Merger activity decreased last week with one new deal announced and seven deals completed.
STORE Capital Corporation (STOR)
Founded in 2011 and headquartered in Scottsdale, Arizona, STORE Capital is an internally managed net-lease REIT that acquires, invests, and manages Single Tenant Operational Real Estate. 80% of the company’s acquisitions are accounted for by companies in sale/leaseback transactions. STORE Capital primarily invests in properties that are subject to long-term NNN Leases. In a ‘triple net lease’, the three most common expenses charged back to the tenant or lessee include property taxes, insurance, and maintenance, often called the “three nets”.
Approximately 94% of the company’s portfolio is represented by commercial real estate properties, subject to long-term leases, and 6% is represented by mortgage loans and financing receivables on commercial real estate properties.
Berkshire Hathaway owned 9% of STORE Capital’s stock as of February 2021. The company reduced its ownership in the company from 9% to 5.26% during Q2 2022.
On September 15, 2022, STORE Capital entered into a definitive agreement to be acquired by GIC, a global institutional investor in partnership with Oak Street, a Division of Blue Owl, one of the largest net lease investors, in an all-cash transaction valued at approximately $14 billion. Under the terms of the definitive merger agreement, STORE Capital stockholders will receive $32.25 per share in cash, representing a premium of 20.4% to the company’s closing stock price as of September 14, 2022. Using the mid-point of STORE’s adjusted funds from operations (AFFO) guidance for 2022, GIC and Oak Street are paying 14.27 times AFFO for the company.
The deal is expected to be completed in the first quarter of 2023 and includes a 30-day “go-shop” period that will expire on October 15, 2022. STORE Capital will pay a dividend in the third quarter but will suspend its dividend thereafter. The company’s second quarter dividend was $0.39 per share and the ex-dividend date was June 29, 2022.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.
|Total Number of Deals Closed in 2022||138|
|Total Number of Deals Not Completed in 2022||5|
|Total Number of Pending Deals|
|Stock & Cash Deals||3|
|Total Number of Pending Deals||84|
|Aggregate Deal Consideration||$1.07 trillion|
- The acquisition of STORE Capital Corporation (STOR) by GIC and Oak Street for $14 billion or $32.25 per share in cash.
- Höegh LNG Partners (HMLP) and Höegh LNG Holdings anticipate that the merger will close on or about September 23, 2022.
- On September 13, 2022, AppLovin (APP) said that it doesn’t intend to submit another proposal to combine with Unity Software (U) and has withdrawn its initial proposal from August 9, 2022.
- USA Truck (USAK) – received stockholders approval (Press Release)
- Twitter (TWTR) – received stockholders approval (Press Release)
- CatchMark Timber Trust (CTT) – received stockholders approval (Press Release)
- Hailiang Education Group (HLG) – received stockholders approval (Press Release)
- Allegiance Bancshares (ABTX) – approval from The Federal Reserve Board (Press Release)
- Tyme Technologies (TYME) – received stockholders approval (Press Release)
- On September 12, 2022, The Securities and Exchange Commission charged VMware (VMW) for misleading investors about its order backlog management practices. VMware reached a settlement with the SEC to resolve the investigation by agreeing to pay a civil monetary penalty of $8 million.
- On September 14, 2022, Turquoise Hill Resources (TRQ) announced that a federal court in New York has dismissed all claims made against the company and three of its current or former executives in a putative class action, backed by Pentwater Capital Management.
- September 15, 2022: According to Reuters, Microsoft’s (MSFT) deal to buy Activision Blizzard (ATVI) is expected to face an in-depth UK probe after the software maker did not offer any remedies to assuage competition concerns.
- On September 15, 2022, Merrion Investment Management Company, a long-term owner of Avalara (AVLR) announced its opposition to the purchase of Avalara by Vista Equity Partners.
- In mid-August, the ISU under the NSIA (National Security and Investment Act) issued a call-in notice to F-star Therapeutics (FSTX) and invoX Pharma, resulting in an additional review period of thirty working days, which may be further extended. CFIUS informed F-star Therapeutics that its review of the transaction will continue for an additional forty-five calendar days, which may be further extended. The companies extended the offer expiration date to November 1, 2022, in order to allow additional time to obtain required regulatory approvals.
- On September 16, 2022, Pentwater Capital Management increased its stake in Turquoise Hill Resources (TRQ) to 13.77%.
- On September 16, 2022, Senator Elizabeth Warren urged federal airline regulators to block JetBlue Airways’s (JBLU) proposed merger with Spirit Airlines (SAVE) by invoking a rarely used authority from the 1950s to argue that the deal isn’t “consistent with the public interest.”
Shareholders Meeting Schedule
- Avalara (AVLR) – October 14, 2022
- Zendesk (ZEN) – September 19, 2022
- Spirit Airlines (SAVE) – October 19, 2022
- ChemoCentryx (CCXI) – October 18, 2022
- Zymergen (ZY) – October 17, 2022
- Ping Identity Holding (PING) – October 17, 2022
- The acquisition of Mandiant (MNDT) by Alphabet (GOOG) on September 12, 2022. It took 188 days for this deal to be completed.
- The acquisition of Hemisphere Media Group (HMTV) by Gato Investments on September 13, 2022. It took 127 days for this deal to be completed.
- The acquisition of ManTech International Corporation (MANT) by The Carlyle Group (CG) on September 14, 2022. It took 121 days for this deal to be completed.
- The acquisition of USA Truck (USAK) by DB Schenker on September 15, 2022. It took 83 days for this deal to be completed.
- The acquisition of CatchMark Timber Trust (CTT) by PotlatchDeltic Corporation (PCH) on September 15, 2022. It took 107 days for this deal to be completed.
- The acquisition of Hailiang Education Group (HLG) by Hailiang Education International Limited on September 15, 2022. It took 129 days for this deal to be completed.
- The acquisition of Tyme Technologies (TYME) by Syros Pharmaceuticals (SYRS) on September 16, 2022. It took 73 days for this deal to be completed.
Weekly Spread Changes:
The table below shows weekly spread changes between September 9, 2022, and September 16, 2022.
|RMO||0.5301||Nikola Corporation (NKLA)||5.12||14.55%||2.03%||12.52%||All Stock|
|FSTX||5.97||invoX Pharma (N/A)||19.26%||9.71%||9.55%||All Cash|
|SIMO||69.96||MaxLinear, Inc. (MXL)||34.53||52.86%||46.39%||6.47%||Cash Plus Stock|
|VMW||112.44||Broadcom Inc. (AVGO)||502.5||26.73%||20.64%||6.09%||Special Conditions|
|ATVI||76.02||Microsoft Corporation (MSFT)||244.74||24.97%||21.00%||3.97%||All Cash|
|ELSE||5.65||Mobile X Global, Inc. (N/A)||-14.51%||-12.18%||-2.33%||All Cash|
|EXTN||4.7||Enerflex Ltd. (EFX.TO)||6.43||5.34%||7.97%||-2.63%||All Stock|
|IS||3.79||Unity (U)||35.54||2.12%||9.43%||-7.31%||All Stock|
|EMCF||36.5||Farmers National Banc Corp. (FMNB)||13.95||-17.83%||-8.73%||-9.10%||All Stock|
|LOTZ||0.3805||Shift Technologies, Inc. (SFT)||0.7425||35.07%||47.18%||-12.11%||All Stock|
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.
|SIMO||05/05/2022||MaxLinear, Inc. (MXL)||$106.94||$69.96||06/30/2023||52.86%||67.69%|
|SAVE||07/28/2022||JetBlue Airways Corporation (JBLU)||$33.50||$22.64||06/30/2024||47.97%||26.89%|
|LOTZ||08/09/2022||Shift Technologies, Inc. (SFT)||$0.51||$0.3805||12/31/2022||35.07%||123.07%|
|TWTR||04/25/2022||Elon Musk (N/A)||$54.20||$41.45||12/31/2022||30.76%||107.96%|
|VMW||05/26/2022||Broadcom Inc. (AVGO)||$142.50||$112.44||04/30/2023||26.73%||43.56%|
|BKI||05/04/2022||Intercontinental Exchange, Inc. (ICE)||$85.00||$67.29||06/30/2023||26.32%||33.71%|
|ATVI||01/18/2022||Microsoft Corporation (MSFT)||$95.00||$76.02||06/30/2023||24.97%||31.98%|
|SJR||03/15/2021||Rogers Communications Inc. (RCI)||$30.54||$25.42||09/30/2022||20.14%||612.45%|
|MITO||08/01/2022||Stealth Parent Limited (N/A)||$0.38||$0.3164||11/30/2022||20.10%||100.51%|
|FSTX||06/23/2022||invoX Pharma (N/A)||$7.12||$5.97||12/31/2022||19.26%||67.61%|
Deals In The Works
Last week, two new potential deals were added to the ‘Deals In The Works‘ section.
- On September 15, 2022, Tenax Therapeutics (TENX) announced that it is evaluating alternative strategic paths focused on maximizing shareholder value.
- On September 15, 2022, Republic First Bancorp (FRBK) announced that it is initiating a strategic review in light of inquiries by multiple parties expressing interest in one or more potential strategic transactions with the company.
- On September 12, 2022, Zendesk (ZEN) issued a statement reiterating its support for the proposed acquisition of Zendesk by a consortium led by Hellman & Friedman and Permira and expressing its views in response to a letter from Light Street Capital Management to the Zendesk Board of Directors related to the Consortium transaction.
- On September 15, 2022, NCR Corp. (NCR) ended the sale process and announced a spinoff to split into two companies.
There were seven new SPAC combinations announced last week. You can find new SPAC IPO announcements in our SPACs tool here.
New Business Combinations
- On September 9, 2022, Nature’s Miracle and Lakeshore Acquisition II Corp. (LBBB) entered into a definitive business combination agreement.
- On September 12, 2022, Great Southern Homes entered into a definitive merger agreement with DiamondHead Holdings (DHHC).
- On September 12, 2022, Rana Financial, Mobitech International (Afinoz), and Fintech Ecosystem Development (FEXD) announced definitive agreements for business combinations.
- On September 12, 2022, Alset Capital Acquisition Corp. (ACAX) announced the execution of an agreement and plan of merger with HWH International.
- On September 14, 2022, Apollomics, a late-stage clinical biopharmaceutical company, and Maxpro Capital Acquisition (JMAC) announced a definitive agreement for a business combination.
- On September 15, 2022, TPB Acquisition Corporation I (TPBA) and Lavoro Limited announced that they have entered into a definitive business combination agreement.
- On September 16, 2022, Intuitive Machines a space exploration, infrastructure, and services company and Inflection Point Acquisition (IPAX) signed a definitive business combination agreement.
- CleanTech Acquisition (CLAQ) announced the successful closing of its business combination on September 9, 2022 with Nauticus Robotics.
- Amprius Technologies (AMPX) announced that it has completed its business combination with Kensington Capital Acquisition Corp. IV.
- FOXO Technologies (FOXO) announced the completion of its business combination with Delwinds Insurance Acquisition (DWIN).
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.