Merger Arbitrage Mondays – June 28, 2010

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June 27, 2010 | Merger Arbitrage | | Author Asif

The lull we saw in mergers the week prior proved to be nothing more than a temporary slowdown as deal activity picked up once again with four new deals announced last week. None of the pending deals closed last week.

The new deals include the acquisition of American Italian Pasta (AIPC) by Ralcorp Holdings (RAH) for $53 per share in cash, the acquisition of Alloy (ALOY) by ZelnickMedia for $9.80 per share in cash, the wholly-owned subsidiary of Puerto Rico based Santander Bancorp (SBP), Administracian de Bancos Latinoamericanos Santander, S.L. (“ABLASA”) is making a tender offer for $12.69 per share in cash for all shares of Santander Bancorp it does not already own and the acquisition of Valeant Pharmaceuticals International (VRX) by Biovail (BVF) in a cash plus stock deal. Valeant stockholders will get a one-time special cash dividend of $16.77 per share and 1.7809 shares of Biovail common stock. The combined company will pay an additional $1/share dividend to all stockholders of the new entity.

EF Johnson Technology (EFJI) announced an amended merger agreement with Francisco Partners increasing the purchase price by over 42% from $1.05 per share to $1.50 per share in cash.

Portec Rail Products (PRPX), one of the three pending deals I picked last week as appearing attractive, spiked 2.43% on nearly 10 times average daily volume on Friday. It remains to be seen if its merger with L.B. Foster will complete by the end of this month as announced. In contrast, Coca-Cola Enterprises (CCE) dropped last week, making the deal look even more attractive. I own positions in both these companies and may also start a position in DivX (DIVX), the third company I picked last week.

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

Profit

+ ATBC 05/10/2010 Jacksonville Bancorp (JAXB) N/A $2.86 $2.03 09/30/2010 40.99% 159.14%
+ WX 04/26/2010 Charles River Laboratories (CRL) $1.6 billion $20.79 $16.26 12/31/2010 27.86% 54.68%
+ SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $19.5 million $7.25 $6.25 08/16/2010 16.00% 119.18%
+ AYE 02/11/2010 FirstEnergy (FE) $8.5 billion $24.02 $21.03 03/31/2011 14.21% 18.79%
+ TSFG 05/17/2010 TD Bank Financial Group (N/A) $61 million $0.28 $0.2551 09/30/2010 9.76% 37.90%
+ EMMS 05/25/2010 JS Acquisition and Alden Global Capital (N/A) $3 billion $2.40 $2.19 09/30/2010 9.59% 37.23%
+ PINN 02/24/2010 Investor Group lead by Scotia Waterous (USA) (N/A) $11 million $0.34 $0.315 06/30/2010 7.94% 1448.41%
+ Q 04/22/2010 Century Link (CTL) $10.6 billion $5.65 $5.27 04/21/2011 7.17% 8.81%
+ ECLP 06/09/2010 Allscripts-Misys Healthcare (MDRX) $1.3 billion $19.75 $18.47 11/15/2010 6.94% 18.10%
+ TTIL 06/09/2010 Teoco Corp. (N/A) $58 million $3.00 $2.82 09/30/2010 6.38% 24.78%
+ BGH 06/11/2010 Buckeye Partners LP (BPL) $1.14 billion $41.78 $39.55 12/31/2010 5.63% 11.06%
+ SWWC 03/03/2010 Institutional Investors (N/A) $275 million $11.00 $10.46 03/31/2011 5.16% 6.83%
+ ME 04/15/2010 Apache (APA) $2.7 billion $23.13 $22.14 09/30/2010 4.45% 17.28%
+ DIVX 06/02/2010 Sonic Solutions (SNIC) $323 million $8.11 $7.77 09/30/2010 4.43% 17.18%
+ EFJI 05/17/2010 Francisco Partners (N/A) N/A $1.50 $1.44 09/30/2010 4.17% 16.18%
+ GLG 05/17/2010 Man Group (N/A) $1.6 billion $4.50 $4.32 09/30/2010 4.17% 16.18%
+ OMNI 06/04/2010 Wellspring Capital Management (N/A) $122 million $2.75 $2.66 11/15/2010 3.38% 8.82%
+ ALOY 06/24/2010 ZelnickMedia (N/A) $126.5 million $9.80 $9.50 12/31/2010 3.16% 6.20%
+ PSYS 05/17/2010 Universal Health (N/A) $3.1 billion $33.75 $32.75 12/31/2010 3.05% 5.99%
+ PRPX 02/17/2010 L.B. Foster Co. (N/A) $112 million $11.71 $11.39 06/30/2010 2.81% 512.73%
+ SII 02/19/2010 Schlumberger (SLB) $7.5 billion $40.56 $39.47 09/30/2010 2.75% 10.68%
+ MAM 03/12/2010 Emera Inc (N/A) $75.7 million $45.00 $43.813 12/31/2010 2.71% 5.32%
+ BNE 02/24/2010 RR Donnelley (RRD) $481 million $11.50 $11.23 09/30/2010 2.40% 9.34%
+ PFWD 04/16/2010 Oracle Corp. (ORCL) $685 million $17.00 $16.66 06/30/2010 2.04% 372.45%
+ VTIV 05/06/2010 Thomas H. Lee Partners (N/A) $1.1 billion $26.00 $25.48 09/30/2010 2.04% 7.92%
+ PMACA 06/10/2010 Old Republic International (ORI) $228 million $7.06 $6.93 09/30/2010 1.83% 7.09%
+ CYBS 04/21/2010 Visa Inc. (V) $2.0 billion $26.00 $25.55 09/30/2010 1.76% 6.84%
+ STBK 03/18/2010 Roma Financial Corp (ROMA) $14.7 million $2.52 $2.48 08/16/2010 1.61% 12.01%
+ IDC 05/04/2010 Silver Lake & Warburg Pincus (N/A) $3.4 billion $33.86 $33.42 09/30/2010 1.32% 5.11%
+ RCNI 03/05/2010 ABRY Partners (N/A) $536 million $15.00 $14.82 09/30/2010 1.21% 4.72%
+ ODSY 05/24/2010 Gentiva Health Services (GTIV) $1.0 billion $27.00 $26.68 09/30/2010 1.20% 4.66%
+ MIR 04/12/2010 RRI Energy In. (RRI) $1.6 billion $11.99 $11.85 12/31/2010 1.20% 2.35%
+ WMZ 05/24/2010 Williams Partners L.P. (WPZ) $32.85 $32.47 09/30/2010 1.16% 4.50%
+ ORCD 03/16/2010 eMusic (N/A) $12.77 million $2.05 $2.03 08/16/2010 0.99% 7.34%
+ BSMD 05/13/2010 Merit Medical Systems (MMSI) $96 million $4.38 $4.34 09/30/2010 0.92% 3.58%
+ DCP 04/12/2010 Cerberus Capital Management (N/A) $1.5 billion $17.55 $17.39 11/15/2010 0.92% 2.40%
+ NADX 04/05/2010 GDC Holdings Inc. (N/A) $100 million $17.00 $16.8501 06/30/2010 0.89% 162.35%
+ IUSA 03/08/2010 CCMP (N/A) $460 million $8.00 $7.93 06/30/2010 0.88% 161.10%
+ VIRL 06/10/2010 Synopsys (SNPS) $315 million $12.00 $11.90 12/31/2010 0.84% 1.65%
+ SY 05/12/2010 SAP (SAP) $5.8 billion $65.00 $64.51 09/30/2010 0.76% 2.95%
+ MDNU 06/11/2010 Danone (N/A) $62.3 million $4.00 $3.97 09/30/2010 0.76% 2.93%
+ EVVV 06/01/2010 Covidien plc (COV) $2.6 billion $22.50 $22.35 07/31/2010 0.67% 7.42%
+ CPII 05/10/2010 Comtech (CMTL) $472.3 million $16.05 $15.94 09/30/2010 0.66% 2.56%
+ RBI 03/15/2010 affiliate of Oncap Management Partners L.P. (N/A) $13.55 $13.47 08/16/2010 0.59% 4.42%
+ VRAD 05/17/2010 Providence Equity (N/A) $294 million $17.25 $17.15 09/30/2010 0.58% 2.26%
+ TWPG 04/26/2010 Stifel Financial (SF) $300 million $6.32 $6.29 06/30/2010 0.53% 97.21%
+ ATSI 04/29/2010 Medtronic (MDT) $350 million $4.00 $3.98 09/30/2010 0.50% 1.95%
+ MIL 03/01/2010 Merck (MRK) $6 billion $107.00 $106.57 09/30/2010 0.40% 1.57%
+ CRN 04/19/2010 GeoGroup (GEO) $685 million $27.65 $27.54 09/30/2010 0.40% 1.57%
+ SMTS 06/16/2010 Covidien (COV) $299 million $25.00 $24.92 07/31/2010 0.32% 3.55%
+ AIPC 06/21/2010 Ralcorp Holdings (RAH) $1.2 billion $53.00 $52.84 09/30/2010 0.30% 1.18%
+ DBTK 05/17/2010 Vision Solutions (N/A) $242 million $10.55 $10.52 09/30/2010 0.29% 1.11%
+ SXE 05/07/2010 CGI Group (N/A) $904 million $37.50 $37.40 09/30/2010 0.27% 1.04%
+ SENO 05/05/2010 Bard (BARD.PK) $200 million $11.00 $10.98 09/30/2010 0.18% 0.71%
+ CKR 03/01/2010 Apollo Management VII (N/A) $694 million $12.55 $12.53 06/30/2010 0.16% 29.13%
+ BELM 03/29/2010 Avnet (AVT) $252 million $7.00 $6.99 06/30/2010 0.14% 26.11%
+ PALM 04/28/2010 Hewlett – Packard (HPQ) $1.2 billion $5.70 $5.6975 07/31/2010 0.04% 0.49%
+ SBP 06/24/2010 ABLASA (N/A) N/A $12.69 $12.69 07/22/2010 0.00% 0.00%
+ WEL 04/09/2010 Halliburton Company (HAL) $240 million $3.00 $3.00 09/30/2010 0.00% 0.00%
+ GNA 06/02/2010 Gerdau (GGB) $1.7 billion $11.00 $11.00 N/A 0.00% 0.00%
+ VETS 06/02/2010 VCA Antech Inc (WOOF) $41.25 million $0.34 $0.3401 09/30/2010 -0.03% -0.11%
+ HTRN 05/05/2010 Endo Pharmaceuticals (ENDP) $223 million $4.85 $4.86 07/31/2010 -0.21% -2.28%
+ CAL 05/03/2010 United (UAUA) $1.2 billion $21.95 $22.13 12/31/2010 -0.80% -1.57%
+ VRX 06/21/2010 Biovail Corporation (BVF) $3.3 billion $51.57 $52.76 12/31/2010 -2.26% -4.43%
+ SNWL 06/03/2010 investor group led by private equity firm Thoma Bravo LLC (N/A) $636 million $11.50 $11.85 12/31/2010 -2.95% -5.80%
+ ARD 04/04/2010 SandRidge Energy Inc. (SD) $1.6 billion $32.93 $34.34 09/30/2010 -4.11% -15.94%
+ SMMX 04/05/2010 Accelrys Inc. (ACCL) $186 million $5.31 $5.58 06/30/2010 -4.78% -872.72%
+ NGA 04/01/2010 AZZ Inc. (AZZ) $125.6 million $7.50 $8.02 08/31/2010 -6.48% -36.98%
+ DTG 04/26/2010 Hertz (HTZ) $1.3 billion $39.15 $43.73 12/31/2010 -10.47% -20.54%
+ TLCR 06/07/2010 Grifols (N/A) $3.4 billion $19.00 $21.29 12/31/2010 -10.76% -21.11%
+ MCCC 06/01/2010 Chief Executive Rocco Commisso (N/A) $590 million $6.00 $6.93 N/A -13.42% 0.00%
+ CCE 02/25/2010 The Coca-Cola Company (KO) $12.3 billion N/A $25.88 10/01/2010 N/A N/A



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