Merger Arbitrage Mondays – July 21, 2014

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July 21, 2014 | Merger Arbitrage | | Author Asif

Merger Activity increased last week with five new mergers announced and four 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 2014 92
Total Number of Deals Not Completed in 2014 2
Total Number of Pending Deals
Cash Deals 29
Stock Deals 18
Stock & Cash Deals 13
Special Conditions 6
Total Number of Pending Deals 66
Total Deal Size $444.74 billion

New Deals:

  1. The acquisition of Rockwood Holdings (ROC) by Albemarle Corporation (ALB) for $6.2 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Rockwood Holdings will receive $50.65 in cash and 0.4803 of a share of Albemarle common stock.
  2. The acquisition of Lorillard (LO) by Reynolds American Inc. (RAI) for $27.4 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Lorillard will receive $50.50 in cash and 0.2909 of a share in RAI stock.
  3. The acquisition of Franklin Financial Corporation (FRNK) by Towne Bank (TOWN) for $275 million in an all stock deal. Under the terms of the agreement, shareholders of Franklin Financial Corporation will receive 1.40 shares of TowneBank common stock for each share of Franklin.
  4. The acquisition of zipRealty (ZIPR) by Realogy Holdings (RLGY) for $166 million or $6.75 per share in cash.
  5. The acquisition of International Game Technology (IGT) by GTECH S.p.A. (GTKYY) for $6.4 billion. Under the terms of the agreement, shareholders of International Game Technology will receive an aggregate value of $18.25 per IGT share in a combination of $13.69 in cash plus 0.1819 ordinary shares of NewCo for each share of IGT common stock, as described below according to the press release. GTECH shareholders will exchange each of their existing GTECH shares for one (1) newly issued NewCo share. Assuming a mixed consideration election, the stock consideration portion is subject to adjustment with a 15% up and down collar based on the trading price of GTECH shares prior to the closing of the transaction.  The exchange ratio of IGT common stock for NewCo stock will be determined by the average of the volume-weighted average price of GTECH stock (converted to USD) on ten randomly selected trading days occurring within the twenty trading-day period ending on (and including) the second full trading day prior to the closing of the transaction (the “GTECH Share Trading Price”).  If the GTECH Share Trading Price is between or equal to $25.08 and $28.84, the exchange ratio will vary between 0.1819x and 0.1582x.  Above $28.84, the exchange ratio will be fixed at 0.1582x.  Between or equal to $21.32 and $25.08, IGT shareholders will receive NewCo stock at a fixed ratio of 0.1819x plus additional cash consideration up to $0.68 per IGT share.  Below $21.32 IGT shareholders receive 0.1819 NewCo shares and additional cash consideration equal to the GTECH Share Trading Price multiplied by 0.0321. Given the limitations of our tool, we have entered this deal as a “special conditions” deal with a closing value of $18.25.

Closed Deals:

  1. The acquisition of Hastings Entertainment (HAST) by an affiliate of Joel Weinshanker on July 15, 2014. It took 120 days for this deal to be completed.
  2. The acquisition of PetroLogistics (PDH) by Flint Hills Resources on July 16, 2014. It took 49 days for this deal to be completed.
  3. The acquisition of AutoNavi Holdings Limited (AMAP) by affiliate of Alibaba Group Holding Limited (“Alibaba”) on July 17, 2014. It took 97 days for this deal to be completed.
  4. The acquisition of Cbeyond (CBEY) by Birch Communications on July 18, 2014. It took 88 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced

Date

Acquiring

Company

Closing

Price

Last

Price

Closing

Date

Profit Annualized

Profit

TWGP 01/06/2014 ACP Re Ltd. (N/A) $2.50 $1.83 11/15/2014 36.61% 114.22%
FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) $4.05 $3.68 12/31/2014 10.18% 22.79%
LO 07/15/2014 Reynolds American Inc. (RAI) $67.56 $61.68 06/30/2015 9.54% 10.12%
DTV 05/18/2014 AT&T, Inc. (T) $95.00 $86.96 05/31/2015 9.25% 10.75%
OABC 04/29/2014 Southside Bancshares Inc. (SBSI) $26.06 $24.23 12/31/2014 7.54% 16.88%
MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) $22.60 $21.05 09/30/2014 7.36% 37.85%
COV 06/15/2014 Medtronic, Inc. (MDT) $94.81 $88.53 01/31/2015 7.09% 13.34%
OVRL 05/15/2014 Sphere 3D Corporation (ANY) $4.59 $4.30 09/30/2014 6.75% 34.70%
IGT 07/16/2014 GTECH S.p.A. (GTKYY) $18.25 $17.15 06/30/2015 6.41% 6.81%
HCBK 08/27/2012 M&T Bank Corporation (MTB) $10.26 $9.71 12/31/2014 5.63% 12.61%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ TWGP 01/06/2014 ACP Re Ltd. (N/A) All Cash $172.1 $2.50 $1.83 336,260 11/15/2014 36.61% 114.22%
+ FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) All Stock $17.9 million $4.05 $3.68 13,708 12/31/2014 10.18% 22.79%
+ LO 07/15/2014 Reynolds American Inc. (RAI) Cash Plus Stock $27.4 billion $67.56 $61.68 6,863,311 06/30/2015 9.54% 10.12%
+ DTV 05/18/2014 AT&T, Inc. (T) Special Conditions $48.5 billion $95.00 $86.96 3,308,647 05/31/2015 9.25% 10.75%
+ OABC 04/29/2014 Southside Bancshares Inc. (SBSI) Cash Plus Stock $307 million $26.06 $24.23 27,235 12/31/2014 7.54% 16.88%
+ MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) All Cash $693 million $22.60 $21.05 565,783 09/30/2014 7.36% 37.85%
+ COV 06/15/2014 Medtronic, Inc. (MDT) Cash Plus Stock $42.9 billion $94.81 $88.53 5,292,328 01/31/2015 7.09% 13.34%
+ OVRL 05/15/2014 Sphere 3D Corporation (ANY) All Stock $81.13 million $4.59 $4.30 14,501 09/30/2014 6.75% 34.70%
+ IGT 07/16/2014 GTECH S.p.A. (GTKYY) Special Conditions $6.4 billion $18.25 $17.15 18,448,152 06/30/2015 6.41% 6.81%
+ HCBK 08/27/2012 M&T Bank Corporation (MTB) All Stock $3.7 billion $10.26 $9.71 4,391,260 12/31/2014 5.63% 12.61%
+ TWC 02/13/2014 Comcast Corporation (CMCSA) All Stock $45.2 billion $156.80 $148.46 1,623,599 12/31/2014 5.62% 12.58%
+ CHRM 05/19/2014 Engadin Parent Limited (N/A) Special Conditions N/A $4.70 $4.50 6,143 09/30/2014 4.44% 22.85%
+ SPCHA 06/30/2014 Vestis Retail Group, LLC (N/A) All Cash N/A $1.20 $1.15 5,959 09/30/2014 4.35% 22.35%
+ SWY 03/06/2014 AB Acquisition LLC (N/A) Special Conditions N/A $36.15 $34.76 9,563,354 12/31/2014 4.00% 8.95%
+ FRNK 07/15/2014 Towne Bank (TOWN) All Stock $275 million $21.60 $20.89 31,679 12/31/2014 3.41% 7.63%
+ SUSS 04/28/2014 Energy Transfer Partners, L.P. (ETP) All Stock $1.8 billion $82.38 $79.94 180,470 09/30/2014 3.05% 15.69%
+ NED 04/02/2014 Rainbow Education Holding Limited (N/A) All Cash N/A $2.85 $2.77 1,600 08/15/2014 2.89% 42.17%
+ THRD 06/04/2014 National Penn Bancshares Inc. (NPBC) All Stock $138 million $43.00 $41.80 76 12/31/2014 2.88% 6.44%
+ QCOR 04/07/2014 Mallinckrodt plc (MNK) Cash Plus Stock $5.6 billion $97.37 $95.01 1,453,025 09/30/2014 2.49% 12.79%
+ SPBC 05/05/2014 Green Bank (N/A) All Cash $46.2 million $29.55 $28.85 100 09/30/2014 2.43% 12.47%
+ PTEK 04/30/2014 Multimedia Games, Inc. (N/A) All Cash N/A $1.35 $1.32 6,518 12/31/2014 2.27% 5.09%
+ FFCO 04/14/2014 CB Financial Services, Inc. (CBFV) All Stock 54.5 million $22.37 $21.90 666 11/15/2014 2.14% 6.68%
+ GECR 06/23/2014 State Bank Financial Corporation (STBZ) Special Conditions $82 million $22.35 $21.91 459 03/31/2015 2.01% 2.90%
+ LSBI 06/04/2014 Old National Bancorp. (ONB) Cash Plus Stock $66.7 million $42.10 $41.28 N/A 12/31/2014 1.99% 4.45%
+ FUBC 05/08/2014 Valley National Bancorp (VLY) All Stock $312 million $8.65 $8.49 71,118 10/31/2014 1.89% 6.78%
+ IDIX 06/09/2014 Merck & Co. Inc. (MRK) All Cash $3.85 billion $24.50 $24.06 2,517,137 09/30/2014 1.83% 9.40%
+ OBAF 04/08/2014 F.N.B. Corporation (FNB) All Stock $94 million $21.84 $21.52 1,466 09/30/2014 1.46% 7.53%
+ DCIN 05/15/2014 Carmike Cinemas Inc. (CKEC) All Stock N/A $5.77 $5.69 17,553 09/30/2014 1.45% 7.44%
+ FWLT 02/13/2014 AMEC PLC (AMCBF) Cash Plus Stock $3.3 billion $34.38 $33.97 208,470 12/31/2014 1.22% 2.72%
+ TWTC 06/16/2014 Level 3 Communications, Inc. (LVLT) Cash Plus Stock $7.3 billion $42.44 $41.96 2,180,221 12/31/2014 1.14% 2.55%
+ EDS 12/02/2013 Pan Long Company Limited (N/A) All Cash $60.1 million $1.78 $1.76 5,200 07/30/2014 1.14% 46.09%
+ NOVB 01/21/2014 TriCo Bancshares (TCBK) All Stock $178.4 million $21.54 $21.31 29,761 09/30/2014 1.06% 5.44%
+ TQNT 02/24/2014 RF Micro Devices Inc. (RFMD) All Stock $1.6 billion $17.20 $17.03 4,932,155 12/31/2014 1.01% 2.26%
+ TEG 06/23/2014 Wisconsin Energy Corp. (WEC) Cash Plus Stock $9.1 billion $69.77 $69.14 337,056 06/30/2015 0.91% 0.96%
+ ROC 07/15/2014 Albemarle Corporation (ALB) Cash Plus Stock $6.2 billion $84.37 $83.61 1,537,980 03/31/2015 0.91% 1.31%
+ PL 06/03/2014 Dai-ichi Life Insurance Company (N/A) All Cash $5.7 billion $70.00 $69.39 773,299 01/31/2015 0.88% 1.65%
+ GA 03/16/2014 Giant Investment Limited (�Parent�) and Giant Merger Limited (N/A) All Cash $3 billion $12.00 $11.92 5,423,772 12/31/2014 0.67% 1.50%
+ ZIPR 07/15/2014 Realogy Holdings Corp. (RLGY) All Cash $166 million $6.75 $6.705 1,027,397 09/30/2014 0.67% 3.45%
+ ENVE 06/30/2014 Consolidated Communications Holdings Inc. (CNSL) All Stock $350 million $16.08 $16.00 25,659 12/31/2014 0.53% 1.18%
+ NDZ 03/28/2014 Sterigenics (N/A) All Cash $727 million $13.00 $12.94 1,204,037 12/31/2014 0.46% 1.04%
+ MEAS 06/18/2014 TE Connectivity Ltd. (TEL) All Cash $1.7 billion $86.00 $85.62 138,996 12/31/2014 0.44% 0.99%
+ HCT 06/02/2014 Ventas, Inc. (VTR) All Stock $2.6 billion $10.93 $10.88 2,141,542 12/31/2014 0.43% 0.96%
+ HSH 07/02/2014 Tyson Foods, Inc. (TSN) All Cash $8.55 billion $63.00 $62.76 2,323,946 09/27/2014 0.38% 2.05%
+ MCRS 06/23/2014 Oracle Corporation (ORCL) All Cash $4.6 billion $68.00 $67.81 2,768,056 12/31/2014 0.28% 0.63%
+ RDA 11/11/2013 Tsinghua Unigroup Ltd. (N/A) All Cash $910 million $18.50 $18.45 4,401,943 08/08/2014 0.27% 5.50%
+ URS 07/13/2014 AECOM Technology Corporation (ACM) Cash Plus Stock $6 billion $59.00 $58.85 2,755,821 10/31/2014 0.25% 0.90%
+ ESC 02/20/2014 Brookdale Senior Living Inc. (BKD) All Stock $2.8 billion $33.74 $33.66 385,064 09/30/2014 0.25% 1.28%
+ PLXT 06/24/2014 Avago Technologies Limited (AVGO) All Cash $293 million $6.50 $6.485 335,782 11/03/2014 0.23% 0.80%
+ SGK 03/17/2014 Matthews International Corporation (MATW) Cash Plus Stock $577 million $20.68 $20.65 33,730 09/30/2014 0.13% 0.67%
+ VITC 07/02/2014 The Kroger Co. (KR) All Cash $280 million $8.00 $7.99 315,061 09/30/2014 0.13% 0.64%
+ TAYC 07/15/2013 MB Financial Inc. (MBFI) Cash Plus Stock $680 million $21.46 $21.43 84,386 09/30/2014 0.12% 0.62%
+ DFZ 05/02/2014 Mill Road Capital (N/A) All Cash $215 million $19.00 $18.98 44,869 09/30/2014 0.11% 0.54%
+ HITT 06/09/2014 Analog Devices, Inc. (ADI) All Cash $2 billion $78.00 $77.92 644,386 09/30/2014 0.10% 0.53%
+ FIO 06/16/2014 SanDisk Corp. (SNDK) All Cash $1.1 billion $11.25 $11.24 1,437,051 09/30/2014 0.09% 0.46%
+ OPEN 06/13/2014 The Priceline Group Inc. (PCLN) All Cash $2.6 billion $103.00 $102.99 450,873 09/30/2014 0.01% 0.05%
+ LIN 03/22/2014 Media General, Inc. (MEG) Special Conditions $2.6 billion $27.82 $27.85 69,215 03/31/2015 -0.11% -0.16%
+ ARX 05/20/2014 Cobham plc (N/A) All Cash $1.46 billion $10.50 $10.52 99,805 09/30/2014 -0.19% -0.98%
+ MDCI 06/25/2014 Owens & Minor, Inc. (OMI) All Cash $208 million $13.80 $13.83 255,164 12/31/2014 -0.22% -0.49%
+ EQU 12/09/2013 Petroflow Energy Corporation (N/A) All Cash $230 million $5.43 $5.45 396,949 07/31/2014 -0.37% -13.39%
+ UNS 12/11/2013 Fortis, Inc. (N/A) All Cash $4.3 billion $60.25 $60.49 272,613 12/31/2014 -0.40% -0.89%
+ POM 04/30/2014 Exelon Corporation (EXC) All Cash $7.2 billion $27.25 $27.39 1,374,694 09/30/2015 -0.51% -0.43%
+ SWS 04/01/2014 Hilltop Holdings Inc. (HTH) Cash Plus Stock $260 million $7.22 $7.26 67,489 12/31/2014 -0.60% -1.34%
+ ISS 06/06/2013 Mr. Tianwen Liu, the Company’s CEO and the chairman of its Board of Directors, and ChinaAMC Capital Management Limited (N/A) All Cash N/A $5.45 $5.49 442,381 09/30/2014 -0.73% -3.75%
+ KOG 07/13/2014 Whiting Petroleum Corp. (WLL) All Stock $6 billion $15.57 $16.01 7,591,476 12/31/2014 -2.73% -6.12%
+ AUXL 06/26/2014 QLT Inc. (QLTI) All Stock N/A $18.03 $19.24 1,037,137 12/31/2014 -6.28% -14.07%
+ CHDX 02/17/2014 a buyer consortium (the “Buyer Consortium”) of an affiliate of TPG (together with its affiliates, “TPG”), an affiliate of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun”), and Ms. Roberta Lipson, the CEO of the Company (N/A) All Cash $369 million $19.50 $23.48 185,156 12/31/2014 -16.95% -37.96%

Voluntary Disclosure: I hold a long position in Safeway (SWY).

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria




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