ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$77.5306/30/202322.53%27.51%
MITO08/01/2022Stealth Parent Limited (N/A)$0.38$0.315111/30/202220.60%86.41%
TYME07/05/2022Syros Pharmaceuticals, Inc. (SYRS)$0.34$0.284912/31/202218.28%56.55%

List of all pending deals:

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

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.