Merger Arbitrage Mondays – November 26, 2012

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November 25, 2012 | Merger Arbitrage | | Author Asif

Merger activity decreased last week with two new deals announced and two deals closing.

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

Deal Statistics:

Total Number of Deals Closed in 2012 161
Total Number of Deals Not Completed in 2012 4
Total Number of Pending Deals
Cash Deals 42
Stock Deals 16
Stock & Cash Deals 11
Total Number of Pending Deals 69
Total Deal Size $513.96 billion

New Deals:

  1. The acquisition of Outdoor Channel Holdings (OUTD) by InterMedia Outdoors Holdings, LLC for $8.00 per share in a cash or stock deal. Shareholders can elect to either received $8 per share or they can receive one share in the new merged entity called IMOH that will be listed on the Nasdaq. Since IMOH is not yet listed, we are treating this as an all cash deal. According to the press release, the Company’s board has also approved a 25 cent per share special dividend which will be paid on or about December 7, 2012 to stockholders of record as of the close of business on November 27, 2012.
  2. The acquisition of BioMimetic Therapeutics (BMTI) by Wright Medical Group (WMGI) for approximately $380 million, or $12.97 per share. This is a complex deal with a cash component, a stock component and milestone-based contingent value rights (CVR). According to the press release, “Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at approximately $190 million, or $6.47 per share, based on Wright’s closing stock price on November 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right (CVR), which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment® Bone Graft and upon achieving certain revenue milestones. Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:

    i) $3.50 per share upon FDA approval of Augment® Bone Graft;
    ii) $1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
    iii) $1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic.”

    Based on the closing price of $21.24 for Wright Medical Group (WMGI), the deal is valued at $6.77 without taking the CVR into account. Essentially the market is placing a value of just 26 cents for the CVR that could be worth as much as $6.50 provided all milestones are met.

    We have not yet included this deal in our database. If you have any thoughts on how to value this deal (assign probabilities to each milestone and discount back to current value?), I would love to hear from you.

Updated Deals:

  • On November 20, 2012, BGI-Shenzhen announced that it, through its wholly-owned subsidiary Beta Acquisition Corporation, has extended its all cash tender offer to purchase all outstanding shares of common stock of Complete Genomics, Inc. (GNOM) to 12:00 midnight on Friday, December 14, 2012. The Offer was previously scheduled to expire at 12:00 midnight on Wednesday, November 21, 2012.

Closed Deals:

  1. The acquisition of Dollar Thrifty Automotive Group (DTG) by Dollar Thrifty Automotive Group (HTZ) on November 20, 2012.
  2. The acquisition of Ramtron International (RMTR) by Cypress Semiconductor (CY) on November 21, 2012.

Top 10 deals with largest spreads:

Symbol Announced

Date

Acquiring

Company

Closing

Price

Last

Price

Closing

Date

Profit Annualized

Profit

PLXT 04/30/2012 Integrated Device Technology, Inc. (IDTI) $6.67 $4.13 11/30/2012 61.40% 5602.60%
ECBE 09/25/2012 Crescent Financial Bancshares, Inc. (CRFN) $17.75 $14.52 03/31/2013 22.25% 64.96%
ABVA 05/03/2012 Washington First Bankshares (WFBI) $5.23 $4.50 12/31/2012 16.30% 169.94%
WSB 09/10/2012 Old Line Bancshares, Inc. (OLBK) $6.65 $5.77 06/30/2013 15.17% 25.64%
CFFC 08/02/2012 City Holding Company (CHCO) $5.89 $5.36 03/31/2013 9.82% 28.69%
OUTD 11/16/2012 InterMedia Outdoors Holdings, LLC (N/A) $8.00 $7.32 03/31/2013 9.29% 27.13%
NXY 07/23/2012 CNOOC Ltd. (CEO) $27.50 $25.20 12/31/2012 9.13% 95.18%
GEOY 07/23/2012 DigitalGlobe, Inc. (DGI) $32.05 $30.10 03/31/2013 6.47% 18.89%
JEF 11/12/2012 Leucadia National Corp. (LUK) $17.09 $16.15 03/31/2013 5.83% 17.01%
ANNB 10/23/2012 F.N.B. Corporation (FNB) $12.61 $11.96 04/30/2013 5.41% 12.74%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ PLXT 04/30/2012 Integrated Device Technology, Inc. (IDTI) Cash Plus Stock $330 million $6.67 $4.13 32,987 11/30/2012 61.40% 5602.60%
+ ECBE 09/25/2012 Crescent Financial Bancshares, Inc. (CRFN) All Stock $51.6 million $17.75 $14.52 5,280 03/31/2013 22.25% 64.96%
+ ABVA 05/03/2012 Washington First Bankshares (WFBI) All Stock $24.4 million $5.23 $4.50 18,343 12/31/2012 16.30% 169.94%
+ WSB 09/10/2012 Old Line Bancshares, Inc. (OLBK) All Stock $49 million $6.65 $5.77 N/A 06/30/2013 15.17% 25.64%
+ CFFC 08/02/2012 City Holding Company (CHCO) All Stock $26.1 million $5.89 $5.36 N/A 03/31/2013 9.82% 28.69%
+ OUTD 11/16/2012 InterMedia Outdoors Holdings, LLC (N/A) All Cash N/A $8.00 $7.32 43,790 03/31/2013 9.29% 27.13%
+ NXY 07/23/2012 CNOOC Ltd. (CEO) All Cash $15.1 billion $27.50 $25.20 2,110,618 12/31/2012 9.13% 95.18%
+ GEOY 07/23/2012 DigitalGlobe, Inc. (DGI) Cash Plus Stock $900 million $32.05 $30.10 90,951 03/31/2013 6.47% 18.89%
+ JEF 11/12/2012 Leucadia National Corp. (LUK) All Stock $3.59 billion $17.09 $16.15 894,200 03/31/2013 5.83% 17.01%
+ ANNB 10/23/2012 F.N.B. Corporation (FNB) All Stock $51 million $12.61 $11.96 1,300 04/30/2013 5.41% 12.74%
+ VRTA 05/31/2012 Vestin Realty Mortgage II, Inc. (VRTB) All Stock N/A $1.19 $1.13 11,367 12/31/2012 5.22% 54.45%
+ PRWT 10/30/2012 AmericanWest Bank (N/A) All Cash $16.6 million $1.65 $1.57 3,937 06/30/2013 5.10% 8.61%
+ BXG 11/14/2011 BFC Financial Corporation (BFCF) All Stock N/A $9.12 $8.68 43,481 12/31/2012 5.07% 52.86%
+ CYBI 10/17/2012 UM Holdings, Ltd. (N/A) All Cash N/A $2.55 $2.43 20,100 03/31/2013 4.94% 14.42%
+ TEA 11/14/2012 Starbucks Corporation (SBUX) All Cash $620 million $15.50 $14.85 344,380 12/31/2012 4.38% 45.65%
+ BTFG 05/29/2012 Trustmark Corporation (TRMK) All Stock $55.4 million $2.80 $2.70 6,202 12/31/2012 3.75% 39.11%
+ DITC 09/18/2012 Nuance Communications, Inc. (NUAN) All Cash $22.5 million $1.45 $1.40 9,460 12/31/2012 3.57% 37.24%
+ FSBI 07/19/2012 WesBanco Inc. (WSBC) Cash Plus Stock $70.8 million $22.07 $21.38 N/A 03/31/2013 3.22% 9.39%
+ CYMI 10/17/2012 ASML Holding NV (ASML) Cash Plus Stock $2.5 billion $86.17 $83.63 421,126 06/30/2013 3.04% 5.13%
+ CRBC 09/13/2012 FirstMerit Corporation (FMER) All Stock $912 million $19.17 $18.66 124,821 06/30/2013 2.71% 4.58%
+ SHAW 07/30/2012 Chicago Bridge & Iron Company (CBI) Cash Plus Stock $3 billion $46.10 $44.89 354,773 03/31/2013 2.69% 7.86%
+ HCBK 08/27/2012 M&T Bank Corporation (MTB) All Stock $3.7 billion $8.38 $8.16 597,894 03/31/2013 2.64% 7.70%
+ RVR 11/15/2012 Parthenon Capital Partners (N/A) All Cash $79.5 million $21.93 $21.37 N/A 03/31/2013 2.62% 7.65%
+ SEH 10/24/2012 PolyOne Corporation (POL) Cash Plus Stock $393 million $8.81 $8.62 453,113 03/31/2013 2.25% 6.57%
+ FCAL 11/06/2012 PacWest Bancorp (PACW) All Cash $231 million $8.00 $7.83 27,970 03/31/2013 2.17% 6.34%
+ ALNC 10/08/2012 NBT Bancorp Inc. (NBTB) All Stock $233.4 million $42.75 $41.87 34,581 06/30/2013 2.11% 3.56%
+ FSIN 06/28/2012 Chairman and Co-Chief Executive Officer, Mr. Li Fu, and Abax Global Capital (Hong Kong) Limited (N/A) All Cash N/A $9.50 $9.31 58,967 12/31/2012 2.04% 21.28%
+ PSSI 10/25/2012 McKesson Corporation (MCK) All Cash $2.1 billion $29.00 $28.46 298,388 03/31/2013 1.90% 5.54%
+ LMLP 09/24/2012 Digital River, Inc. (DRIV) All Cash $102.8 million $3.45 $3.39 78,787 03/31/2013 1.77% 5.17%
+ KBW 11/05/2012 Stifel Financial Corp. (SF) All Cash $575 million $17.50 $17.20 144,557 12/31/2069 1.74% 0.03%
+ MRX 09/03/2012 Valeant Pharmaceuticals International, Inc. (VRX) All Cash $2.6 billion $44.00 $43.29 488,183 06/30/2013 1.64% 2.77%
+ CVH 08/20/2012 Aetna Inc. (AET) Cash Plus Stock $7.3 billion $44.00 $43.40 434,170 06/30/2013 1.39% 2.34%
+ WWIN 07/24/2012 Winner Holding Limited (N/A) All Cash N/A $4.50 $4.44 3,838 03/31/2013 1.35% 3.95%
+ ACOM 10/22/2012 Permira Advisers LLP (N/A) All Cash $1.6 billion $32.00 $31.59 140,117 03/31/2013 1.30% 3.79%
+ KYAK 11/08/2012 priceline.com Incorporated (PCLN) All Cash $1.65 billion $40.00 $39.53 35,833 03/31/2013 1.19% 3.47%
+ WRC 10/31/2012 PVH Corp. (PVH) Cash Plus Stock $2.9 billion $71.97 $71.16 255,356 03/31/2013 1.14% 3.32%
+ GEN 07/23/2012 NRG Energy, Inc. (NRG) All Stock $1.7 billion $2.43 $2.40 1,621,261 03/31/2013 1.08% 3.15%
+ SRZ 08/22/2012 Health Care REIT, Inc. (HCN) All Cash $845 million $14.50 $14.35 379,455 06/30/2013 1.05% 1.77%
+ YTEC 08/13/2012 New Sihitech Limited (N/A) All Cash $79.5 million $3.90 $3.86 32,164 12/31/2012 1.04% 10.81%
+ SUNH 06/20/2012 Genesis HealthCare (N/A) All Cash $275 million $8.50 $8.44 22,479 12/31/2012 0.71% 7.41%
+ JDAS 11/01/2012 RedPrairie (N/A) All Cash $1.9 billion $45.00 $44.71 249,886 12/31/2012 0.65% 6.76%
+ RBN 08/09/2012 National Oilwell Varco, Inc. (NOV) All Cash $2.5 billion $60.00 $59.65 60,419 12/31/2012 0.59% 6.12%
+ NOOF 10/15/2012 LFP Broadcasting, LLC (N/A) All Cash $33 million $2.02 $2.01 11,709 12/31/2012 0.50% 5.19%
+ FSR 08/30/2012 Validus Holdings, Ltd. (VR) Cash Plus Stock $600 million $8.70 $8.66 65,389 12/31/2012 0.47% 4.93%
+ ZZ 09/27/2012 Tempur-Pedic International Inc. (TPX) All Cash $1.3 billion $2.20 $2.19 215,630 06/30/2013 0.46% 0.77%
+ AGP 07/09/2012 WellPoint Inc. (WLP) All Cash $4.9 billion $92.00 $91.59 117,790 03/31/2013 0.45% 1.31%
+ MDF 11/05/2012 Humana Inc. (HUM) All Cash $850 million $11.25 $11.20 397,966 03/31/2013 0.45% 1.30%
+ CBE 05/21/2012 Eaton Corporation (ETN) Cash Plus Stock $11.46 billion $79.11 $78.77 738,262 12/31/2012 0.44% 4.55%
+ SAVB 08/08/2012 SCBT Financial Corporation (SCBT) All Stock $67.1 million $9.46 $9.42 549 12/31/2012 0.39% 4.02%
+ CRDN 10/01/2012 3M Co. (MMM) All Cash $670 million $35.00 $34.87 661,800 12/31/2012 0.37% 3.89%
+ WMCO 11/01/2012 Curtiss-Wright Corp. (CW) All Cash $119 million $15.42 $15.37 59,200 03/31/2013 0.33% 0.95%
+ GNOM 09/17/2012 BGI-Shenzhen (N/A) All Cash $117.6 million $3.15 $3.14 219,087 12/14/2012 0.32% 6.46%
+ SBX 08/28/2012 Enstar Group Limited (ESGR) All Cash $249 million $11.11 $11.09 24,884 03/31/2013 0.18% 0.53%
+ PLFE 07/13/2012 Athene Annuity (N/A) All Cash $415 million $14.00 $13.98 18,573 12/31/2012 0.14% 1.49%
+ CHG 02/21/2012 Fortis Inc. (N/A) All Cash $1.5 billion $65.00 $64.91 24,149 03/31/2013 0.14% 0.40%
+ PCBC 03/12/2012 UnionBanCal Corp. (N/A) All Cash $1.51 billion $46.00 $45.95 7,357 12/31/2012 0.11% 1.13%
+ CASC 10/22/2012 Toyota Industries Corporation (N/A) All Cash $759 million $65.00 $64.96 42,822 12/31/2012 0.06% 0.64%
+ KNXA 08/27/2012 International Business Machines Corporation (IBM) All Cash $1.3 billion $46.00 $45.98 82,990 12/31/2012 0.04% 0.45%
+ DUSA 11/08/2012 Sun Pharmaceutical Industries Limited (N/A) All Cash $230 million $8.00 $8.00 136,879 12/31/2069 0.00% 0.00%
+ ARCT 09/06/2012 Realty Income Corp. (O) All Stock $2.95 billion $11.30 $11.33 655,762 03/31/2013 -0.23% -0.68%
+ OPNT 10/29/2012 Riverbed Technology, Inc. (RVBD) Cash Plus Stock $921 million $41.47 $41.60 45,805 12/31/2012 -0.32% -3.30%
+ TIE 11/09/2012 Precision Castparts Corp. (PCP) All Cash $2.9 billion $16.50 $16.59 662,952 12/31/2012 -0.54% -5.66%
+ WCBO 09/26/2012 Columbia Banking System, Inc. (COLB) All Stock $506 million $21.39 $21.84 44,727 03/31/2013 -2.07% -6.04%
+ TPCG 08/27/2012 First Reserve Corporation and SK Capital Partners (N/A) All Cash $850 million $45.00 $47.97 22,517 12/31/2012 -6.19% -64.57%
+ VSNT 10/01/2012 UNICOM Systems, Inc. (N/A) All Cash $32 million $11.50 $12.79 49,188 01/31/2013 -10.09% -55.78%
+ FACE 08/13/2012 Swander Pace Capital (N/A) All Cash $65 million $4.25 $4.83 59,999 12/31/2012 -12.01% -125.23%
+ TARO 08/13/2012 Sun Pharmaceutical (N/A) All Cash $1.45 billion $39.50 $46.50 700 12/31/2012 -15.05% -156.99%
+ WAVE 08/02/2012 AT&T, Inc. (T) All Cash $600 million $1.00 $1.20 11,000 12/31/2069 -16.67% -0.29%
+ SHF 10/30/2012 Bayer HealthCare LLC (N/A) All Cash $1.2 billion $34.00 $41.90 101,988 12/31/2012 -18.85% -196.62%



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