Merger Arbitrage Mondays – April 18, 2016

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April 17, 2016 | Merger Arbitrage | | Author Asif

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

With anywhere from 80 to 100 active deals, it can get challenging to stay on top of all of them. One of the advantages of sharing information with investors that follow this strategy is the feedback we receive from time to time that helps us stay on top of updates to deals. I am thankful to several investors who have reached out over the last few weeks to help us update some closing dates or to notify us of deals we might have otherwise missed.

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 2016 64
Total Number of Deals Not Completed in 2016 3
Total Number of Pending Deals
Cash Deals 41
Stock Deals 17
Stock & Cash Deals 19
Special Conditions 6
Total Number of Pending Deals 83
Total Deal Size $784.54 billion

New Deals:

  1. The acquisition of Hatteras Financial (HTS) by Annaly Capital Management (NLY) for $1.5 billion in a cash or stock deal. Under the terms of the agreement, Hatteras shareholders may elect to receive: (a) $5.55 in cash and 0.9894 shares of Annaly common stock; (b) $15.85 in cash (the “Cash Consideration Option”); or (c) 1.5226 shares of Annaly common stock (the “Stock Consideration Option”).  Hatteras shareholders who elect the Cash Consideration Option or Stock Consideration Option will be subject to proration, in each of the exchange offer and the subsequent second step merger, so that the aggregate consideration will consist of approximately 65% of Annaly’s common stock and approximately 35% in cash.
  2. The acquisition of Polycom (PLCM) by Mitel Networks Corporation (MITL) for $1.96 billion in a cash plus stock deal. Under the terms of the agreement, Polycom stockholders will be entitled to $3.12 in cash and 1.31 Mitel common shares for each share of Polycom common stock.

Deal Updates:

  1. On April 14, 2016, The Williams Companies (WMB) announced that the Delaware Court of Chancery had granted Williams’ motion to expedite the litigation commenced by Williams against Energy Transfer Equity (ETE) challenging the private offering of Series A Convertible Preferred Units that ETE disclosed on March 9, 2016.
  2. On April 15, 2016, Shenandoah Telecommunications Company (SHEN) announced that the Federal Communications Commission (FCC) approved Shentel’s proposed acquisition of NTELOS Holdings (NTLS). Shentel anticipates that the transactions will close within the next few weeks, subject to the remaining closing conditions.

Closed Deals:

  1. The acquisition of Blount International (BLT) by American Securities and P2 Capital Partners on April 12, 2016. It took 124 days for this deal to be completed.
  2. The acquisition of Cleco Corporation (CNL) by Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corporation on April 13, 2016. It took 541 days for this deal to be completed.
  3. The acquisition of Mecox Lane Limited (MCOX) by Minat Associated on April 14, 2016. It took 114 days for this deal to be completed.
  4. The acquisition of Jarden (JAH) by Newell Rubbermaid (NWL) on April 14, 2016. It took 123 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

WMB 09/28/2015 Energy Transfer Equity, L.P. (ETE) $43.50 $17.55 06/30/2016 147.86% 739.32%
BHI 11/16/2014 Halliburton Company (HAL) $61.86 $43.80 04/30/2016 41.24% 1254.33%
ODP 02/04/2015 Staples, Inc. (SPLS) $9.69 $7.44 05/16/2016 30.24% 394.16%
CI 07/24/2015 Anthem, Inc. (ANTM) $177.03 $136.65 12/31/2016 29.55% 41.96%
HUM 07/03/2015 Aetna Inc. (AET) $216.97 $169.87 12/31/2016 27.72% 39.38%
APOL 02/08/2016 A consortium of investors including The Vistria Group, LLC, funds affiliated with Apollo Global Management, LLC and and Najafi Companies (N/A) $9.50 $7.61 12/31/2016 24.84% 35.27%
NKA 06/14/2015 Brookfield Infrastructure (N/A) $4.23 $3.52 12/31/2016 20.17% 28.65%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $7.97 12/31/2016 12.92% 18.35%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $49.87 12/31/2016 12.29% 17.46%
BXLT 01/11/2016 Shire plc (SHPG) $44.93 $40.51 06/30/2016 10.91% 54.53%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ WMB 09/28/2015 Energy Transfer Equity, L.P. (ETE) Special Conditions $37.7 billion $43.50 $17.55 6,250,874 06/30/2016 147.86% 739.32%
+ BHI 11/16/2014 Halliburton Company (HAL) Cash Plus Stock N/A $61.86 $43.80 3,448,911 04/30/2016 41.24% 1254.33%
+ ODP 02/04/2015 Staples, Inc. (SPLS) Cash Plus Stock $6.3 billion $9.69 $7.44 8,904,903 05/16/2016 30.24% 394.16%
+ CI 07/24/2015 Anthem, Inc. (ANTM) Cash Plus Stock $54.2 billion $177.03 $136.65 1,590,850 12/31/2016 29.55% 41.96%
+ HUM 07/03/2015 Aetna Inc. (AET) Cash Plus Stock $37 billion $216.97 $169.87 868,457 12/31/2016 27.72% 39.38%
+ APOL 02/08/2016 A consortium of investors including The Vistria Group, LLC, funds affiliated with Apollo Global Management, LLC and and Najafi Companies (N/A) All Cash $1.1 billion $9.50 $7.61 1,241,654 12/31/2016 24.84% 35.27%
+ NKA 06/14/2015 Brookfield Infrastructure (N/A) All Cash $911.9 million $4.23 $3.52 9,935 12/31/2016 20.17% 28.65%
+ RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) All Cash $17.2 billion $9.00 $7.97 10,957,983 12/31/2016 12.92% 18.35%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.8 billion $56.00 $49.87 733,070 12/31/2016 12.29% 17.46%
+ BXLT 01/11/2016 Shire plc (SHPG) Cash Plus Stock $32 billion $44.93 $40.51 5,979,857 06/30/2016 10.91% 54.53%
+ HTCH 11/02/2015 TDK Corporation (N/A) Special Conditions $126 million $4.00 $3.65 190,380 06/30/2016 9.59% 47.95%
+ IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) All Cash $6 billion $38.90 $35.59 1,173,868 12/31/2016 9.30% 13.21%
+ KUTV 04/05/2016 Shanda Investment Holdings Limited (N/A) All Cash N/A $1.08 $1.00 213,146 12/31/2016 8.00% 11.36%
+ TYC 01/25/2016 Johnson Controls Inc. (JCI) All Stock $16.5 billion $38.97 $36.79 1,481,753 09/30/2016 5.94% 13.13%
+ ITC 02/09/2016 Fortis Inc. (FTS.TO) Cash Plus Stock $11.3 billion $45.69 $43.17 794,439 12/31/2016 5.84% 8.29%
+ NPD 03/16/2016 China Neptunus Drugstore Holding Ltd. and Neptunus Global Limited (N/A) All Cash $258.66 million $2.62 $2.48 47,931 09/30/2016 5.65% 12.49%
+ VAL 03/20/2016 The Sherwin-Williams Company (SHW) All Cash $11.3 billion $113.00 $107.04 835,633 03/31/2017 5.57% 5.86%
+ MY 02/03/2016 A consortium of investors (the �Buyer Consortium�), including Mr. Chuanwei Zhang , the Chairman and Chief Executive Officer of the Company (N/A) All Cash $408 million $2.51 $2.39 446,234 06/30/2016 5.02% 25.10%
+ MTSN 12/01/2015 Beijing E-Town Dragon Semiconductor Industry Investment Center (N/A) All Cash $300 million $3.80 $3.64 107,682 06/30/2016 4.40% 21.98%
+ AMTG 02/26/2016 Apollo Commercial Real Estate Finance, Inc. (ARI) Cash Plus Stock $641 million $14.18 $13.61 186,118 08/15/2016 4.20% 12.87%
+ CVC 09/17/2015 Altice (N/A) All Cash $17.7 billion $34.90 $33.59 9,280,661 06/30/2016 3.90% 19.50%
+ AF 10/29/2015 New York Community Bancorp Inc. (NYCB) Cash Plus Stock $2 billion $16.14 $15.58 410,003 12/31/2016 3.59% 5.10%
+ PLCM 04/15/2016 Mitel Networks Corporation (MITL) Cash Plus Stock $1.96 billlion $12.45 $12.02 18,811,351 09/30/2016 3.55% 7.86%
+ VBIV 10/26/2015 SciVac Therapeutics Inc. (SVACF) All Stock N/A $2.50 $2.42 134,767 04/30/2016 3.18% 96.78%
+ FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) All Cash N/A $26.80 $26.00 655,278 06/30/2016 3.08% 15.38%
+ CBNK 04/04/2016 Westfield Financial Inc. (WFD) All Stock $110 million $18.55 $18.01 5,323 12/31/2016 3.01% 4.27%
+ WIBC 12/07/2015 BBCN Bancorp, Inc. (BBCN) All Stock $1 billion $11.07 $10.77 246,097 06/30/2016 2.80% 14.00%
+ VA 04/04/2016 Alaska Air Group, Inc. (ALK) All Cash $4 billion $57.00 $55.50 924,062 01/01/2017 2.70% 3.82%
+ HE 12/03/2014 NextEra Energy, Inc. (NEE) Special Conditions $4.3 billion $33.50 $32.70 341,933 06/30/2016 2.45% 12.23%
+ FCTY 03/10/2016 Midland Financial Co. (N/A) All Cash N/A $11.22 $10.96 16,750 12/31/2016 2.37% 3.37%
+ IHS 03/21/2016 Markit Ltd. (MRKT) All Stock N/A $126.33 $123.48 270,833 12/31/2016 2.31% 3.28%
+ TWC 05/26/2015 Charter Communications, Inc. (CHTR) Cash Plus Stock $78.7 billion $209.84 $205.44 1,617,520 06/30/2016 2.14% 10.70%
+ DSKY 12/31/2015 Dream Investment Holdings Limited (N/A) All Cash N/A $14.00 $13.73 57,249 06/30/2016 1.97% 9.83%
+ RRM 02/26/2016 SES (N/A) All Cash $242 million $13.29 $13.04 1,581 08/15/2016 1.92% 5.88%
+ SNDK 10/21/2015 Western Digital Corporation (WDC) Cash Plus Stock $19 billion $77.16 $75.76 3,218,109 06/30/2016 1.85% 9.27%
+ EDE 02/09/2016 Algonquin Power & Utilities Corp. (AQN.TO) All Cash $2.4 billion $34.00 $33.42 179,164 03/31/2017 1.74% 1.83%
+ AVNU 01/29/2016 Pinnacle Financial Partners Inc. (PNFP) Cash Plus Stock $201.4 million $20.42 $20.09 61,890 09/15/2016 1.63% 3.97%
+ BNK 11/09/2015 Bank of the Ozarks, Inc. (OZRK) Special Conditions $402.5 million $25.00 $24.62 38,323 04/30/2016 1.54% 46.95%
+ MNRK 12/17/2015 Towne Bank (TOWN) All Stock $221 million $18.03 $17.77 33,026 06/30/2016 1.47% 7.34%
+ RSTI 03/16/2016 Coherent Inc. (COHR) All Cash $942 million $32.50 $32.07 120,660 12/31/2016 1.34% 1.90%
+ MEG 01/27/2016 Nexstar Broadcasting Group, Inc. (NXST) Special Conditions $4.6 billion $17.14 $16.93 616,291 12/15/2016 1.24% 1.88%
+ PNX 09/29/2015 Nassau Reinsurance Group Holdings L.P. (N/A) All Cash $217.2 million $37.50 $37.06 28,522 06/30/2016 1.19% 5.94%
+ PULB 12/03/2015 First Busey Corporation (BUSE) All Stock $210.7 million $16.37 $16.20 14,239 06/30/2016 1.04% 5.21%
+ GAS 08/24/2015 Southern Company (SO) All Cash $12 billion $66.00 $65.38 344,147 12/31/2016 0.95% 1.35%
+ FNFG 10/30/2015 KeyCorp. (KEY) Cash Plus Stock $4.1 billion $10.26 $10.16 1,888,600 09/30/2016 0.94% 2.09%
+ FMER 01/26/2016 Huntington Bancshares Incorporated (HBAN) Cash Plus Stock $3.4 billion $22.08 $21.90 990,460 09/30/2016 0.82% 1.81%
+ DATE 12/07/2015 FutureWorld Inc. (N/A) All Cash N/A $7.56 $7.50 30,111 04/30/2016 0.80% 24.33%
+ VSCP 03/25/2016 BioTelemetry, Inc. (BEAT) All Cash $15.5 million $4.05 $4.02 15,522 05/09/2016 0.75% 12.97%
+ ARG 11/17/2015 Air Liquide (N/A) All Cash $13.4 billion $143.00 $142.00 526,296 08/15/2016 0.70% 2.16%
+ ADT 02/16/2016 An Affiliate of Certain Funds Managed By Affiliates of Apollo Global Management, LLC (N/A) All Cash $6.94 billion $42.00 $41.71 2,269,596 06/30/2016 0.70% 3.48%
+ ATNY 02/29/2016 an affiliate of private equity firm J. F. Lehman & Company (N/A) All Cash $110 million $2.00 $1.99 227,817 06/30/2016 0.50% 2.51%
+ CBNJ 01/05/2016 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $208.1 million $13.79 $13.73 43,740 09/30/2016 0.43% 0.95%
+ KLAC 10/21/2015 Lam Research Corporation (LRCX) Cash Plus Stock $10.6 billion $72.82 $72.53 486,450 06/30/2016 0.40% 2.00%
+ CPGX 03/17/2016 TransCanada Corporation (TRP) All Cash $13 billion $25.50 $25.41 5,893,129 12/31/2016 0.35% 0.50%
+ PNY 10/26/2015 Duke Energy Corporation (DUK) All Cash $6.7 billion $60.00 $59.80 401,593 12/31/2016 0.33% 0.47%
+ TUMI 03/03/2016 Samsonite International S.A. (N/A) All Cash $1.8 billion $26.75 $26.67 649,468 06/30/2016 0.30% 1.50%
+ NTLS 08/10/2015 Shenandoah Telecommunications Co. (SHEN) All Cash $640 million $9.25 $9.23 156,086 04/30/2016 0.22% 6.59%
+ POWR 02/24/2016 Southern Company (SO) All Cash $431 million $18.75 $18.72 235,751 06/30/2016 0.16% 0.80%
+ FCS 11/18/2015 ON Semiconductor Corp. (ON) All Cash $2.4 billion $20.00 $19.98 365,793 04/14/2016 0.10% 0.00%
+ HFFC 11/30/2015 Great Western Bancorp. Inc. (GWB) All Stock $139.5 million $18.82 $18.81 27,331 06/30/2016 0.07% 0.37%
+ HPY 12/15/2015 Global Payments Inc. (GPN) Cash Plus Stock $4.3 billion $103.89 $103.82 304,090 05/31/2016 0.07% 0.60%
+ TFM 03/14/2016 Apollo Global Management, LLC (APO) All Cash $1.36 billion $28.50 $28.48 2,750,441 06/30/2016 0.07% 0.35%
+ NTI 12/21/2015 Western Refining, Inc. (WNR) Cash Plus Stock N/A $22.90 $22.89 961,750 06/30/2016 0.06% 0.30%
+ SLI 04/07/2016 Handy & Harman Ltd. (HNH) All Cash $166.32 million $40.00 $39.98 20,884 06/30/2016 0.05% 0.25%
+ NEWP 02/23/2016 MKS Instruments, Inc. (MKSI) All Cash $980 million $23.00 $23.00 262,963 06/30/2016 0.00% 0.00%
+ AFOP 04/07/2016 Corning Inc. (GLW) All Cash $305 million $18.50 $18.51 580,322 06/30/2016 -0.05% -0.27%
+ STR 02/01/2016 Dominion Resources, Inc. (D) All Cash $4.4 billion $25.00 $25.02 1,087,035 12/15/2016 -0.08% -0.12%
+ RKUS 04/04/2016 Brocade Communications Systems, Inc. (BRCD) Cash Plus Stock $1.2 billion $13.49 $13.51 824,623 07/31/2016 -0.13% -0.45%
+ CKEC 03/03/2016 AMC Entertainment Holdings, Inc. (AMC) All Cash $1.1 billion $30.00 $30.06 692,833 12/31/2016 -0.20% -0.28%
+ CHEV 11/24/2015 MainSource Financial Group, Inc. (MSFG) All Stock $107.4 million $14.79 $14.84 32,811 09/30/2016 -0.36% -0.80%
+ RSE 02/25/2016 an affiliate of Brookfield Asset Management Inc. (N/A) All Cash $2.8 billion $18.25 $18.32 143,948 09/30/2016 -0.38% -0.85%
+ FSYS 09/01/2015 Westport Innovations Inc. (WPRT) All Stock $126.36 million $5.43 $5.45 18,533 03/31/2016 -0.39% 7.83%
+ CKP 03/02/2016 an affiliate of CCL Industries Inc. (N/A) All Cash $443 million $10.15 $10.19 143,438 09/30/2016 -0.39% -0.87%
+ TE 09/05/2015 Emera (N/A) All Cash $10.4 billion $27.55 $27.69 1,031,452 06/30/2016 -0.51% -2.53%
+ HTS 04/11/2016 Annaly Capital Management, Inc. (NLY) All Stock $1.5 billion $15.85 $15.94 1,334,920 09/30/2016 -0.56% -1.25%
+ COB 11/23/2015 Capital Bank Financial Corp. (CBF) All Stock $350 million $13.38 $13.48 83,056 03/31/2016 -0.73% 14.80%
+ WCN 01/19/2016 Progressive Waste Solutions Ltd. (BIN) All Stock N/A $63.72 $64.28 500,630 06/30/2016 -0.88% -4.38%
+ HOT 11/16/2015 Marriott International, Inc. (MAR) Special Conditions $13.6 billion $79.53 $80.39 3,573,256 06/30/2016 -1.07% -5.35%
+ FXCB 12/08/2015 Univest Corporation of Pennsylvania (UVSP) All Stock $244.3 million $19.20 $19.69 9,850 09/30/2016 -2.49% -5.51%
+ LPSB 03/10/2016 Horizon Bancorp (HBNC) All Stock $94.1 million $15.45 $15.87 6,275 09/30/2016 -2.62% -5.79%
+ BITI 01/19/2016 Acorda Therapeutics, Inc. (ACOR) All Cash $363 million $25.60 $26.43 9,600 09/30/2016 -3.14% -6.95%
+ ABCW 01/12/2016 Old National Bancorp. (ONB) All Stock 461 million $44.56 $46.10 216,080 06/30/2016 -3.34% -16.72%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $4.81 $7.07 62,885 03/31/2015 -31.91% 30.33%

Disclaimer: Clients of Signal Partners, LLC  and I may have positions in any of these stocks at any time. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria




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Comments

  1. David Ruhm
    April 20th, 2016

    Asif, thanks for these updates. I thought BONA would be in your April 11 update under Closed Deals because it looks like it closed 4/8.

  2. Asif
    April 24th, 2016

    You are right. We did close the deal in our database but did not include it in the closed deals section of the April 11 update. Thanks for bringing that to our attention.

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