Merger activity increased last week with one new deal announced, three deals closing and two deals called off.
While two terminated deals in one week is a lot, the news was not all bad as one of those terminations was because the company received a better offer. Just when we thought the bidding war for Tetraphase Pharmaceuticals (TTPH) had come to an end, there was a new offer by Melinta Therapeutics and AcelRx Pharmaceuticals (ACRX) announced that it did not intend to revise further its offer for Tetraphase. Yatra Online (YTRA) filed litigation in the Court of Chancery of the State of Delaware over Ebix’s breaches of the Merger Agreement and terminated the merger agreement.
There was significant change in the spread for Tiffany & Co. (TIF) last week when Reuters reported that LVMH was not considering buying shares of Tiffany on the market. A day later, Tiffany & Co. shares had their biggest gain in more than two months after Reuters reported that LVMH decided against trying to negotiate a lower price for its planned $16 billion acquisition of the U.S. jeweler. LVMH is closely monitoring Tiffany’s debt covenants and it is possible they might attempt to renegotiate the deal if Tiffany breaches those covenants.
The DOJ decided to close its investigation of Schwab’s (SCHW) proposed acquisition of TD Ameritrade Holding Corporation (AMTD). With the exception of the market turmoil in March, the spread on this deal had consistently been between 3% and 4%, indicating the market saw some risk of regulatory risk for this deal and it is interesting to see the DOJ dropped its investigation. The spread on Morgan Stanley’s acquisition of E*Trade (ETFC) barely budged after this news but did narrow marginally to 1.19% by last Friday.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.