InsideArbitrage Event Driven Monitor – December 7, 2022

  • December 7, 2022

Quick updates on the event-driven strategies we follow on InsideArbitrage. Includes insider buying in a recent spin-off and a company that decided to issue a press release calling attention to purchases by its CEO and CFO.

Merger Arbitrage

  1. Vivint Smart Home (VVNT) to be acquired by NRG Energy (NRG) for $5.96 billion or $12 per share in cash.
  2. DigitalBridge Group (DBRG) completes the acquisition of Switch (SWCH).
  3. STORE Capital Corporation (STOR) announced that the Committee on Foreign Investment in the United States (CFIUS) has approved the previously announced all-cash acquisition of the company by affiliates of GIC.
  4. Bloomberg reported that Kroger’s (KR) acquisition of Albertsons (ACI) will face an in-depth review by the Federal Trade Commission, after the US regulator sent a so-called second request seeking additional information on the deal.

Deals in the Works

  1. Vince Holding Corp., (VNCE) a New York-based fashion brand, is exploring options including a sale, according to people with knowledge of the matter.

Update

  1. Fox Corporation (FOXA): The Special Committee has been delegated full authority to evaluate the Potential Transaction. The letters indicated that Murdoch and the Murdoch Family Trust will not vote in favor of a transaction unless it is both recommended by the Special Committee and approved by a majority vote of the shares held by non-affiliated stockholders entitled to vote.

Insider Purchases

  1. Richard F. Wallman, a Director of diagnostics & research company Charles River Laboratories International, Inc. (CRL), purchased 1,500 shares at an average price of $218.90 totaling $328,350.
  2. Jeffrey Gould, the President and CEO of multifamily REIT BRT Apartments Corp. (BRT), purchased 14,310 shares at an average price of $19.95 totaling $285,442.
  3. Henrik Fisker, the President & CEO of electric car company Fisker Inc. (FSR), purchased 33,700 shares at an average price of $7.42 totaling $249,976. This purchase was a joint purchase with Mr. Fisker’s spouse, who is the CFO of the company. Oddly enough they decided to issue a press release calling attention to this insider purchase. Two other insiders also purchased shares.
  4. Christopher O. Blunt, the President & CEO of life insurance and annuities company F&G Annuities & Life, Inc. (FG), purchased 13,000 shares at an average price of $19.16 totaling $249,119. F&G was spun out of Fidelity National Financial (FNF) on December 1, 2022.
  5. Robert D. Dixon, a Director of specialty industrial machinery company Generac Holdings, Inc. (GNRC), purchased 2,000 shares at an average price of $97.27 totaling $194,550.
  6. Todd J. Stein, a Director of healthcare communications company Spok Holdings, Inc (SPOK), purchased 15,819 shares at an average price of $7.88 totaling $124,583. Michael W. Wallace, the Chief Operating Officer of the company, also purchased 2,000 shares at an average price of $7.76 totaling $15,520.
  7. Kelly A. Romano, a Director of biotechnology company Athira Pharma, Inc. (ATHA), purchased 30,000 shares at an average price of $3.29 totaling $98,700.
  8. Thomas L. Beaudoin, the EVP, CFO of automotive software company Cerence Inc. (CRNC), purchased 5,000 shares at an average price of $18.80 totaling $94,025.
  9. Charles N. Reeves, the Chief Executive Officer of regional bank MidWestOne Financial Group, Inc. (MOFG), purchased 2,659 shares at an average price of $33.76 totaling $89,761.
  10. David B. Jones, the SVP, GC & CCO of specialty chemicals company Innospec, Inc. (IOSP), purchased 752 shares at an average price of $107.99 totaling $81,208.
  11. Pamela R. Butcher, a Director of oil & gas company PDC Energy, Inc. (PDCE), purchased 1,000 shares at an average price of $68.28 totaling $68,280.
  12. Murray Stahl, a Director of Texas landowner Texas Pacific Land Corp (TPL), purchased 21 shares at an average price of $2,626.43 totaling $55,155.
  13. Marshall Lux, a Director of regional bank New York Community Bancorp, Inc. (NYCB), purchased 6,000 shares at an average price of $8.53 totaling $51,180.
  14. Charles L. Frischer, a Director of holding company Kingsway Financial Services, Inc. (KFS), purchased 7,000 shares at an average price of $7.22 totaling $50,550.
  15. Heather Stark, the Interim Principal Financial Officer of weight management company WW International, Inc. (WW), purchased 10,000 shares at an average price of $3.85 totaling $38,500.
  16. Julien G. Patterson, a Director of regional bank Blue Ridge Bankshares, Inc. (BRBS), purchased 2,000 shares at an average price of $12.73 totaling $25,464.

Spinoffs

  1. Madison Square Garden Entertainment Corp. (MSGE) announced that its board of directors has approved a revised plan for the proposed separation of the Company’s businesses. The Company is now exploring a potential spin-off of its traditional live entertainment business, which includes a diverse collection of performance venues, entertainment and sports bookings and the Christmas Spectacular production.

SPACs

  1. X Energy Reactor Company and Ares Acquisition Corporation (AAC) entered into a definitive business combination agreement.
  2. Infrared Cameras Holdings, Inc. and SportsMap Tech Acquisition Corp. (SMAP)  announced the signing of a definitive agreement for a business combination.
  3. Tigo Energy and Roth CH Acquisition IV Co. (ROCG) announced the signing of a definitive agreement for a business combination.
  4. Intrinsic Medicine, Inc. and Phoenix Biotech Acquisition Corp. (PBAX) announced the mutual termination of their previously announced business combination agreement due to current market conditions.

Stock Buyback Announcements

  1. Mastercard Incorporated (MA) approved a new $9 billion share repurchase program, effective at the completion of the company’s previously announced $8 billion program. This represents 2.7% of its market cap at announcement. As of December 1, 2022, the company had approximately $4.1 billion remaining under the current approved share repurchase program.
  2. Morningstar, Inc. (MORN) announced that its Board of Directors approved a new three-year $500 million share repurchase program, effective Jan. 1, 2023. This new repurchase program will replace the existing January 2021 program and represents 5% of its market cap at announcement.
  3. CareDx, Inc (CDNA) has authorized a common stock repurchase program of up to $50 million of shares over a period of up to 24 months. This represents around 7% of its market cap at announcement.
  4. Trustmark Corporation (TRMK) has authorized a new $50 million stock repurchase program through December 31, 2023. This represents 2.4% of its market cap at announcement.
  5. IES Holdings, Inc. (IESC) has replaced the existing share repurchase program with a new $40 million share repurchase authorization, representing around 5.4% of its market cap at announcement.
  6. Midland States Bancorp, Inc. (MSBI) has approved a new $25 million stock repurchase program, effective on January 1, 2023 and expires on December 31, 2023. This represents 4.2% of its market cap at announcement.

Updates:

  1. AutoZone, Inc. (AZO) repurchased 392 thousand shares of its common stock for $900.0 million at an average price of $2,295 per share, during the first quarter ended Nov 19, 2022.
  2. Ferguson plc (FERG) has a net debt of $3.2 billion as of October 31, 2022 and during the quarter it completed share repurchases of $366 million, leaving approximately $0.6 billion remaining under its current share repurchase program.
  3. The OLB Group (OLB) has initiated purchase of shares in the open market under the previously announced share repurchase program of up to 1M shares of its outstanding shares of common stock.

C-Suite Transitions

Appointment

  1. Invivyd (IVVD): appoints Jeremy Gowler  as the Company’s Chief Operating Officer and Chief Commercial Officer, effective as of December 16, 2022.
  2. CURO Group Holdings (CURO): appoints Ismail Dawood as Chief Financial Officer, effective January 3, 2023.
  3. Greenlane Holdings (GNLN) has appointed Lana Reeve as its new Chief Financial Officer and Chief Legal Officer.
  4. Karuna Therapeutics (KRTX) appoints Bill Meury as Chief Executive Officer and President
  5. DigitalOcean Holdings (DOCN), announced the appointment of Aaqib Gadit as Chief Revenue Officer

Departures

  1. Pulse Biosciences (PLSE): Sandra Gardiner, the Chief Financial Officer resigns.
  2. Brinker International (EAT): Charlie Lousignont, Senior Vice President and Chief Supply Chain Officer will depart on or before April 2, 2023.
  3. Universal Display Corporation (OLED): announces Sherwin I. Seligsohn, Company Founder, Director, and Chairman Emeritus passed away on December 3, 2022
  4. PARTS iD (ID): Kailas Agrawal, Chief Financial Officer, will retire, effective December 31, 2022.

 

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