Merger Arbitrage Mondays – October 13, 2014

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October 12, 2014 | Merger Arbitrage | | Author Asif

Merger Activity decreased last week with four new mergers 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 2014 127
Total Number of Deals Not Completed in 2014 2
Total Number of Pending Deals
Cash Deals 28
Stock Deals 19
Stock & Cash Deals 19
Special Conditions 8
Total Number of Pending Deals 74
Total Deal Size $569.64 billion

New Deals:

  1. The acquisition of Durata Therapeutics (DRTX) by Actavis (ACT) for $675 million or $23.00 per share in cash and contingent value rights (CVRs) entitling the holder to receive additional cash payments of up to $5.00 per share if certain regulatory or commercial milestones related to Durata’s lead product DALVANCE™ are achieved. If DALVANCE™ is approved in Europe for ABSSSI, holders of the CVR will receive $1.00 per share. If DALVANCE™ is approved for single dose administration by the FDA, holders of the CVR will receive $1.00 per share. If a net global DALVANCE™ revenue threshold is met over a designated time period, holders of the CVR will receive $3.00 per share.
  2. The acquisition of Gentiva Health Services (GTIV) by Kindred Healthcare (KND) for $1.8 billion in a cash plus stock deal. Under the terms of the agreement, shareholders of Gentiva Health Services will receive $14.50 per share in cash and 0.257 shares of Kindred common stock.
  3. The acquisition of Auxilium Pharmaceuticals (AUXL) by Endo International (ENDP) for $2.6 billion. Subject to aggregate cash and equity consideration limits, Auxilium stockholders may elect one of three options with respect to transaction consideration: 100 percent equity which equates to 0.488 Endo shares per Auxilium share, 100 percent cash which equates to $33.25 per Auxilium share or a standard election of an equal mix of $16.625 in cash and 0.244 Endo shares per Auxilium share.  The total cash consideration will not exceed 50 percent of the total equity value and the equity consideration will not exceed 75 percent of the total equity value.
  4. A merger between Dawson Geophysical Company (DWSN) and TGC Industries (TGE) where current Dawson and TGC shareholders will own approximately 66% and 34% of the combined company respectively. Immediately prior to the transaction, TGC will implement a 1-for-3 reverse stock split. After the TGC reverse stock split, Dawson shareholders will receive 1.76 shares of TGC split-effected common stock for each share of Dawson common stock held at the effective time of the transaction, with cash to be paid in lieu of any fractional shares.

Deal Updates:

  1. On October 9, 2014, Auxilium Pharmaceuticals (AUXL) terminated its previous deal with QLT (QLTI) and agreed to be acquired by Endo International (ENDP)
  2. On October 9, 2014, Compuware (CPWR) announced the spin-off of Covisint (COVS). Based on the number of Compuware shares outstanding and shares deliverable under RSUs as of October 8, 2014, holders of Compuware common stock are expected to receive approximately 0.1402 shares of Covisint common stock in the distribution with respect to each outstanding share of Compuware common stock they own at the close of business on the record date, and holders of RSUs are expected to receive approximately 0.1402 shares of Covisint common stock in the distribution with respect to each share of Compuware common stock deliverable under the RSUs they hold at the close of business on the record date.

Closed Deals:

  1. The acquisition of Cobra Electronics (COBR) by Monomoy Capital Partners on October 8, 2014. It took 41 days for this deal to be completed.
  2. The acquisition of Measurement Specialties (MEAS) by TE Connectivity (TEL) on October 9, 2014. It took 113 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

LIN 03/22/2014 Media General, Inc. (MEG) $25.97 $22.09 03/31/2015 17.56% 37.94%
LO 07/15/2014 Reynolds American Inc. (RAI) $67.84 $60.48 06/30/2015 12.17% 17.09%
FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) $4.06 $3.64 10/30/2014 11.60% 249.01%
DTV 05/18/2014 AT&T, Inc. (T) $95.00 $86.21 05/31/2015 10.20% 16.18%
IGT 07/16/2014 GTECH S.p.A. (GTKYY) $18.25 $16.64 06/30/2015 9.68% 13.58%
EDS 12/02/2013 Pan Long Company Limited (N/A) $1.78 $1.66 09/30/2014 7.23% -202.97%
TWC 02/13/2014 Comcast Corporation (CMCSA) $151.28 $141.21 12/31/2014 7.13% 32.96%
SWY 03/06/2014 AB Acquisition LLC (N/A) $36.15 $33.86 12/31/2014 6.76% 31.25%
HCBK 08/27/2012 M&T Bank Corporation (MTB) $10.08 $9.45 12/31/2014 6.67% 30.81%
MGAM 09/08/2014 Global Cash Access Holdings, Inc. (GCA) $36.50 $34.23 03/31/2015 6.63% 14.32%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ LIN 03/22/2014 Media General, Inc. (MEG) Special Conditions $2.6 billion $25.97 $22.09 78,021 03/31/2015 17.56% 37.94%
+ LO 07/15/2014 Reynolds American Inc. (RAI) Cash Plus Stock $27.4 billion $67.84 $60.48 2,778,164 06/30/2015 12.17% 17.09%
+ FFKY 04/22/2014 Community Bank Shares of Indiana Inc. (CBIN) All Stock $17.9 million $4.06 $3.64 3,451 10/30/2014 11.60% 249.01%
+ DTV 05/18/2014 AT&T, Inc. (T) Special Conditions $48.5 billion $95.00 $86.21 1,881,469 05/31/2015 10.20% 16.18%
+ IGT 07/16/2014 GTECH S.p.A. (GTKYY) Special Conditions $6.4 billion $18.25 $16.64 2,759,263 06/30/2015 9.68% 13.58%
+ EDS 12/02/2013 Pan Long Company Limited (N/A) All Cash $60.1 million $1.78 $1.66 27,561 09/30/2014 7.23% 0.00%
+ TWC 02/13/2014 Comcast Corporation (CMCSA) All Stock $45.2 billion $151.28 $141.21 2,681,193 12/31/2014 7.13% 32.96%
+ SWY 03/06/2014 AB Acquisition LLC (N/A) Special Conditions N/A $36.15 $33.86 1,794,341 12/31/2014 6.76% 31.25%
+ HCBK 08/27/2012 M&T Bank Corporation (MTB) All Stock $3.7 billion $10.08 $9.45 4,316,440 12/31/2014 6.67% 30.81%
+ MGAM 09/08/2014 Global Cash Access Holdings, Inc. (GCA) All Cash $1.2 billion $36.50 $34.23 1,245,907 03/31/2015 6.63% 14.32%
+ TRLA 07/28/2014 Zillow, Inc. (Z) All Stock $3.5 billion $46.53 $44.01 782,562 03/31/2015 5.72% 12.35%
+ QRE 07/24/2014 Breitburn Energy Partners L.P. (BBEP) All Stock $3 billion $15.97 $15.12 1,962,339 01/31/2015 5.60% 18.58%
+ MONT 06/11/2014 Shanghai Pudong Science and Technology Investment Co., Ltd. (N/A) All Cash $693 million $22.60 $21.45 288,669 10/08/2014 5.36% 0.00%
+ CPWR 09/02/2014 Thoma Bravo, LLC (N/A) All Cash $2.5 billion $10.92 $10.39 3,072,418 01/31/2015 5.10% 16.93%
+ AUXL 10/09/2014 Endo International plc (ENDP) Special Conditions $2.6 billion $33.25 $31.77 3,663,747 06/30/2015 4.66% 6.54%
+ OABC 04/29/2014 Southside Bancshares Inc. (SBSI) Cash Plus Stock $307 million $27.64 $26.42 35,821 12/31/2014 4.63% 21.40%
+ DWSN 10/09/2014 TGC Industries Inc. (TGE) All Stock N/A $18.53 $17.73 116,881 03/31/2015 4.53% 9.78%
+ FFCO 04/14/2014 CB Financial Services, Inc. (CBFV) All Stock 54.5 million $22.31 $21.35 789 11/15/2014 4.50% 49.77%
+ ROC 07/15/2014 Albemarle Corporation (ALB) Cash Plus Stock $6.2 billion $77.08 $73.81 1,092,750 03/31/2015 4.43% 9.57%
+ TEG 06/23/2014 Wisconsin Energy Corp. (WEC) Cash Plus Stock $9.1 billion $69.97 $67.02 301,299 06/30/2015 4.40% 6.18%
+ BYI 08/01/2014 Scientific Games Corporation (SGMS) All Cash $5.1 billion $83.30 $80.07 865,126 01/31/2015 4.03% 13.39%
+ TRW 09/15/2014 ZF Friedrichshafen AG (“ZF”) (N/A) All Cash $13.5 billion $105.60 $101.61 1,385,918 06/30/2015 3.93% 5.51%
+ COV 06/15/2014 Medtronic, Inc. (MDT) Cash Plus Stock $42.9 billion $96.48 $92.93 3,902,922 01/31/2015 3.82% 12.67%
+ CNVR 09/11/2014 Alliance Data Systems Corporation (ADS) Special Conditions $2.3 billion $35.00 $33.78 1,493,337 12/31/2014 3.61% 16.69%
+ VIAS 09/22/2014 TTM Technologies Inc. (TTMI) Cash Plus Stock $927 million $15.55 $15.03 22,745 06/30/2015 3.47% 4.87%
+ SIAL 09/22/2014 Merck KGaA (N/A) All Cash $17 billion $140.00 $135.49 909,195 06/30/2015 3.33% 4.67%
+ CMSB 09/25/2014 Putnam County Savings Bank (N/A) All Cash $25.4 million $13.25 $12.85 404 06/30/2015 3.11% 4.37%
+ CFN 10/05/2014 Becton, Dickinson and Company (BDX) Cash Plus Stock $12.2 billion $58.94 $57.22 7,989,610 06/30/2015 3.00% 4.21%
+ SWS 04/01/2014 Hilltop Holdings Inc. (HTH) Cash Plus Stock $260 million $6.86 $6.66 95,024 12/31/2014 3.00% 13.85%
+ GRT 09/16/2014 Washington Prime Group Inc. (WPG) Cash Plus Stock $4.3 billion $13.68 $13.29 7,407,596 03/31/2015 2.95% 6.37%
+ FRNK 07/15/2014 Towne Bank (TOWN) All Stock $275 million $19.43 $18.89 41,025 12/31/2014 2.87% 13.26%
+ TIBX 09/29/2014 Vista Equity Partners (N/A) All Cash $4.3 billion $24.00 $23.35 7,890,686 12/31/2014 2.78% 12.86%
+ COBK 09/10/2014 Cape Bancorp, Inc. (CBNJ) All Stock $55 million $13.16 $12.86 10,596 03/31/2015 2.33% 5.04%
+ GTIV 10/09/2014 Kindred Healthcare Inc. (KND) Cash Plus Stock $1.8 billion $19.89 $19.46 2,852,345 03/31/2015 2.23% 4.82%
+ FWLT 02/13/2014 AMEC PLC (AMCBF) Cash Plus Stock $3.3 billion $30.89 $30.23 607,958 12/31/2014 2.19% 10.11%
+ OVRL 05/15/2014 Sphere 3D Corporation (ANY) All Stock $81.13 million $2.91 $2.85 58,701 09/30/2014 2.12% 0.00%
+ IRF 08/20/2014 Infineon Technologies AG (IFNNY) All Cash $2.4 billion $40.00 $39.20 2,091,555 01/31/2015 2.04% 6.77%
+ BKYF 09/08/2014 BB&T Corporation (BBT) Cash Plus Stock $363 million $46.96 $46.02 47,594 03/31/2015 2.04% 4.40%
+ HCT 06/02/2014 Ventas, Inc. (VTR) All Stock $2.6 billion $11.07 $10.88 4,675,670 12/31/2014 1.78% 8.21%
+ POM 04/30/2014 Exelon Corporation (EXC) All Cash $7.2 billion $27.25 $26.78 1,530,134 09/30/2015 1.76% 1.82%
+ DRC 09/21/2014 Siemens (N/A) All Cash $7.6 billion $83.00 $81.76 1,872,358 06/30/2015 1.52% 2.13%
+ TQNT 02/24/2014 RF Micro Devices Inc. (RFMD) All Stock $1.6 billion $16.11 $15.88 4,089,428 12/31/2014 1.47% 6.79%
+ KOG 07/13/2014 Whiting Petroleum Corp. (WLL) All Stock $6 billion $11.11 $10.96 7,323,517 12/31/2014 1.39% 6.41%
+ GECR 06/23/2014 State Bank Financial Corporation (STBZ) Special Conditions $82 million $22.35 $22.05 77 03/31/2015 1.36% 2.94%
+ SPBC 05/05/2014 Green Bank (N/A) All Cash $46.2 million $29.55 $29.17 4,300 09/30/2014 1.30% 0.00%
+ 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 $11.85 201,466 12/31/2014 1.27% 5.85%
+ KMP 08/10/2014 Kinder Morgan, Inc. (KMI) Cash Plus Stock N/A $90.75 $89.62 3,018,549 12/31/2014 1.26% 5.84%
+ SMPL 09/29/2014 HomeStreet, Inc. (HMST) All Stock N/A $16.42 $16.23 4,210 03/31/2015 1.17% 2.53%
+ FRF 08/12/2014 Tiptree Financial Inc. (TIPT) All Cash $218 million $10.00 $9.89 66,435 01/31/2015 1.11% 3.69%
+ CNQR 09/18/2014 SAP SE (SAP) All Cash $8.3 billion $129.00 $127.65 1,088,963 03/31/2015 1.06% 2.28%
+ PSMI 08/22/2014 Murata Electronics North America, Inc. (N/A) All Cash $471 million $12.50 $12.37 221,272 01/31/2015 1.05% 3.49%
+ TWTC 06/16/2014 Level 3 Communications, Inc. (LVLT) Cash Plus Stock $7.3 billion $37.27 $36.90 724,696 12/31/2014 0.99% 4.57%
+ LPDX 09/25/2014 Laboratory Corp. of America Holdings (LH) All Cash $85.3 million $5.25 $5.20 203,164 12/31/2014 0.96% 4.44%
+ EPB 08/10/2014 Kinder Morgan, Inc. (KMI) Cash Plus Stock N/A $39.12 $38.75 1,210,792 12/31/2014 0.95% 4.39%
+ PL 06/03/2014 Dai-ichi Life Insurance Company (N/A) All Cash $5.7 billion $70.00 $69.38 1,749,523 01/31/2015 0.89% 2.97%
+ URS 07/13/2014 AECOM Technology Corporation (ACM) Cash Plus Stock $6 billion $54.48 $54.05 707,295 10/31/2014 0.80% 16.29%
+ ATHL 09/29/2014 Encana Corporation (ECA) All Cash $7.1 billion $58.50 $58.08 2,660,976 12/31/2014 0.72% 3.34%
+ FUBC 05/08/2014 Valley National Bancorp (VLY) All Stock $312 million $8.20 $8.14 47,510 10/31/2014 0.70% 14.17%
+ KMR 08/10/2014 Kinder Morgan, Inc. (KMI) All Stock N/A $90.62 $90.11 916,080 12/31/2014 0.57% 2.64%
+ ENVE 06/30/2014 Consolidated Communications Holdings Inc. (CNSL) All Stock $350 million $17.98 $17.88 60,035 12/31/2014 0.56% 2.57%
+ MOVE 09/30/2014 News Corp (N/A) All Cash $950 million $21.00 $20.91 1,159,921 12/31/2014 0.43% 1.99%
+ BOLT 09/03/2014 Teledyne Technologies Inc. (TDY) All Cash $171 million $22.00 $21.91 76,655 12/31/2014 0.41% 1.90%
+ TAM 09/11/2014 Eastman Chemical Co. (EMN) All Cash $2.8 billion $26.00 $25.90 297,823 12/31/2014 0.39% 1.78%
+ BAGL 09/29/2014 JAB Holding Company (N/A) All Cash $374 million $20.25 $20.18 310,210 12/31/2014 0.35% 1.60%
+ NBTF 08/04/2014 Peoples Bancorp Inc. (PEBO) Cash Plus Stock $109 million $30.04 $29.96 702 03/31/2015 0.27% 0.58%
+ BNNY 09/08/2014 General Mills, Inc. (GIS) All Cash $820 million $46.00 $45.93 1,178,609 12/31/2014 0.15% 0.70%
+ IMCB 07/23/2014 Columbia Banking System Inc. (COLB) Cash Plus Stock $121.5 million $18.06 $18.14 978 12/31/2014 -0.46% -2.14%
+ LSBI 06/04/2014 Old National Bancorp. (ONB) Cash Plus Stock $66.7 million $38.65 $38.90 600 11/01/2014 -0.64% -12.24%
+ THRD 06/04/2014 National Penn Bancshares Inc. (NPBC) All Stock $138 million $39.79 $40.50 16,206 12/31/2014 -1.74% -8.05%
+ PEOP 08/05/2014 Independent Bank Corp. (INDB) All Stock $130.6 million $19.77 $20.20 N/A 03/31/2015 -2.14% -4.63%
+ DRTX 10/06/2014 Actavis plc (ACT) All Cash $675 million $23.00 $23.56 730,234 01/31/2015 -2.38% -7.89%
+ AMBI 09/29/2014 Daiichi Sankyo Company, Ltd. (N/A) All Cash $410 million $15.00 $15.46 46,904 12/31/2014 -2.98% -13.75%
+ FDO 07/28/2014 Dollar Tree, Inc. (DLTR) Special Conditions $9.2 billion $74.50 $77.50 1,394,894 01/31/2015 -3.87% -12.84%
+ GFIG 07/30/2014 CME Group (N/A) All Cash N/A $4.55 $5.28 285,972 01/31/2015 -13.83% -45.88%

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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