Merger Arbitrage Mondays – June 21, 2010

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June 20, 2010 | Merger Arbitrage | | Author Asif

There was very little activity on the Merger Arbitrage front last week with just one new deal announced and one deal closing. The new deal announced was the acquisition of Somanetics (SMTS) by Covidien (COV) for $25 per share in cash for a total deal value of $250 million and the deal that closed was the acquisition of BWAY Holdings by Madison Dearborn partners on June 16, 2010. The interesting part about this new acquisition is that Covidien announced the $2.6 billion acquisition of ev3 (EVVV) less than three weeks ago and that deal is expected to close in July.

The Charles River – Wuxi Pharma drama intensified last week with another fund Relational Investors joining Jana Partners in opposing the merger. This comes just days after the James Foster, the CEO of Charles River (CRL) defended the merger in a letter to Jana Partners. In light of these events, WuXi PharmaTech’s (WX) stock dropped even more last week and is now trading below the point where the acquisition was announced. The spread on the deal is 31.41% as you can see below.

The pending deals I like the most at this point are,

  1. The acquisition of media software company DivX (DIVX) by Sonic Solutions (SNIC), which has a 5.36% spread  and the potential of 19.17% annualized profits if the deal closes by 9/30/2010.

  2. The acquisition of Portec Rail Products (PRPX) by L. B. Foster, which has a 2.81% spread and the potential of 102.55% annualized profits if the deal closes by 6/30/2010.

  3. The acquisition of bottling company Coca-Cola Enterprises (CCE) by The Coca-Cola Company (KO), which does not have a clearly defined per share acquisition price but is a very lucrative deal as discussed in detail in the blog entry Special Report Update: Coca-Cola Enterprises.

You can use our Merger Arbitrage tool at any point to see the spreads on all the pending deals.

Symbol Announced
Date
Acquiring
Company
Closing
Value
Closing
Price
Last
Price
Closing
Date
Profit Annu.

Profit

+ WX 04/26/2010 Charles River Laboratories (CRL) $1.6 billion $21.17 $16.11 12/31/2010 31.41% 59.40%
+ AYE 02/11/2010 FirstEnergy (FE) $8.5 billion $25.66 $22.28 03/31/2011 15.17% 19.56%
+ ATBC 05/10/2010 Jacksonville Bancorp (JAXB) N/A $2.87 $2.51 09/30/2010 14.42% 52.12%
+ SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $19.5 million $7.25 $6.49 08/16/2010 11.71% 76.33%
+ Q 04/22/2010 Century Link (CTL) $10.6 billion $5.82 $5.40 04/21/2011 7.76% 9.32%
+ BGH 06/11/2010 Buckeye Partners LP (BPL) $1.14 billion $40.20 $37.46 12/31/2010 7.31% 13.83%
+ ECLP 06/09/2010 Allscripts-Misys Healthcare (MDRX) $1.3 billion $19.42 $18.13 11/15/2010 7.09% 17.61%
+ EMMS 05/25/2010 JS Acquisition and Alden Global Capital (N/A) $3 billion $2.40 $2.25 09/30/2010 6.67% 24.09%
+ TTIL 06/09/2010 Teoco Corp. (N/A) $58 million $3.00 $2.82 09/30/2010 6.38% 23.07%
+ PINN 02/24/2010 Investor Group lead by Scotia Waterous (USA) (N/A) $11 million $0.34 $0.3211 06/30/2010 5.89% 238.71%
+ DIVX 06/02/2010 Sonic Solutions (SNIC) $323 million $8.38 $7.95 09/30/2010 5.36% 19.36%
+ ME 04/15/2010 Apache (APA) $2.7 billion $24.43 $23.24 09/30/2010 5.12% 18.49%
+ SWWC 03/03/2010 Institutional Investors (N/A) $275 million $11.00 $10.52 03/31/2011 4.56% 5.88%
+ PMACA 06/10/2010 Old Republic International (ORI) $228 million $7.29 $6.98 09/30/2010 4.41% 15.92%
+ PSYS 05/17/2010 Universal Health (N/A) $3.1 billion $33.75 $32.51 12/31/2010 3.81% 7.21%
+ GLG 05/17/2010 Man Group (N/A) $1.6 billion $4.50 $4.35 09/30/2010 3.45% 12.46%
+ MAM 03/12/2010 Emera Inc (N/A) $75.7 million $45.00 $43.545 12/31/2010 3.34% 6.32%
+ IDC 05/04/2010 Silver Lake & Warburg Pincus (N/A) $3.4 billion $33.86 $32.82 09/30/2010 3.17% 11.45%
+ PRPX 02/17/2010 L.B. Foster Co. (N/A) $112 million $11.71 $11.39 06/30/2010 2.81% 113.94%
+ BNE 02/24/2010 RR Donnelley (RRD) $481 million $11.50 $11.20 09/30/2010 2.68% 9.68%
+ MIR 04/12/2010 RRI Energy In. (RRI) $1.6 billion $12.79 $12.48 12/31/2010 2.45% 4.63%
+ SII 02/19/2010 Schlumberger (SLB) $7.5 billion $42.17 $41.18 09/30/2010 2.39% 8.65%
+ BSMD 05/13/2010 Merit Medical Systems (MMSI) $96 million $4.38 $4.28 09/30/2010 2.34% 8.44%
+ PFWD 04/16/2010 Oracle Corp. (ORCL) $685 million $17.00 $16.64 06/30/2010 2.16% 87.74%
+ EFJI 05/17/2010 Francisco Partners (N/A) $1.05 $1.03 09/30/2010 1.94% 7.02%
+ VTIV 05/06/2010 Thomas H. Lee Partners (N/A) $1.1 billion $26.00 $25.52 09/30/2010 1.88% 6.80%
+ SNWL 06/03/2010 investor group led by private equity firm Thoma Bravo LLC (N/A) $636 million $11.50 $11.31 12/31/2010 1.68% 3.18%
+ VETS 06/02/2010 VCA Antech Inc (WOOF) $41.25 million $0.34 $0.335 09/30/2010 1.49% 5.39%
+ OMNI 06/04/2010 Wellspring Capital Management (N/A) $122 million $2.75 $2.71 11/15/2010 1.48% 3.66%
+ RCNI 03/05/2010 ABRY Partners (N/A) $536 million $15.00 $14.80 09/30/2010 1.35% 4.88%
+ DBTK 05/17/2010 Vision Solutions (N/A) $242 million $10.55 $10.41 09/30/2010 1.34% 4.86%
+ DCP 04/12/2010 Cerberus Capital Management (N/A) $1.5 billion $17.55 $17.32 11/15/2010 1.33% 3.30%
+ NADX 04/05/2010 GDC Holdings Inc. (N/A) $100 million $17.00 $16.80 06/30/2010 1.19% 48.28%
+ CYBS 04/21/2010 Visa Inc. (V) $2.0 billion $26.00 $25.70 09/30/2010 1.17% 4.22%
+ IUSA 03/08/2010 CCMP (N/A) $460 million $8.00 $7.92 06/30/2010 1.01% 40.97%
+ WEL 04/09/2010 Halliburton Company (HAL) $240 million $3.00 $2.97 09/30/2010 1.01% 3.65%
+ ODSY 05/24/2010 Gentiva Health Services (GTIV) $1.0 billion $27.00 $26.76 09/30/2010 0.90% 3.24%
+ CAL 05/03/2010 United (UAUA) $1.2 billion $24.99 $24.77 12/31/2010 0.89% 1.68%
+ VIRL 06/10/2010 Synopsys (SNPS) $315 million $12.00 $11.90 12/31/2010 0.84% 1.59%
+ CRN 04/19/2010 GeoGroup (GEO) $685 million $27.42 $27.19 09/30/2010 0.83% 3.02%
+ CKR 03/01/2010 Apollo Management VII (N/A) $694 million $12.55 $12.45 06/30/2010 0.80% 32.57%
+ EVVV 06/01/2010 Covidien plc (COV) $2.6 billion $22.50 $22.33 07/31/2010 0.76% 6.95%
+ VRAD 05/17/2010 Providence Equity (N/A) $294 million $17.25 $17.12 09/30/2010 0.76% 2.74%
+ ATSI 04/29/2010 Medtronic (MDT) $350 million $4.00 $3.97 09/30/2010 0.76% 2.73%
+ SXE 05/07/2010 CGI Group (N/A) $904 million $37.50 $37.25 09/30/2010 0.67% 2.43%
+ WMZ 05/24/2010 Williams Partners L.P. (WPZ) $32.80 $32.60 09/30/2010 0.62% 2.23%
+ ORCD 03/16/2010 eMusic (N/A) $12.77 million $2.05 $2.04 08/16/2010 0.49% 3.20%
+ SMTS 06/16/2010 Covidien (COV) $299 million $25.00 $24.88 07/31/2010 0.48% 4.40%
+ CPII 05/10/2010 Comtech (CMTL) $472.3 million $15.94 $15.87 09/30/2010 0.46% 1.65%
+ SENO 05/05/2010 Bard (BARD.PK) $200 million $11.00 $10.95 09/30/2010 0.46% 1.65%
+ BELM 03/29/2010 Avnet (AVT) $252 million $7.00 $6.97 06/30/2010 0.43% 17.46%
+ SY 05/12/2010 SAP (SAP) $5.8 billion $65.00 $64.73 09/30/2010 0.42% 1.51%
+ STBK 03/18/2010 Roma Financial Corp (ROMA) $14.7 million $2.52 $2.51 08/16/2010 0.40% 2.60%
+ RBI 03/15/2010 affiliate of Oncap Management Partners L.P. (N/A) $13.55 $13.50 08/16/2010 0.37% 2.41%
+ MIL 03/01/2010 Merck (MRK) $6 billion $107.00 $106.61 09/30/2010 0.37% 1.32%
+ PALM 04/28/2010 Hewlett – Packard (HPQ) $1.2 billion $5.70 $5.68 07/31/2010 0.35% 3.21%
+ HTRN 05/05/2010 Endo Pharmaceuticals (ENDP) $223 million $4.85 $4.84 07/31/2010 0.21% 1.89%
+ NGA 04/01/2010 AZZ Inc. (AZZ) $125.6 million $7.50 $7.49 08/31/2010 0.13% 0.69%
+ MDNU 06/11/2010 Danone (N/A) $62.3 million $4.00 $4.00 09/30/2010 0.00% 0.00%
+ TWPG 04/26/2010 Stifel Financial (SF) $300 million $6.08 $6.08 06/30/2010 -0.03% -1.34%
+ TSFG 05/17/2010 TD Bank Financial Group (N/A) $61 million $0.28 $0.2804 09/30/2010 -0.14% -0.52%
+ GNA 06/02/2010 Gerdau (GGB) $1.7 billion $11.00 $11.08 N/A -0.72% 0.00%
+ ARD 04/04/2010 SandRidge Energy Inc. (SD) $1.6 billion $35.27 $36.31 09/30/2010 -2.86% -10.34%
+ SMMX 04/05/2010 Accelrys Inc. (ACCL) $186 million $5.27 $5.55 06/30/2010 -4.97% -201.57%
+ TLCR 06/07/2010 Grifols (N/A) $3.4 billion $19.00 $21.32 12/31/2010 -10.88% -20.58%
+ DTG 04/26/2010 Hertz (HTZ) $1.3 billion $39.34 $44.73 12/31/2010 -12.05% -22.80%
+ MCCC 06/01/2010 Chief Executive Rocco Commisso (N/A) $590 million $6.00 $6.85 N/A -12.41% 0.00%
+ CCE 02/25/2010 The Coca-Cola Company (KO) $12.3 billion N/A $27.04 10/01/2010 N/A N/A



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