Merger Arbitrage Mondays – August 4, 2014

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August 3, 2014 | Merger Arbitrage | | Author Asif

Merger Activity decreased last week with four 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 101
Total Number of Deals Not Completed in 2014 2
Total Number of Pending Deals
Cash Deals 24
Stock Deals 19
Stock & Cash Deals 13
Special Conditions 7
Total Number of Pending Deals 63
Total Deal Size $465.66 billion

New Deals:

  1. The acquisition of Family Dollar Stores (FDO) by Dollar Tree (DLTR) for $9.2 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Family Dollar Stores will receive $59.60 in cash and $14.90 in Dollar Tree stock. The stock portion will be subject to a collar such that Family Dollar shareholders will receive 0.2484 Dollar Tree shares if the average Dollar Tree trading price during a specified period preceding closing is equal to or greater than $59.98 and 0.3036 Dollar Tree shares if this average trading price is less than or equal to $49.08. If the average trading price of Dollar Tree stock during this period is between $49.08 and $59.98, Family Dollar shareholders will receive a number of shares between 0.2484 and 0.3036 equal to $14.90 in value. On account of the collar, we are treating this deal as a cash deal that is worth $74.50/share.
  2. The acquisition of Trulia (TRLA) by Zillow (Z) for $3.5 billion in an all stock deal. Under the terms of the agreement, shareholders of Trulia will receive 0.444 Class A Common Stock of Zillow for each share of Trulia.
  3. The acquisition of GFI Group (GFIG) by the CME Group in a two step transaction. CME Group will first acquire all of the outstanding shares of GFI Group in exchange for $4.55 per share in CME Group Class A Common Stock. Immediately following the acquisition of GFI Group, a private consortium of GFI Group management, led by current Executive Chairman Michael Gooch, CEO Colin Heffron and Managing Director Nick Brown, will acquire GFI Group’s wholesale brokerage and clearing businesses for $165M in cash and the assumption, at closing, of approximately $63M of unvested deferred compensation and other liabilities. After completion of the transaction, the wholesale brokerage business, including the Kyte Group, will continue as a private company with its management and operations largely unchanged.
  4. The acquisition of Bally Technologies (BYI) by Scientific Games Corporation (SGMS) for $5.1 billion or $83.30 per share in cash.
  5. The acquisition of Intervest Bancshares (IBCA) by Bank of the Ozarks (OZRK) for $228.5 million in an all stock deal. The number of Company shares to be issued will be determined based on the Company’s ten day average closing stock price as of the fifth business day prior to the closing date, subject to a minimum and maximum price of $23.95 and $39.91, respectively.

Closed Deals:

  1. The acquisition of Noah Education Holdings (NED) by Rainbow Education Holding Limited on July 30, 2014. It took 119 days for this deal to be completed.
  2. The acquisition of Schawk (SGK) by Matthews International Corporation (MATW) on July 30, 2014. It took 135 days for this deal to be completed.
  3. The acquisition of Equal Energy (EQU) by Petroflow Energy Corporation on July 31, 2014. It took 234 days for this deal to be completed.
  4. The acquisition of Emeritus (ESC) by Brookdale Senior Living (BKD) on July 31, 2014. It took 161 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 $2.16 11/15/2014 15.74% 55.78%
OVRL 05/15/2014 Sphere 3D Corporation (ANY) $3.43 $3.09 09/30/2014 11.04% 70.71%
LO 07/15/2014 Reynolds American Inc. (RAI) $66.72 $60.39 06/30/2015 10.48% 11.59%
DTV 05/18/2014 AT&T, Inc. (T) $95.00 $86.11 05/31/2015 10.32% 12.56%
SPCHA 06/30/2014 Vestis Retail Group, LLC (N/A) $1.20 $1.095 09/30/2014 9.59% 61.40%
IGT 07/16/2014 GTECH S.p.A. (GTKYY) $18.25 $16.78 06/30/2015 8.76% 9.69%
EDS 12/02/2013 Pan Long Company Limited (N/A) $1.78 $1.64 07/30/2014 8.54% -623.17%
COV 06/15/2014 Medtronic, Inc. (MDT) $93.96 $86.93 01/31/2015 8.09% 16.41%
LIN 03/22/2014 Media General, Inc. (MEG) $27.82 $25.81 03/31/2015 7.79% 11.89%
BYI 08/01/2014 Scientific Games Corporation (SGMS) $83.30 $77.70 01/31/2015 7.21% 14.61%

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 $2.16 245,222 11/15/2014 15.74% 55.78%
+ OVRL 05/15/2014 Sphere 3D Corporation (ANY) All Stock $81.13 million $3.43 $3.09 64,597 09/30/2014 11.04% 70.71%
+ LO 07/15/2014 Reynolds American Inc. (RAI) Cash Plus Stock $27.4 billion $66.72 $60.39 3,155,940 06/30/2015 10.48% 11.59%
+ DTV 05/18/2014 AT&T, Inc. (T) Special Conditions $48.5 billion $95.00 $86.11 1,884,452 05/31/2015 10.32% 12.56%
+ SPCHA 06/30/2014 Vestis Retail Group, LLC (N/A) All Cash N/A $1.20 $1.095 25,337 09/30/2014 9.59% 61.40%
+ IGT 07/16/2014 GTECH S.p.A. (GTKYY) Special Conditions $6.4 billion $18.25 $16.78 7,926,705 06/30/2015 8.76% 9.69%
+ EDS 12/02/2013 Pan Long Company Limited (N/A) All Cash $60.1 million $1.78 $1.64 10,381 07/30/2014 8.54% 0.00%
+ COV 06/15/2014 Medtronic, Inc. (MDT) Cash Plus Stock $42.9 billion $93.96 $86.93 3,207,542 01/31/2015 8.09% 16.41%
+ LIN 03/22/2014 Media General, Inc. (MEG) Special Conditions $2.6 billion $27.82 $25.81 235,667 03/31/2015 7.79% 11.89%
+ BYI 08/01/2014 Scientific Games Corporation (SGMS) All Cash $5.1 billion $83.30 $77.70 18,887,704 01/31/2015 7.21% 14.61%
+ OABC 04/29/2014 Southside Bancshares Inc. (SBSI) Cash Plus Stock $307 million $26.13 $24.55 20,437 12/31/2014 6.44% 15.78%
+ FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) All Stock $17.9 million $3.96 $3.72 58 09/19/2014 6.32% 50.14%
+ TWC 02/13/2014 Comcast Corporation (CMCSA) All Stock $45.2 billion $153.50 $145.88 1,392,047 12/31/2014 5.22% 12.79%
+ CHRM 05/19/2014 Engadin Parent Limited (N/A) Special Conditions N/A $4.70 $4.47 63,500 09/30/2014 5.15% 32.95%
+ TRLA 07/28/2014 Zillow, Inc. (Z) All Stock $3.5 billion $63.45 $60.48 1,696,478 03/31/2015 4.91% 7.49%
+ SWY 03/06/2014 AB Acquisition LLC (N/A) Special Conditions N/A $36.15 $34.46 1,367,730 12/31/2014 4.90% 12.01%
+ QRE 07/24/2014 Breitburn Energy Partners L.P. (BBEP) All Stock $3 billion $20.71 $19.79 466,604 01/31/2015 4.64% 9.40%
+ HCBK 08/27/2012 M&T Bank Corporation (MTB) All Stock $3.7 billion $10.08 $9.63 1,835,295 12/31/2014 4.63% 11.35%
+ MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) All Cash $693 million $22.60 $21.60 849,486 09/30/2014 4.63% 29.65%
+ TQNT 02/24/2014 RF Micro Devices Inc. (RFMD) All Stock $1.6 billion $19.08 $18.37 3,237,700 12/31/2014 3.86% 9.44%
+ FFCO 04/14/2014 CB Financial Services, Inc. (CBFV) All Stock 54.5 million $22.31 $21.51 1,988 11/15/2014 3.72% 13.19%
+ IMCB 07/23/2014 Columbia Banking System Inc. (COLB) Cash Plus Stock $121.5 million $18.44 $17.80 362 12/31/2014 3.57% 8.74%
+ FRNK 07/15/2014 Towne Bank (TOWN) All Stock $275 million $20.36 $19.69 25,117 12/31/2014 3.38% 8.29%
+ TEG 06/23/2014 Wisconsin Energy Corp. (WEC) Cash Plus Stock $9.1 billion $68.22 $66.14 590,867 06/30/2015 3.15% 3.48%
+ QCOR 04/07/2014 Mallinckrodt plc (MNK) Cash Plus Stock $5.6 billion $92.69 $89.99 2,248,644 09/30/2014 3.00% 19.22%
+ FWLT 02/13/2014 AMEC PLC (AMCBF) Cash Plus Stock $3.3 billion $33.59 $32.72 367,037 12/31/2014 2.66% 6.52%
+ THRD 06/04/2014 National Penn Bancshares Inc. (NPBC) All Stock $138 million $42.83 $41.77 376 12/31/2014 2.54% 6.23%
+ ENVE 06/30/2014 Consolidated Communications Holdings Inc. (CNSL) All Stock $350 million $16.66 $16.25 28,161 12/31/2014 2.53% 6.21%
+ DCIN 05/15/2014 Carmike Cinemas Inc. (CKEC) All Stock N/A $5.62 $5.49 15,517 09/30/2014 2.33% 14.92%
+ GECR 06/23/2014 State Bank Financial Corporation (STBZ) Special Conditions $82 million $22.35 $21.85 2,353 03/31/2015 2.29% 3.49%
+ PTEK 04/30/2014 Multimedia Games, Inc. (N/A) All Cash N/A $1.35 $1.32 5,286 12/31/2014 2.27% 5.57%
+ GFIG 07/30/2014 CME Group (N/A) All Cash N/A $4.55 $4.46 1,218,050 01/31/2015 2.02% 4.09%
+ FUBC 05/08/2014 Valley National Bancorp (VLY) All Stock $312 million $8.48 $8.32 51,174 10/31/2014 1.94% 8.06%
+ SPBC 05/05/2014 Green Bank (N/A) All Cash $46.2 million $29.55 $28.99 300 09/30/2014 1.93% 12.37%
+ KOG 07/13/2014 Whiting Petroleum Corp. (WLL) All Stock $6 billion $14.94 $14.72 9,289,695 12/31/2014 1.49% 3.64%
+ LSBI 06/04/2014 Old National Bancorp. (ONB) Cash Plus Stock $66.7 million $40.76 $40.18 1,020 12/31/2014 1.45% 3.55%
+ DFZ 05/02/2014 Mill Road Capital (N/A) All Cash $215 million $19.00 $18.76 43,430 09/30/2014 1.28% 8.19%
+ URS 07/13/2014 AECOM Technology Corporation (ACM) Cash Plus Stock $6 billion $58.02 $57.34 2,130,745 10/31/2014 1.19% 4.93%
+ SUSS 04/28/2014 Energy Transfer Partners, L.P. (ETP) All Stock $1.8 billion $81.44 $80.54 243,727 09/30/2014 1.11% 7.13%
+ NOVB 01/21/2014 TriCo Bancshares (TCBK) All Stock $178.4 million $20.81 $20.59 9,903 09/30/2014 1.06% 6.82%
+ ROC 07/15/2014 Albemarle Corporation (ALB) Cash Plus Stock $6.2 billion $80.31 $79.52 2,568,879 03/31/2015 0.99% 1.51%
+ PL 06/03/2014 Dai-ichi Life Insurance Company (N/A) All Cash $5.7 billion $70.00 $69.36 1,422,493 01/31/2015 0.92% 1.87%
+ POM 04/30/2014 Exelon Corporation (EXC) All Cash $7.2 billion $27.25 $27.01 1,731,651 09/30/2015 0.89% 0.77%
+ NDZ 03/28/2014 Sterigenics (N/A) All Cash $727 million $13.00 $12.94 240,518 12/31/2014 0.46% 1.14%
+ OBAF 04/08/2014 F.N.B. Corporation (FNB) All Stock $94 million $21.53 $21.44 331 09/30/2014 0.43% 2.76%
+ MCRS 06/23/2014 Oracle Corporation (ORCL) All Cash $4.6 billion $68.00 $67.74 2,247,737 12/31/2014 0.38% 0.94%
+ ZIPR 07/15/2014 Realogy Holdings Corp. (RLGY) All Cash $166 million $6.75 $6.73 100,938 09/30/2014 0.30% 1.90%
+ HSH 07/02/2014 Tyson Foods, Inc. (TSN) All Cash $8.55 billion $63.00 $62.83 1,837,934 09/27/2014 0.27% 1.83%
+ VITC 07/02/2014 The Kroger Co. (KR) All Cash $280 million $8.00 $7.98 134,601 09/30/2014 0.25% 1.60%
+ IDIX 06/09/2014 Merck & Co. Inc. (MRK) All Cash $3.85 billion $24.50 $24.44 1,390,841 09/30/2014 0.25% 1.57%
+ HCT 06/02/2014 Ventas, Inc. (VTR) All Stock $2.6 billion $10.75 $10.72 1,480,371 12/31/2014 0.24% 0.59%
+ MDCI 06/25/2014 Owens & Minor, Inc. (OMI) All Cash $208 million $13.80 $13.78 59,571 12/31/2014 0.15% 0.36%
+ PLXT 06/24/2014 Avago Technologies Limited (AVGO) All Cash $293 million $6.50 $6.50 241,483 11/03/2014 0.00% 0.00%
+ MEAS 06/18/2014 TE Connectivity Ltd. (TEL) All Cash $1.7 billion $86.00 $86.02 139,902 12/31/2014 -0.02% -0.06%
+ TWTC 06/16/2014 Level 3 Communications, Inc. (LVLT) Cash Plus Stock $7.3 billion $40.24 $40.30 764,106 12/31/2014 -0.15% -0.36%
+ ARX 05/20/2014 Cobham plc (N/A) All Cash $1.46 billion $10.50 $10.52 86,305 09/30/2014 -0.19% -1.22%
+ TAYC 07/15/2013 MB Financial Inc. (MBFI) Cash Plus Stock $680 million $21.08 $21.15 51,342 09/30/2014 -0.32% -2.03%
+ UNS 12/11/2013 Fortis, Inc. (N/A) All Cash $4.3 billion $60.25 $60.46 358,382 12/31/2014 -0.35% -0.85%
+ FDO 07/28/2014 Dollar Tree, Inc. (DLTR) Special Conditions $9.2 billion $74.50 $75.85 3,210,929 01/31/2015 -1.78% -3.61%
+ 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 $5.58 61,866 09/30/2014 -2.33% -14.92%
+ SWS 04/01/2014 Hilltop Holdings Inc. (HTH) Cash Plus Stock $260 million $7.03 $7.20 131,322 12/31/2014 -2.37% -5.81%
+ AUXL 06/26/2014 QLT Inc. (QLTI) All Stock N/A $18.44 $19.56 842,551 12/31/2014 -5.73% -14.04%
+ 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 $23.47 82,686 12/31/2014 -16.92% -41.44%

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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