Merger Arbitrage Mondays – U.S. M&A 2022 Highlights

  • January 2, 2023

Merger activity came to a halt last week with no new deals announced. Five active deals were completed successfully last week.

Here is a snapshot of the M&A 2022 highlights that we covered in our first newsletter titled,  ‘InsideArbitrage Special Situations Newsletter: January 2023

US M&A Highlights 2022

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.

Merger Arbitrage

Deal Statistics:

Total Number of Pending Deals
Cash Deals43
Stock Deals14
Stock & Cash Deals3
Special Conditions12
Total Number of Pending Deals72
Aggregate Deal Consideration$436.42 billion

Deal Updates:

  1. Seacoast (SBCF) and Professional (PFHD) announced that the mergers are expected to be completed on January 31, 2023.
  2. On December 28, 2022, The New Jerzey PUC disclosed correspondence from Infrastructure Investments Fund’s advisors to the PUC Commissioner suggesting next steps for its review of IIF’s proposed acquisition of South Jersey Industries (SJI).
  3. On December 29, 2022, Apollo Endosurgery (APEN) and Boston Scientific (BSX) stated in their preliminary proxy statement that they filed notification and report forms under the HSR Act with the DOJ and the FTC on December 20, 2022.
  4. December 30, 2022: According to Reuters, a judge has set January 3, 2023, for the first pre-trial hearing in the Biden administration’s case against Microsoft (MSFT) over its bid to take over Activision Blizzard (ATVI).
  5. On December 30, 2022, Horizon Therapeutics Public Limited Company (HZNP) and Amgen (AMGN), each filed a notification and report form with respect to the transaction with the DOJ and the FTC under the HSR Act on December 29, 2022. The waiting period under the HSR Act is scheduled to expire on January 30, 2023, unless extended or earlier terminated.

Approvals

  1. Poshmark (POSH) received shareholders approval
  2. Brigham Minerals (MNRL) received shareholders approval
  3. The United Kingdom Competition and Markets Authority provided notice to UserTesting (USER) that it has no further questions on the merger at this time. The merger is expected to close in the first half of 2023.
  4. On December 28, 2022, Resolute Forest Products (RFP) and The Paper Excellence Group jointly announced that the Canadian Commissioner of Competition has entered into a consent agreement regarding the parties’ business combination. The transaction remains on course to close in the first half of 2023.
  5. On December 29, 2022, Brookline Bancorp (BRKL) announced that it has received the requisite regulatory approvals from the Board of Governors of the Federal Reserve System, New York State Department of Financial Services and Massachusetts Board of Bank Incorporation necessary to complete its acquisition of PCSB Financial Corporation (PCSB). Brookline and PCSB anticipate closing the transaction on January 1, 2023.
  6. December 29, 2022: According to Bloomberg, Canada’s merger court ruled in favor of Rogers Communications (RCI) and Shaw Communications (SJR) in an antitrust case, clearing one of the final hurdles to the union of two of the country’s largest telecommunications firms.
  7. On December 29, 2022, The FNE (Fiscalía Nacional Económica) Chile approved in Phase 1 the merger operation consisting of the acquisition of control of Activision Blizzard (ATVI) by Microsoft Corporation (MSFT), after ruling out that it is apt to substantially reduce competition.

Hurdles

  1. On December 29, 2022, The Committee on Foreign Investment in the United States issued an order preventing the consummation of the transactions pursuant to the merger agreement between F-star Therapeutics (FSTX) and invoX Pharma, citing unresolved national security risks. invoX has extended the tender offer to December 30, 2022.
  2. On December 30, 2022, F-star Therapeutics (FSTX) and invoX Pharma extended the tender offer to January 17, 2023, unless further extended. In order to give the parties additional time to review the draft National Security Agreement and to continue discussions with CFIUS, the End Date of the Merger Agreement has been extended to January 31, 2023.
  3. December 30, 2022: Canada’s antitrust regulator plans to appeal a decision by a Canadian court that allowed a proposed merger between Rogers Communications (RCI) and Shaw Communications (SJR) to proceed. The Competition Bureau has filed a notice to appeal the decision with a Canadian appellate court. The companies reported that they remain committed to pro-competitive transactions.

Closed Deals:

  1. The acquisition of Hill International (HIL) by Global Infrastructure Solutions on December 27, 2022. It took 133 days for this deal to be completed.
  2. The acquisition of Archaea Energy (LFG) by BP p.l.c. (BP) on December 28, 2022. It took 72 days for this deal to be completed.
  3. The acquisition of Brigham Minerals (MNRL) by Sitio Royalties (STR) on December 29, 2022. It took 114 days for this deal to be completed.
  4. The acquisition of Emclaire Financial (EMCF) by Farmers National Banc Corp. (FMNB) on December 30, 2022. It took 281 days for this deal to be completed.
  5. The acquisition of PCSB Financial Corporation (PCSB) by Brookline Bancorp (BRKL) on December 30, 2022. It took 220 days for this deal to be completed.

Weekly Spread Changes:

The table below shows weekly spread changes between December 23, 2022, and December 30, 2022.

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
GRIN18.71Taylor Maritime Investments Limited and Good Falkirk Limited (N/A)12.24%8.98%3.26%Special Conditions
ACI20.74The Kroger Co. (KR)44.5831.39%28.96%2.43%Special Conditions
TSEM43.2Intel Corporation (INTC)26.4322.69%20.67%2.02%All Cash
GSMG1.46Cheers Inc (N/A)6.16%4.73%1.43%All Cash
SAVE19.48JetBlue Airways Corporation (JBLU)6.4859.14%57.92%1.22%All Cash
SPNE8.35Orthofix (OFIX)20.532.35%8.07%-5.72%All Stock
ISO1.55Berkeley Lights (BLI)2.685.82%12.26%-6.44%All Stock
SIMO64.99MaxLinear, Inc. (MXL)33.9564.20%71.03%-6.83%Cash Plus Stock
SJR28.78Rogers Communications Inc. (RCI)46.843.86%13.33%-9.47%Special Conditions
FSTX6.32invoX Pharma (N/A)12.66%31.12%-18.46%All Cash

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.

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
SIMO05/05/2022MaxLinear, Inc. (MXL)$106.71$64.9906/30/202364.20%130.18%
SAVE07/28/2022JetBlue Airways Corporation (JBLU)$31.00$19.4806/30/202459.14%39.53%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$85.00$61.7505/04/202337.65%111.73%
ACI10/14/2022The Kroger Co. (KR)$27.25$20.7403/31/202431.39%25.18%
IRBT08/05/2022Amazon (AMZN)$61.00$48.1312/31/202226.74%-9760.13%
ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$76.5506/30/202324.10%48.87%
TSEM02/15/2022Intel Corporation (INTC)$53.00$43.202/15/202322.69%184.00%
VMW05/26/2022Broadcom Inc. (AVGO)$142.50$122.7604/30/202316.08%49.32%
TGNA02/22/2022Standard General L.P. (N/A)$24.00$21.1912/31/202213.26%-4840.25%
FSTX06/23/2022invoX Pharma (N/A)$7.12$6.3201/31/202312.66%154.01%

Deals In The Works

Two new potential deals were added to the ‘Deals In The Works‘ section last week.

  1. On December 29, 2022, Hale J. Hoak, on behalf of Hoak & Co, sent a letter to the Board of Directors of Natural Gas Services Group (NGS) to cease any search process for a new chief executive officer and to commence a review of strategic alternatives.
  2. On December 30, 2022, Swvl Holdings Corp (SWVL), a global provider of transformative tech-enabled mass transit solutions, announced the formation of a special committee comprised of independent directors of the Company’s Board of Directors to explore and evaluate potential strategic alternatives that may be available to the company.

Updates

  1. On December 27, 2022, PolarityTE (PTE), announced that it signed a non-binding letter of intent with Michael Brauser for him to make an offer to acquire 100% of the outstanding equity interests of the company at a proposed offering price of $1.03 per common share, which would be paid entirely in cash.

SPAC Arbitrage

SPAC IPO

  1. On December 30, 2022, AlphaTime Acquisition Corp (ATMCU) announced the pricing of its $60 million initial public offering.

SPAC Business Combination

  1. On December 29, 2022, Prime Number Acquisition I Corp. (PNACentered into a business combination with Noco-Noco.

Terminated

  1. On December 27, 2022, SPK Acquisition  (SPKterminated its Merger Agreement With Varian Biopharmaceuticals.

List of all pending deals:

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

TargetAnnounced
Date
AcquirerDeal
Type
Closing
Value
Deal
Price
Last
Price
Target VolumeEstimated
Closing Date
ReturnAnnualized
Return
+SIMO5/05/22MaxLinear, Inc. (MXL)Cash Plus Stock$8 B$106.71$64.99289,7426/30/2364.20%130.91%
+SAVE7/28/22JetBlue Airways Corporation (JBLU)All Cash$7.6 B$31.00$19.48497,1376/30/2459.14%39.61%
+BKI5/04/22Intercontinental Exchange, Inc. (ICE)Special Conditions$16 B$85.00$61.75415,3955/04/2337.65%112.65%
+ACI10/14/22The Kroger Co. (KR)Special Conditions$24.6 B$27.25$20.742,640,1223/31/2431.39%25.24%
+IRBT8/05/22Amazon (AMZN)All Cash$1.7 B$61.00$48.13237,29812/31/2226.74%0.00%
+ATVI1/18/22Microsoft Corporation (MSFT)All Cash$68.7 B$95.00$76.552,708,8216/30/2324.10%49.15%
+TSEM2/15/22Intel Corporation (INTC)All Cash$5.4 B$53.00$43.2443,9312/15/2322.69%188.18%
+VMW5/26/22Broadcom Inc. (AVGO)Special Conditions$69 B$142.50$122.76553,4094/30/2316.08%49.74%
+TGNA2/22/22Standard General L.P. (N/A)Special Conditions$8.6 B$24.00$21.19813,52612/31/2213.26%0.00%
+FSTX6/23/22invoX Pharma (N/A)All Cash$161 M$7.12$6.324,160,1961/31/2312.66%159.32%
+FCRD10/04/22Crescent Capital BDC, Inc. (CCAP)Special Conditions$145.6 M$4.79$4.2678,2583/31/2312.44%51.60%
+GRIN10/12/22Taylor Maritime Investments Limited and Good Falkirk Limited (N/A)Special Conditions$506 M$21.00$18.7183,4093/31/2312.24%50.77%
+OIIM9/30/22FNOF Precious Honour Limited and Rim Peak Technology Limited (N/A)All Cash$73.94 M$5.00$4.4741,6623/31/2311.86%49.18%
+IAA11/07/22Ritchie Bros. Auctioneers Incorporated (RBA)Cash Plus Stock$7.3 B$43.56$40641,1886/30/238.91%18.17%
+HVBC10/19/22Citizens Financial Services, Inc. (CZFS)All Stock$67.4 M$30.69$28.442,8876/30/237.90%16.12%
+ONEM7/21/22Amazon (AMZN)All Cash$3.9 B$18.00$16.711,623,94512/31/227.72%0.00%
+CIH12/22/22CIH Holdings Limited (N/A)All Cash$26.68 M$1.00$0.929568,9893/31/237.58%31.46%
+SWIR8/02/22Semtech Corporation (SMTC)All Cash$1.2 B$31.00$28.99209,3791/31/236.93%87.27%
+ELSE6/13/22Mobile X Global, Inc. (N/A)All Cash$9.89 M$4.83$4.521,7796/30/236.86%13.99%
+ELVT11/16/22Park Cities Asset Management LLC (N/A)All Cash$67 M$1.87$1.7570,8353/31/236.86%28.44%
+SGFY9/05/22CVS Health Corporation (CVS)All Cash$8 B$30.50$28.66882,1706/30/236.42%13.09%
+GSMG7/11/22Cheers Inc (N/A)All Cash$105.59 M$1.55$1.46105,04312/31/226.16%0.00%
+MMX11/10/22Triple Flag Precious Metals Corp. (TFPM)All Stock$596.51 M$4.95$4.68381,2671/19/235.85%125.52%
+ISO12/21/22Berkeley Lights (BLI)All Stock$57.8 M$1.64$1.55229,2063/31/235.82%24.13%
+LHCG3/28/22Optum (N/A)All Cash$6.2 B$170.00$161.69262,7443/31/235.14%21.32%
+LMST10/25/22Peoples Bancorp Inc. (PEBO)All Stock$208.2 M$25.43$24.424,2366/30/234.12%8.39%
+MLVF12/14/22First Bank (FRBA)Cash Plus Stock$149.5 M$18.44$17.7521,2536/30/233.89%7.93%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$29.87$28.7810,635,77012/31/223.79%0.00%
+AIMC10/27/22Regal Rexnord Corporation (RRX)All Cash$5 B$62.00$59.75680,1806/30/233.77%7.68%
+AJRD12/18/22L3Harris Technologies (LHX)All Cash$4.7 B$58.00$55.93571,86612/31/233.70%3.72%
+EURN7/11/22Frontline Ltd. (FRO)All Stock$4.08 B$17.60$17.042,816,2223/31/233.30%13.70%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$48.79318,4844/30/233.09%9.57%
+SAL12/05/22NBT Bancorp Inc. (NBTB)All Stock$204 M$32.35$31.43,0116/30/233.02%6.16%
+TIG12/16/22Altaris Capital Partners (N/A)All Cash$316 M$6.15$6318,0576/30/232.50%5.10%
+MAXR12/16/22Advent International (N/A)All Cash$6.4 B$53.00$51.74595,7136/30/232.44%4.97%
+VIVO7/07/22SD Biosensor and SJL Partners (N/A)All Cash$1.53 B$34.00$33.21307,4621/31/232.38%29.94%
+HZNP12/12/22Amgen Inc. (AMGN)All Cash$28.3 B$116.50$113.801,632,5786/30/232.37%4.84%
+SPNE10/11/22Orthofix (OFIX)All Stock$249.93 M$8.55$8.35381,3013/31/232.35%9.77%
+COUP12/12/22Thoma Bravo (N/A)All Cash$8 B$81.00$79.172,261,6976/30/232.31%4.71%
+MFGP8/25/22OpenText (OTEX)All Cash$6 B$6.45$6.31157,2391/31/232.15%27.04%
+FORG10/11/22Thoma Bravo (N/A)All Cash$2.3 B$23.25$22.77621,6376/30/232.11%4.30%
+FHN2/28/22The Toronto-Dominion Bank (TD)Special Conditions$13.4 B$25.00$24.51,508,4866/30/232.04%4.16%
+TCFC12/14/22Shore Bancshares, Inc. (SHBI)All Stock$254.4 M$40.59$39.91,8887/31/231.73%3.00%
+AAWW8/04/22Apollo (APO)All Cash$5.2 B$102.50$100.8261,1993/31/231.69%7.00%
+AGFS11/22/22Paine Schwartz Partners (N/A)All Cash$585.68 M$3.00$2.9648,5333/31/231.35%5.61%
+SJI2/24/22Infrastructure Investments Fund (N/A)All Cash$8.1 B$36.00$35.53442,24512/31/221.32%0.00%
+LBC11/13/22Washington Federal, Inc. (WAFD)All Stock$654 M$11.25$11.1114,9476/30/231.25%2.56%
+AUY11/08/22Pan American Silver Corp. and Agnico Eagle Mines Limited (PAAS)Special Conditions$5.93 B$5.61$5.559,939,0163/31/231.08%4.48%
+ATCO11/01/22Poseidon Acquisition Corp. (N/A)All Cash$10.9 B$15.50$15.34613,2746/30/231.04%2.13%
+MGI2/15/22Madison Dearborn Partners, LLC (N/A)All Cash$1.8 B$11.00$10.89843,1771/31/231.01%12.71%
+COWN8/02/22TD Bank Group (TD)All Cash$1.3 B$39.00$38.62264,9493/31/230.98%4.08%
+LBAI9/27/22Provident Financial Services, Inc. (PFS)All Stock$1.3 B$17.77$17.6198,4596/30/230.91%1.85%
+VVNT12/06/22NRG Energy, Inc. (NRG)All Cash$5.2 B$12.00$11.9851,9473/31/230.84%3.49%
+QUMU12/19/22Enghouse Systems Ltd. (N/A)All Cash$6.69 M$0.90$0.8937274,3372/28/230.70%4.51%
+STOR9/15/22GIC and Oak Street (N/A)All Cash$14 B$32.25$32.061,532,8283/31/230.59%2.46%
+UMPQ10/12/21Columbia Banking System, Inc. (COLB)All Stock$4.5 B$17.95$17.851,413,8923/31/230.57%2.36%
+KNBE10/12/22Vista Equity Partners (N/A)All Cash$4.6 B$24.90$24.78578,1716/30/230.48%0.99%
+EVOP8/01/22Global Payments Inc. (GPN)All Cash$4 B$34.00$33.84334,0473/31/230.47%1.96%
+BNFT11/01/22Voya Financial, Inc. (VOYA)All Cash$570 M$10.50$10.46247,7803/31/230.38%1.59%
+AVEO10/18/22LG Chem, Ltd. (N/A)All Cash$440.99 M$15.00$14.95659,7363/31/230.33%1.39%
+APEN11/29/22Boston Scientific Corporation (N/A)All Cash$615 M$10.00$9.97459,8096/30/230.30%0.61%
+PFHD8/08/22Seacoast Banking Corporation of Florida (SBCF)All Stock$488.6 M$27.79$27.7443,7961/31/230.17%2.14%
+MYOV10/23/22Sumitovant Biopharma Ltd. (N/A)All Cash$2.9 B$27.00$26.96212,0703/31/230.15%0.62%
+IMGO11/21/22Merck & Co., Inc. (MRK)All Cash$848.46 M$36.00$35.95152,0243/31/230.14%0.58%
+POSH10/03/22Naver Corp. (N/A)All Cash$1.2 B$17.90$17.883,507,0021/15/230.11%3.14%
+WEBR12/12/22BDT Capital Partners LLC (N/A)All Cash$3.7 B$8.05$8.05313,2516/30/230.00%0.00%
+USER10/27/22Thoma Bravo and Sunstone Partners (N/A)All Cash$1.3 B$7.50$7.513,249,8916/30/23-0.13%-0.27%
+OPNT11/14/22Indivior PLC (INDV.L)Special Conditions$145 M$20.00$20.2824,1263/31/23-1.38%-5.73%
+OYST11/07/22Viatris Inc. (VTRS)Special Conditions$281 M$11.00$11.171,881,7253/31/23-1.52%-6.31%
+VLDR11/07/22Ouster, Inc. (OUST)All Stock-$16.26 M$0.71$0.73872,471,9616/30/23-4.16%-8.47%
+RFP7/06/22The Paper Excellence Group (N/A)Special Conditions$2.7 B$20.50$21.59276,8076/30/23-5.05%-10.29%
+AYLA10/19/22Advaxis, Inc. (ADXS)All Stock-$4.22 M$0.22$0.400183,6503/31/23-43.79%-181.65%

Disclaimer: I have long positions in Activision Blizzard (ATVI), Spirit Airlines (SAVE), Atlas Air Worldwide (AAWW), First Horizon (FHN), Tower Semiconductor (TSEM) and TEGNA (TGNA). 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.