Merger Arbitrage Mondays – May 17, 2010

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May 17, 2010 | Merger Arbitrage | | Author Asif

With the turmoil in the market, merger activity slowed just a little with four new deals announced last week and one deal closing. The deal that closed was the acquisition of Brink’s Home Security Holdings (CFL) by Tyco International on May 14, 2010.

Two out of the four new deals are all cash deals while the other two are a combination of cash and stock. The all cash deals include the acquisition of Sybase (SY) by SAP (SAP) where SAP is offering $65 for each outstanding share of Sybase’s common stock and the acquisition of BioSphere Medical (BSMD) by Merit Medical Systems (MMSI) where BioSphere Medical shareholders will receive $4.38 per share in cash. Given that Sybase closed below $65 on Friday, the market is not anticipating a competing offer from other tech heavyweights like Oracle (ORCL).

The cash plus stock deals include the acquisition of CPI International (CPII) by Comtech Telecommunications and the acquisition of Atlantic BancGroup (ATBC) by Jacksonville Bancorp (JAXB). If the merger is completed, CPI International shareholders will receive a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing. The fraction shall not be greater than 0.2382 nor less than 0.2132. On the completion of the merger, Atlantic BancGroup shareholders will receive 0.2 shares of Jacksonville Bancorp common stock for each share of Atlantic BancGroup common stock held, plus up to approximately $0.65 per share in cash, subject to the qualifying sale of certain Atlantic BancGroup assets.

  Symbol Anno.
Date
Acquiring
Company
Clo.
Value
Clo.
Price
Last
Price
Clo.
Date
Profit Annu.
Profit
+ ADG 1/19/2010 Chemring Group Plc $59 million 7.25 4.92 5/31/2010 47.36% 1234.68%
+ AYE 2/11/2010 FirstEnergy $8.5 billion 24.51 21.54 3/31/2011 13.79% 16.03%
+ PINN 2/24/2010 Investor Group lead by Scotia Waterous (USA) $11 million 0.34 0.3101 6/30/2010 9.64% 81.85%
+ SSE 2/23/2010 Naugatuck Valley Financial Corp $19.5 million 7.25 6.66 8/16/2010 8.86% 36.33%
+ Q 4/22/2010 Century Link $10.6 billion 5.68 5.28 4/21/2011 7.58% 8.28%
+ ME 4/15/2010 Apache $2.7 billion 23.87 22.64 9/30/2010 5.43% 14.91%
+ DCP 4/12/2010 Cerberus Capital Management $1.5 billion 17.55 16.67 11/15/2010 5.28% 10.82%
+ CPII 5/10/2010 Comtech $472.3 million 16.4 15.69 9/30/2010 4.53% 12.42%
+ RCNI 3/5/2010 Emera Inc. $1.2 billion 15 14.4 9/30/2010 4.17% #VALUE!
+ STBK 3/18/2010 Roma Financial Corp $14.7 million 2.52 2.42 8/16/2010 4.13% #VALUE!
+ SII 2/19/2010 Schlumberger $7.5 billion 45.2 43.54 9/30/2010 3.81% #VALUE!
+ BNE 2/24/2010 RR Donnelley $481 million 11.5 11.09 9/30/2010 3.70% 10.15%
+ VTIV 5/6/2010 Thomas H. Lee Partners $1.1 billion 26 25.09 9/30/2010 3.63% 9.95%
+ IDC 5/4/2010 Silver Lake & Warburg Pincus $3.4 billion 33.86 32.68 9/30/2010 3.61% 9.91%
+ SWWC 3/3/2010 Institutional Investors $275 million 11 10.62 3/31/2011 3.58% 4.16%
+ MAM 3/12/2010   $75.7 million 45 43.69 12/31/2010 3.00% 4.89%
+ ORCD 3/16/2010 eMusic $12.77 million 2.05 2 8/16/2010 2.50% 10.25%
+ SXE 5/7/2010 CGI Group $904 million 37.5 36.71 9/30/2010 2.15% 5.91%
+ BSMD 5/13/2010 Merit Medical Systems $96 million 4.38 4.3 9/30/2010 1.86% 5.11%
+ ARD 4/4/2010 SandRidge Energy Inc. $1.6 billion 35.37 34.74 9/30/2010 1.81% 4.98%
+ WEL 4/9/2010 Halliburton Company $240 million 3 2.95 9/30/2010 1.69% 4.65%
+ CYBS 4/21/2010 Visa Inc. $2.0 billion 26 25.6 9/30/2010 1.56% 4.29%
+ ATSI 4/29/2010 Medtronic $350 million 4 3.94 9/30/2010 1.52% 4.18%
+ HTRN 5/5/2010 Endo Pharmaceuticals $223 million 4.85 4.78 7/31/2010 1.46% 7.22%
+ RBI 3/15/2010 affiliate of Oncap Management Partners L.P.   13.55 13.37 8/16/10 1.35% 5.52%
+ SENO 5/5/2010 Bard $200 million 11 10.87 9/30/2010 1.20% 3.28%
+ PFWD 4/16/2010 Oracle Corp. $685 million 17 16.8 6/30/2010 1.19% 10.11%
+ MIL 3/1/2010 Merck $6 billion 107 105.9 9/30/2010 1.04% 2.85%
+ WX 4/26/2010 Charles River Laboratories $1.6 billion 18.59 18.4 12/31/2010 1.03% 1.68%
+ SKIL 2/12/2010 consortium of private equity funds $1.2 billion 11.25 11.14 5/31/2010 0.99% 25.74%
+ CAL 5/3/2010 United $1.2 billion 20.84 20.65 12/31/2010 0.92% 1.50%
+ NADX 4/5/2010 GDC Holdings Inc. $100 million 17 16.85 6/30/2010 0.89% 7.56%
+ CKR 3/1/2010 Apollo Management VII $694 million 12.55 12.44 6/30/2010 0.88% 7.51%
+ CRN 4/19/2010 GeoGroup $685 million 28.04 27.81 9/30/2010 0.83% 2.27%
+ BWY 3/29/2010 Madison Dearborn Partners, LLC ("MDP") $915 million 20 19.85 8/16/2010 0.76% 3.10%
+ RISK 3/1/2010 MSCI $1.55 billion 22.26 22.11 7/16/2010 0.68% 4.20%
+ DCAI 4/14/2010 U.S. Renal Care $112 million 11.25 11.18 5/31/2010 0.63% 16.32%
+ BELM 3/29/2010 Avnet $252 million 7 6.96 6/30/2010 0.57% 4.88%
+ SY 5/12/2010 SAP $5.8 billion 65 64.65 9/30/2010 0.54% 1.49%
+ TWPG 4/26/2010 Stifel Financial $300 million 7.5 7.46 6/30/2010 0.54% 4.55%
+ IUSA 3/8/2010 CCMP $460 million 8 7.96 6/30/2010 0.50% 4.27%
+ SMMX 4/5/2010 Accelrys Inc. $186 million 5.59 5.57 6/30/2010 0.36% 3.05%
+ PALM 4/28/2010 Hewlett – Packard $1.2 billion 5.7 5.68 7/31/2010 0.35% 1.74%
+ PRPX 2/17/2010 L.B. Foster Co. $112 million 11.71 11.67 6/30/2010 0.34% 2.91%
+ ZNT 2/18/2010 Fairfax Financial Holdings $I.4 billion 38 37.9 9/30/2010 0.26% 0.72%
+ PONE 4/26/2010 GTCR $828 million 15.5 15.47 6/30/2010 0.19% 1.65%
+ CXG 3/22/2010 Consol Energy Inc. $363 million 38.25 38.18 6/30/2010 0.18% 1.56%
+ TUTR 3/26/2010 Thoma Brava $141 million 5.6 5.59 7/31/2010 0.18% 0.88%
+ NGA 4/1/2010 AZZ Inc. $125.6 million 7.5 7.49 8/31/2010 0.13% 0.47%
+ MIR 4/12/2010 RRI Energy In. $1.6 billion 12.39 12.51 12/31/2010 -0.96% -1.56%
+ DTG 4/26/2010 Hertz $1.2 billion 41 50.29 12/31/2010 -18.47% -30.10%
+ ATBC 5/10/2010 Jacksonville Bancorp    2.22 2.75 9/30/2010 -19.27% -52.89%
+ CCE 2/25/2010 The Coca-Cola Company $12.3 billion   26.57 10/1/2010    



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