InsideArbitrage Event Driven Monitor – December 8, 2022

  • December 8, 2022

Quick updates on the event-driven strategies we follow on InsideArbitrage.

Merger Arbitrage

  1. Shareholders of CarLotz (LOTZ) approved the company’s merger with Shift Technologies (SFT) at a special meeting of shareholders.
  2. LHC Group (LHCG) delivered written notice to UnitedHealth Group extending the Outside Date to March 28, 2023. The companies certified to the FTC their substantial compliance with their respective Second Requests. The deal is expected to be completed in the first quarter of 2023.
  3. UserTesting (USER) announced that the special meeting of stockholders will be on January 10, 2023.
  4.  Benefitfocus (BNFT) and Voya Financial (VOYA) filed their preliminary proxy statement. The waiting period under the HSR Act is expected expire on December 14, 2022, unless earlier terminated or extended by a request for additional information and documentary material from the DOJ or FTC.
  5. Bloomberg reported that Microsoft (MSFT) executives are set to meet with US Federal Trade Commission Chair Lina Khan and other commissioners on Wednesday to make its final case in favor of its deal to buy Activision Blizzard (ATVI).

Deals in the Works

Update

  1. Titan Medical Inc. (TMDI), announced that in view of the commencement of the strategic review process announced on November 30, 2022, the special meeting of its shareholders scheduled for January 12, 2023 will be suspended and, if appropriate and necessary, rescheduled to a future date.

Insider Purchases

  1. Matthew Jacobson, a Director of cloud software company Datadog, Inc. (DDOG), purchased 192,154 shares at an average price of $69.35 totaling $13.33 million. These shares were purchased indirectly through ICONIQ Strategic Partners.
  2. Sameer K. Gandhi, a Director of cloud software company Freshworks Inc. (FRSH), purchased 885,000 shares at an average price of $14.04 totaling $12.42 million. These shares were purchased indirectly through the venture capital firm Accel, which has been involved in funding the company since its series A round in 2011.
  3. Christopher Shackelton, a Director of RV dealership Lazydays Holdings, Inc. (LAZY), purchased 186,822 shares at an average price of $13.45 totaling $2.51 million. These shares were acquired indirectly through Coliseum Capital Management.
  4. Antonio del Valle Perochena, a Director of regional bank Byline Bancorp, Inc. (BY), purchased 43,478 shares at an average price of $22.52 totaling $979,055.
  5. Michael L. Hollis, the President of oil & gas E&P company HighPeak Energy, Inc. (HPK), purchased 31,825 shares at an average price of $21.98 totaling $699,477.
  6. Jay Farner, the Chief Executive Officer of mortgage originator Rocket Companies, Inc. (RKT), purchased 72,000 shares at an average price of $8.33 totaling $599,541. Matthew Rizik, a Director of the company, also purchased 7,800 shares at an average price of $8.32 totaling $64,908.
  7. Raymond B. Ruddy, a Director of specialty business services company Maximus, Inc. (MMS), purchased 5,730 shares at an average price of $69.91 totaling $400,584.
  8. Ock Hee Kim, a Director of regional bank OP Bancorp (OPBK), purchased 30,325 shares at an average price of $11.77 totaling $356,882.
  9. Daniel William Fisher, the President & C.E.O. of packaging & containers company BALL Corp (BALL), purchased 6,400 shares at an average price of $54.42 totaling $348,317.
  10. Richard D. Feintuch, a Director of building products & equipment company PGT Innovations, Inc. (PGTI), purchased 10,000 shares at an average price of $18.18 totaling $181,750.
  11. Victor Herrero, a Director of apparel manufacturing company G-III Apparel Group, LTD. (GIII), purchased 10,270 shares at an average price of $12.20 totaling $125,294.
  12. Victor J. Coleman, the Chief Executive Officer of office REIT Hudson Pacific Properties, Inc. (HPP), purchased 9,300 shares at an average price of $10.63 totaling $98,859.
  13. John S. Bolton, a Director of aerospace company Redwire Corp (RDW), purchased 43,839 shares at an average price of $2.01 totaling $88,116.
  14. Timothy M. Adams, the Chief Financial Officer of security software company Rapid7, Inc. (RPD), purchased 2,500 shares at an average price of $30.00 totaling $75,000.
  15. Richard A. Lechleiter, a Director of regional bank Stock Yards Bancorp, Inc. (SYBT), purchased 906 shares at an average price of $71.39 totaling $64,679.
  16. Murray Stahl, a Director of Texas landowner Texas Pacific Land Corp (TPL), purchased 21 shares at an average price of $2,531.50 totaling $53,161.
  17. Jason Philip Dinapoli, a Director of regional bank Heritage Commerce, Corp. (HTBK), purchased 3,052 shares at an average price of $13.64 totaling $41,630.
  18. James E. Sweetnam, a Director of building products & equipment company Aspen Aerogels, Inc. (ASPN), purchased 2,700 shares at an average price of $11.30 totaling $30,510.
  19. Alan Yu, the CEO and Chairman of the BOD of packaging & containers company Karat Packaging Inc. (KRT), purchased 1,800 shares at an average price of $14.09 totaling $25,356.

Spinoffs

  1. BorgWarner (BWA), announced its intention to execute a tax-free spin-off of its Fuel Systems and Aftermarket segments into a separate, publicly traded company (“NewCo”).
  2. Vale (VALE) According to Bloomberg, the firm will separate the base metal assets from its iron ore operations and unveil a strategic partner in the first half of next year, Chief Executive Officer Eduardo Bartolomeo and Chief Financial Officer Gustavo Pimenta said

SPACs

  1. MNG Airlines entered into a definitive agreement to become publicly traded via a business combination with Golden Falcon Acquisition Corp. (GFX).
  2. EDOC Acquisition Corp. (ADOC) and Australian Oilseeds Investments Pty Ltd., an Australian proprietary company entered into a definitive Business Combination Agreement.
  3. AlphaTime Acquisition Corp filed for a $60 million IPO.

Stock Buyback Announcements

  1. Lowe’s Companies, Inc. (LOW) announced that its Board of Directors has authorized a new $15 billion common stock repurchase program. This represents around 12% of its market cap at announcement.
  2. State Street Corporation (STT) announced an increase of up to $500 million to its previously announced fourth-quarter share repurchase of $1 billion. This represents around 2% of its market cap at announcement.
  3. NEXGEL, Inc. (NXGL) has approved a share repurchase program, effective immediately, with authorization to purchase up to $500,000 of the Company’s common shares. This represents around 6.6% of its market cap at announcement.

Updates:

  1. Perma-Pipe International Holdings, Inc. (PPIH) has authorized the use of $965 thousand remaining under the share repurchase program previously approved on October 4, 2021 that expired on October 3, 2022.
  2. During the first quarter of fiscal 2023, THOR Industries (THO) repurchased $25.4 million of common stock, bringing the total amount repurchased since the December 2021 authorization to $190.5 million.
  3. Academy Sports & Outdoors, Inc. (ASO) has repurchased 10 million shares for $389.4 million year-to-date and has approximately $400 million remaining under its share repurchase program.
  4. Ollie’s Bargain Outlet Holdings, Inc. (OLLI) invested $20 million of cash to repurchase 364,320 shares of its common stock during the third quarter of fiscal 2022. The Company had $150 million remaining under its share repurchase authorization.
  5. United Natural Foods, Inc. (UNFI) repurchased approximately 339,000 shares at an average price of $35.85 for an aggregate cost of approximately $12 million, during the first quarter of fiscal 2023.

C-Suite Transitions

Appointments

  1. Genuine Parts Co. (GPC): appointed William P. Stengel to the position of President and Chief Operating Officer and Christopher T. Galla to the position of Senior Vice President and General Counsel, each effective as of January 1, 2023.
  2. Nordstrom (JWN): Michael Maher, Chief Accounting Officer, was appointed Interim Chief Financial Officer and Treasurer.
  3. Custom Truck One Source (CTOS): appoints Ryan McMonagle as Chief Executive Officer, effective March 20, 2023.
  4. Nature’s Sunshine Products (NATR): appoints Shane Jones as the company’s Executive Vice President, Chief Financial Officer effective December 30, 2022.
  5. PBF Energy (PBF): Karen Davis will become Chief Financial Officer on an interim basis early next year
  6. SPX Technologies (SPXC) announced the appointment of Mark A. Carano as Vice President, Chief Financial Officer and Treasurer, effective January 3, 2023.

Departures

  1. Custom Truck One Source (CTOS): Fred Ross, Chief Executive Officer, notified the Board that he would be retiring as Chief Executive Officer, effective March 20, 2023.
  2. Duckhorn Portfolio (NAPA): Lori Beaudoin notified the company of her intention to retire from her position as Chief Financial Officer effective upon the appointment of her successor.
  3. Esports Entertainment Group (GMBL): announced the departure of Grant Johnson from his position as Chairman and Chief Executive Officer.

 

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