Merger Arbitrage Mondays – September 15, 2014

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September 14, 2014 | Merger Arbitrage | | Author Asif

Merger Activity increased last week with six new mergers announced and one deal 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 116
Total Number of Deals Not Completed in 2014 2
Total Number of Pending Deals
Cash Deals 24
Stock Deals 20
Stock & Cash Deals 15
Special Conditions 8
Total Number of Pending Deals 67
Total Deal Size $487.49 billion

New Deals:

  1. The acquisition of Multimedia Games Holding Company (MGAM) by Global Cash Access Holdings (GCA) for $1.2 billion or $36.50 per share in cash.
  2. The acquisition of The Bank of Kentucky Financial Corporation (BKYF) by BB&T Corporation (BBT) in a cash plus stock deal. Under the terms of the agreement, shareholders of The Bank of Kentucky Financial Corporation will receive 1.0126 shares of BB&T common stock and $9.40 of cash for each share of The Bank of Kentucky stock.
  3. The acquisition of Annie’s (BNNY) by General Mills (GIS) for $820 million or $46.00 per share in cash.
  4. The acquisition of Colonial Financial Services (COBK) by Cape Bancorp (CBNJ) for $55 million in a cash or stock deal. Under the terms of the agreement, shareholders of Colonial Financial Services will be entitled to elect to receive either $14.50 per share in cash or 1.412 shares of Cape’s common stock, subject to 50% of the shares being exchanged for stock and 50% for cash. We are treating this as an all-stock deal.
  5. The acquisition of Taminco Corporation (TAM) by Eastman Chemical (EMN) for $2.8 billion or $26.00 per share in cash.
  6. The acquisition of Conversant (CNVR) by Alliance Data Systems Corporation (ADS) in a cash or stock deal. Under the terms of the transaction, the consideration to be received by Conversant shareholders is valued at $35 per share. The offer comprises 52% stock and 48% cash, which is equal to $18.20 per share of Alliance Data stock (based on a fixed exchange ratio of 0.07037) and $16.80 per share of cash to Conversant shareholders. The exchange ratio of 0.07037 that determines the aggregate stock consideration will remain fixed at close. The cash portion of the aggregate consideration floats within a 10% symmetrical collar that provides for a minimum of $14.98 per share (at $284 per share of Alliance Data stock) up to a maximum of $18.62 per share (at a $233 price per share of Alliance Data stock) – equaling $35.00 of total value within the collar. If such average Alliance Data stock price is outside of the collar range, Conversant shareholders will receive in the aggregate (i) 0.07037 shares of Alliance Data stock, and (ii) either the minimum $14.98 per share of cash above $284 or the maximum $18.62 of cash below $233. The final target Alliance Data share price used to calculate the collar and cash consideration mix will be based on the 15 day volume weighted average price of Alliance Data stock as of the second day prior to closing. Conversant shareholders may elect to receive (i) all cash, (ii) all stock (each subject to proration in the event of oversubscription), or (iii) the aggregate mix of consideration. We are tracking this deal as an all cash deal priced at $35.

Deal Updates:

  1. On September 9, 2014, Interdealer broker BGC Partners launched a $675 million hostile bid for rival GFI Group (GFIG), topping an agreed offer from exchange operator CME Group Inc.
  2. On September 11, 2014, after being rejected twice, Dollar General Corporation (DG) went hostile and initiated a tender offer of $80.00 per share to shareholders of Family Dollar Stores (FDO).

Closed Deals:

  1. The acquisition of MICROS Systems (MCRS) by Oracle Corporation (ORCL) on September 9, 2014. It took 78 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

LO 07/15/2014 Reynolds American Inc. (RAI) $67.20 $59.08 06/30/2015 13.74% 17.41%
TWGP 01/06/2014 ACP Re Ltd. (N/A) $2.50 $2.23 11/15/2014 12.11% 72.45%
LIN 03/22/2014 Media General, Inc. (MEG) $25.97 $23.37 03/31/2015 11.13% 20.61%
DTV 05/18/2014 AT&T, Inc. (T) $95.00 $86.85 05/31/2015 9.38% 13.28%
OABC 04/29/2014 Southside Bancshares Inc. (SBSI) $27.62 $25.44 12/31/2014 8.56% 29.19%
MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) $22.60 $20.85 09/30/2014 8.39% 204.24%
IGT 07/16/2014 GTECH S.p.A. (GTKYY) $18.25 $16.89 06/30/2015 8.05% 10.20%
COV 06/15/2014 Medtronic, Inc. (MDT) $97.51 $90.67 01/31/2015 7.55% 19.96%
TWC 02/13/2014 Comcast Corporation (CMCSA) $164.11 $154.31 12/31/2014 6.35% 21.65%
TRLA 07/28/2014 Zillow, Inc. (Z) $56.80 $54.19 03/31/2015 4.81% 8.91%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ LO 07/15/2014 Reynolds American Inc. (RAI) Cash Plus Stock $27.4 billion $67.20 $59.08 1,031,524 06/30/2015 13.74% 17.41%
+ TWGP 01/06/2014 ACP Re Ltd. (N/A) All Cash $172.1 million $2.50 $2.23 1,360,428 11/15/2014 12.11% 72.45%
+ LIN 03/22/2014 Media General, Inc. (MEG) Special Conditions $2.6 billion $25.97 $23.37 126,117 03/31/2015 11.13% 20.61%
+ DTV 05/18/2014 AT&T, Inc. (T) Special Conditions $48.5 billion $95.00 $86.85 2,049,358 05/31/2015 9.38% 13.28%
+ OABC 04/29/2014 Southside Bancshares Inc. (SBSI) Cash Plus Stock $307 million $27.62 $25.44 11,490 12/31/2014 8.56% 29.19%
+ MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) All Cash $693 million $22.60 $20.85 463,762 09/30/2014 8.39% 204.24%
+ IGT 07/16/2014 GTECH S.p.A. (GTKYY) Special Conditions $6.4 billion $18.25 $16.89 1,413,692 06/30/2015 8.05% 10.20%
+ COV 06/15/2014 Medtronic, Inc. (MDT) Cash Plus Stock $42.9 billion $97.51 $90.67 2,031,821 01/31/2015 7.55% 19.96%
+ TWC 02/13/2014 Comcast Corporation (CMCSA) All Stock $45.2 billion $164.11 $154.31 1,324,824 12/31/2014 6.35% 21.65%
+ TRLA 07/28/2014 Zillow, Inc. (Z) All Stock $3.5 billion $56.80 $54.19 1,241,068 03/31/2015 4.81% 8.91%
+ SWY 03/06/2014 AB Acquisition LLC (N/A) Special Conditions N/A $36.15 $34.50 1,166,911 12/31/2014 4.78% 16.31%
+ EDS 12/02/2013 Pan Long Company Limited (N/A) All Cash $60.1 million $1.78 $1.70 46,765 09/30/2014 4.71% 114.51%
+ HCBK 08/27/2012 M&T Bank Corporation (MTB) All Stock $3.7 billion $10.58 $10.13 2,314,895 12/31/2014 4.47% 15.25%
+ OVRL 05/15/2014 Sphere 3D Corporation (ANY) All Stock $81.13 million $3.43 $3.282 68,170 09/30/2014 4.39% 106.83%
+ BYI 08/01/2014 Scientific Games Corporation (SGMS) All Cash $5.1 billion $83.30 $80.26 663,049 01/31/2015 3.79% 10.02%
+ QRE 07/24/2014 Breitburn Energy Partners L.P. (BBEP) All Stock $3 billion $21.41 $20.63 308,994 01/31/2015 3.77% 9.96%
+ FFCO 04/14/2014 CB Financial Services, Inc. (CBFV) All Stock 54.5 million $22.72 $21.90 498 11/15/2014 3.73% 22.31%
+ FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) All Stock $17.9 million $3.99 $3.85 3,705 09/19/2014 3.72% 339.64%
+ ENVE 06/30/2014 Consolidated Communications Holdings Inc. (CNSL) All Stock $350 million $18.42 $17.82 35,139 12/31/2014 3.35% 11.41%
+ PTEK 04/30/2014 Multimedia Games, Inc. (N/A) All Cash N/A $1.35 $1.31 2,315 12/31/2014 3.05% 10.42%
+ TEG 06/23/2014 Wisconsin Energy Corp. (WEC) Cash Plus Stock $9.1 billion $68.34 $66.59 206,431 06/30/2015 2.62% 3.32%
+ CPWR 09/02/2014 Thoma Bravo, LLC (N/A) All Cash $2.5 billion $10.92 $10.65 5,953,938 01/31/2015 2.54% 6.71%
+ EPB 08/10/2014 Kinder Morgan, Inc. (KMI) Cash Plus Stock N/A $40.34 $39.49 1,892,793 12/31/2014 2.14% 7.32%
+ FRNK 07/15/2014 Towne Bank (TOWN) All Stock $275 million $19.99 $19.58 26,489 12/31/2014 2.10% 7.18%
+ SPBC 05/05/2014 Green Bank (N/A) All Cash $46.2 million $29.55 $29.01 7,825 09/30/2014 1.86% 45.29%
+ PEOP 08/05/2014 Independent Bank Corp. (INDB) All Stock $130.6 million $20.81 $20.43 6,347 03/31/2015 1.84% 3.40%
+ BKYF 09/08/2014 BB&T Corporation (BBT) Cash Plus Stock $363 million $48.04 $47.21 44,062 03/31/2015 1.76% 3.26%
+ KMP 08/10/2014 Kinder Morgan, Inc. (KMI) Cash Plus Stock N/A $93.58 $91.98 1,930,687 12/31/2014 1.74% 5.94%
+ CHRM 05/19/2014 Engadin Parent Limited (N/A) Special Conditions N/A $4.70 $4.62 5,888 09/30/2014 1.73% 42.14%
+ THRD 06/04/2014 National Penn Bancshares Inc. (NPBC) All Stock $138 million $43.42 $42.70 14,047 12/31/2014 1.70% 5.78%
+ GECR 06/23/2014 State Bank Financial Corporation (STBZ) Special Conditions $82 million $22.35 $22.00 N/A 03/31/2015 1.59% 2.95%
+ KMR 08/10/2014 Kinder Morgan, Inc. (KMI) All Stock N/A $93.83 $92.42 740,260 12/31/2014 1.53% 5.20%
+ NBTF 08/04/2014 Peoples Bancorp Inc. (PEBO) Cash Plus Stock $109 million $30.41 $30.00 11,248 03/31/2015 1.38% 2.56%
+ FWLT 02/13/2014 AMEC PLC (AMCBF) Cash Plus Stock $3.3 billion $32.02 $31.59 184,429 12/31/2014 1.35% 4.60%
+ FRF 08/12/2014 Tiptree Financial Inc. (TIPT) All Cash $218 million $10.00 $9.88 120,019 01/31/2015 1.21% 3.21%
+ NOVB 01/21/2014 TriCo Bancshares (TCBK) All Stock $178.4 million $22.65 $22.40 6,410 09/30/2014 1.11% 27.01%
+ FUBC 05/08/2014 Valley National Bancorp (VLY) All Stock $312 million $8.91 $8.82 79,658 10/31/2014 1.01% 8.00%
+ KOG 07/13/2014 Whiting Petroleum Corp. (WLL) All Stock $6 billion $14.78 $14.64 2,730,053 12/31/2014 0.99% 3.37%
+ PSMI 08/22/2014 Murata Electronics North America, Inc. (N/A) All Cash $471 million $12.50 $12.39 277,935 01/31/2015 0.89% 2.35%
+ IRF 08/20/2014 Infineon Technologies AG (IFNNY) All Cash $2.4 billion $40.00 $39.66 1,300,184 01/31/2015 0.86% 2.27%
+ TQNT 02/24/2014 RF Micro Devices Inc. (RFMD) All Stock $1.6 billion $20.33 $20.18 2,228,516 12/31/2014 0.77% 2.61%
+ TWTC 06/16/2014 Level 3 Communications, Inc. (LVLT) Cash Plus Stock $7.3 billion $41.26 $40.95 1,742,327 12/31/2014 0.76% 2.60%
+ PL 06/03/2014 Dai-ichi Life Insurance Company (N/A) All Cash $5.7 billion $70.00 $69.60 441,997 01/31/2015 0.57% 1.52%
+ CNVR 09/11/2014 Alliance Data Systems Corporation (ADS) Special Conditions $2.3 billion $35.00 $34.80 13,886,250 12/31/2014 0.57% 1.96%
+ POM 04/30/2014 Exelon Corporation (EXC) All Cash $7.2 billion $27.25 $27.10 1,203,903 09/30/2015 0.55% 0.53%
+ PIKE 08/04/2014 Court Square Capital Partners & J. Eric Pike, the Company�s Chairman and Chief Executive Officer (N/A) All Cash N/A $12.00 $11.96 110,024 12/31/2014 0.33% 1.14%
+ ITMN 08/24/2014 Roche (N/A) All Cash $8.3 billion $74.00 $73.78 2,709,869 12/31/2014 0.30% 1.02%
+ BOLT 09/03/2014 Teledyne Technologies Inc. (TDY) All Cash $171 million $22.00 $21.94 73,506 12/31/2014 0.27% 0.93%
+ OBAF 04/08/2014 F.N.B. Corporation (FNB) All Stock $94 million $22.74 $22.69 2,210 09/30/2014 0.24% 5.72%
+ MEAS 06/18/2014 TE Connectivity Ltd. (TEL) All Cash $1.7 billion $86.00 $85.80 227,152 12/31/2014 0.23% 0.80%
+ COBR 08/28/2014 Monomoy Capital Partners II, L.P. (N/A) All Cash N/A $4.30 $4.29 30,466 12/31/2014 0.23% 0.80%
+ ROC 07/15/2014 Albemarle Corporation (ALB) Cash Plus Stock $6.2 billion $81.29 $81.11 620,025 03/31/2015 0.22% 0.41%
+ MDCI 06/25/2014 Owens & Minor, Inc. (OMI) All Cash $208 million $13.80 $13.79 30,390 12/31/2014 0.07% 0.25%
+ LSBI 06/04/2014 Old National Bancorp. (ONB) Cash Plus Stock $66.7 million $41.58 $41.56 9,389 12/31/2014 0.05% 0.16%
+ URS 07/13/2014 AECOM Technology Corporation (ACM) Cash Plus Stock $6 billion $60.28 $60.27 279,300 10/31/2014 0.02% 0.17%
+ ARX 05/20/2014 Cobham plc (N/A) All Cash $1.46 billion $10.50 $10.50 406,740 09/30/2014 0.00% 0.00%
+ BNNY 09/08/2014 General Mills, Inc. (GIS) All Cash $820 million $46.00 $46.00 1,073,978 12/31/2014 0.00% 0.00%
+ COBK 09/10/2014 Cape Bancorp, Inc. (CBNJ) All Stock $55 million $13.22 $13.30 37,217 06/30/2014 -0.63% 2.98%
+ HCT 06/02/2014 Ventas, Inc. (VTR) All Stock $2.6 billion $10.33 $10.40 5,794,906 12/31/2014 -0.68% -2.33%
+ MGAM 09/08/2014 Global Cash Access Holdings, Inc. (GCA) All Cash $1.2 billion $36.50 $36.84 548,791 03/31/2015 -0.92% -1.71%
+ IMCB 07/23/2014 Columbia Banking System Inc. (COLB) Cash Plus Stock $121.5 million $19.41 $19.63 1,021 12/31/2014 -1.11% -3.79%
+ SWS 04/01/2014 Hilltop Holdings Inc. (HTH) Cash Plus Stock $260 million $7.08 $7.17 194,875 12/31/2014 -1.30% -4.44%
+ TAM 09/11/2014 Eastman Chemical Co. (EMN) All Cash $2.8 billion $26.00 $26.53 3,225,576 12/31/2014 -2.00% -6.81%
+ FDO 07/28/2014 Dollar Tree, Inc. (DLTR) Special Conditions $9.2 billion $74.50 $78.49 1,790,284 01/31/2015 -5.08% -13.45%
+ AUXL 06/26/2014 QLT Inc. (QLTI) All Stock N/A $20.16 $22.48 1,052,477 12/31/2014 -10.30% -35.15%
+ 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 $23.88 32,683 12/31/2014 -18.34% -62.57%
+ GFIG 07/30/2014 CME Group (N/A) All Cash N/A $4.55 $6.02 2,117,438 01/31/2015 -24.42% -64.59%

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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