Merger Arbitrage Mondays – May 16, 2016

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May 15, 2016 | Merger Arbitrage | | Author Asif

Merger activity decreased last week with four new deals announced and seven 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 2016 80
Total Number of Deals Not Completed in 2016 5
Total Number of Pending Deals
Cash Deals 44
Stock Deals 18
Stock & Cash Deals 16
Special Conditions 9
Total Number of Pending Deals 87
Total Deal Size $830.91 billion

New Deals:

  1. The acquisition of Krispy Kreme Doughnuts (KKD) by JAB Beech for $1.35 billion or $21.00 per share in cash.
  2. The acquisition of Morgans Hotel Group (MHGC) by SBE for $794 million or $2.25 per share in cash.
  3. The acquisition of Alexza Pharmaceuticals (ALXA) by Grupo Ferrer Internacional for $0.90 per share in cash. In addition to the upfront cash payment, Alexza stockholders will be granted contingent value rights to receive cash payments in four payment categories if specified milestones are achieved following the closing.
  4. The acquisition of WaferGen Bio-systems (WGBS) by Takara Bio USA Holdings for $18 million or $0.95 per share in cash. This is a complex deal with many conditions that make it challenging to determine the actual value of this deal on a per share basis. Using their full year 2015 revenue and applying a multiple of 2.5, we get a rough estimate of $0.95/share and are going to use this price as a placeholder in our database.

Deal Updates:

  1. On May 10, 2016, Pier Antonio Costamagna, a co-founder of Fuel Systems Solutions (FSYSfiled a presentation with the U.S. Securities and Exchange Commission that was sent to the leading proxy advisory firms in the United States. The presentation details three fundamental themes that underline Mr. Costamagna’s decision to vote AGAINST the proposed merger of FSS and Westport (WPRT).
  2. On May 11, 2016, Office Depot (ODP) issued the following statement from Chairman and Chief Executive Officer Roland Smith after the U.S. District Court in the District of Columbia granted the Federal Trade Commission’s (FTC) request for a preliminary injunction to block the proposed merger of Staples (SPLS) and Office Depot. Smith commented: “While we are respectful of the Court’s decision to grant the FTC’s request for a preliminary injunction to prevent our merger with Staples, we are disappointed by this outcome and strongly believe that a merger would have benefitted all of our customers in the long term. We do not intend to appeal the Court’s decision and the two companies plan to terminate the merger agreement effective May 16, 2016.”
  3. On May 12, 2016, California regulators authorized the three-way merger of Charter Communications (CHTR), Time Warner Cable (TWC) and Bright House Networks, and the huge deal is expected to close on or about May 18, 2016.
  4. On May 13, 2016, Williams Companies (WMB) said it has filed a lawsuit against Energy Transfer Equity (ETE) to prevent it from terminating its once-coveted deal for Williams.
  5. On May 13, 2016, ON Semiconductor Corporation (ON) announced that it has extended its previously announced tender offer to purchase all of the outstanding shares of common stock of Fairchild Semiconductor International (FCS) to May 26, 2016.

Closed Deals:

  1. The acquisition of PowerSecure International (POWR) by Southern Company (SO) on May 9, 2016. It took 75 days for this deal to be completed.
  2. The acquisition of VBI Vaccines (VBIV) by SciVac Therapeutics (SVACF) on May 9, 2016. It took 196 days for this deal to be completed.
  3. The acquisition of NTELOS Holdings (NTLS) by Shenandoah Telecommunications (SHEN) on May 9, 2016. It took 273 days for this deal to be completed.
  4. The acquisition of Mattson Technology (MTSN) by Beijing E-Town Dragon Semiconductor Industry Investment Center on May 11, 2016. It took 162 days for this deal to be completed.
  5. The acquisition of VirtualScopics (VSCP) by BioTelemetry (BEAT) on May 11, 2016. It took 47 days for this deal to be completed.
  6. The acquisition of SanDisk (SNDK) by Western Digital Corporation (WDC) on May 12, 2016. It took 204 days for this deal to be completed.
  7. The acquisition of Jiayuan.com International (DATE) by FutureWorld on May 13, 2016. It took 158 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 $19.35 06/30/2016 124.81% 1012.32%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $39.87 12/31/2016 40.46% 64.48%
CI 07/24/2015 Anthem, Inc. (ANTM) $173.21 $128.36 12/31/2016 34.94% 55.70%
HUM 07/03/2015 Aetna Inc. (AET) $215.37 $165.23 12/31/2016 30.34% 48.36%
IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) $38.90 $33.00 12/31/2016 17.88% 28.50%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $7.95 12/31/2016 13.21% 21.05%
HTCH 11/02/2015 TDK Corporation (N/A) $4.00 $3.57 06/30/2016 12.04% 97.70%
BNK 11/09/2015 Bank of the Ozarks, Inc. (OZRK) $25.00 $22.58 06/30/2016 10.72% 86.93%
KUTV 04/05/2016 Shanda Investment Holdings Limited (N/A) $1.08 $0.98 12/31/2016 10.20% 16.26%
DSKY 12/31/2015 Dream Investment Holdings Limited (N/A) $14.00 $12.74 06/30/2016 9.89% 80.22%

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 $19.35 13,797,391 06/30/2016 124.81% 1012.32%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.8 billion $56.00 $39.87 587,191 12/31/2016 40.46% 64.48%
+ CI 07/24/2015 Anthem, Inc. (ANTM) Cash Plus Stock $54.2 billion $173.21 $128.36 1,551,592 12/31/2016 34.94% 55.70%
+ HUM 07/03/2015 Aetna Inc. (AET) Cash Plus Stock $37 billion $215.37 $165.23 2,068,048 12/31/2016 30.34% 48.36%
+ IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) All Cash $6 billion $38.90 $33.00 2,656,732 12/31/2016 17.88% 28.50%
+ RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) All Cash $17.2 billion $9.00 $7.95 19,703,976 12/31/2016 13.21% 21.05%
+ HTCH 11/02/2015 TDK Corporation (N/A) Special Conditions $126 million $4.00 $3.57 291,720 06/30/2016 12.04% 97.70%
+ BNK 11/09/2015 Bank of the Ozarks, Inc. (OZRK) Special Conditions $402.5 million $25.00 $22.58 37,905 06/30/2016 10.72% 86.93%
+ KUTV 04/05/2016 Shanda Investment Holdings Limited (N/A) All Cash N/A $1.08 $0.98 21,011 12/31/2016 10.20% 16.26%
+ DSKY 12/31/2015 Dream Investment Holdings Limited (N/A) All Cash N/A $14.00 $12.74 53,609 06/30/2016 9.89% 80.22%
+ FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) All Cash N/A $26.80 $24.64 501,700 06/30/2016 8.77% 71.10%
+ LXK 04/19/2016 consortium of investors led by Apex Technology Co., Ltd. (Apex) and PAG Asia Capital (PAG) (N/A) All Cash $3.6 billion $40.50 $37.25 941,283 12/31/2016 8.72% 13.91%
+ NPD 03/16/2016 China Neptunus Drugstore Holding Ltd. and Neptunus Global Limited (N/A) All Cash $258.66 million $2.62 $2.41 74,909 09/30/2016 8.71% 23.22%
+ 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 $10.00 $9.28 1,299,586 12/31/2016 7.76% 12.37%
+ HOT 11/16/2015 Marriott International, Inc. (MAR) Special Conditions $13.6 billion $79.53 $74.12 2,659,112 06/30/2016 7.30% 59.20%
+ MHGC 05/09/2016 SBE (N/A) All Cash $794 million $2.25 $2.10 1,886,387 12/31/2016 7.14% 11.38%
+ TIVO 04/29/2016 Rovi Corporation (ROVI) Special Conditions $1.1 billion $10.70 $9.99 3,315,757 09/30/2016 7.11% 18.93%
+ NKA 06/14/2015 Brookfield Infrastructure (N/A) All Cash $911.9 million $4.23 $3.99 130,875 12/31/2016 6.02% 9.59%
+ TYC 01/25/2016 Johnson Controls Inc. (JCI) All Stock $16.5 billion $40.61 $38.37 2,071,264 09/30/2016 5.83% 15.53%
+ VAL 03/20/2016 The Sherwin-Williams Company (SHW) All Cash $11.3 billion $113.00 $106.89 735,672 03/31/2017 5.72% 6.54%
+ WGBS 05/13/2016 Takara Bio USA Holdings, Inc. (N/A) Special Conditions $18 million $0.95 $0.90 5,536,095 03/31/2017 5.56% 6.36%
+ FCLF 04/26/2016 First Mid-Illinois Bancshares, Inc. (FMBH) All Stock $90 million $12.40 $11.78 1,100 12/31/2016 5.30% 8.45%
+ AMTG 02/26/2016 Apollo Commercial Real Estate Finance, Inc. (ARI) Cash Plus Stock $641 million $14.17 $13.46 271,157 08/15/2016 5.26% 21.12%
+ NHLD 04/28/2016 Fortress Biotech, Inc. (FBIO) All Cash N/A $3.25 $3.09 30,476 06/30/2016 5.18% 42.00%
+ STJ 04/28/2016 Abbott Laboratories (ABT) Cash Plus Stock $25 billion $79.49 $75.74 4,509,723 12/31/2016 4.95% 7.90%
+ LSBG 05/05/2016 Bar Harbor Bankshares (BHB) All Stock $143 million $15.74 $15.07 12,097 03/31/2017 4.48% 5.12%
+ ITC 02/09/2016 Fortis Inc. (FTS.TO) Cash Plus Stock $11.3 billion $46.23 $44.25 762,574 12/31/2016 4.47% 7.12%
+ BXLT 01/11/2016 Shire plc (SHPG) Cash Plus Stock $32 billion $44.04 $42.39 13,579,144 06/30/2016 3.89% 31.58%
+ 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 $2.42 498,118 06/30/2016 3.72% 30.17%
+ HFFC 11/30/2015 Great Western Bancorp. Inc. (GWB) All Stock $139.5 million $20.26 $19.64 122,361 05/13/2016 3.16% 0.00%
+ RSTI 03/16/2016 Coherent Inc. (COHR) All Cash $942 million $32.50 $31.56 142,453 12/31/2016 2.98% 4.75%
+ VA 04/04/2016 Alaska Air Group, Inc. (ALK) All Cash $4 billion $57.00 $55.46 969,877 01/01/2017 2.78% 4.41%
+ CBNK 04/04/2016 Westfield Financial Inc. (WFD) All Stock $110 million $18.48 $18.00 12,065 12/31/2016 2.66% 4.24%
+ DWA 04/28/2016 NBCUniversal (N/A) All Cash $3.8 billion $41.00 $40.00 2,329,378 12/31/2016 2.50% 3.98%
+ AF 10/29/2015 New York Community Bancorp Inc. (NYCB) Cash Plus Stock $2 billion $15.21 $14.84 348,163 12/31/2016 2.49% 3.97%
+ PLCM 04/15/2016 Mitel Networks Corporation (MITL) Cash Plus Stock $1.96 billlion $11.24 $10.97 1,452,230 09/30/2016 2.48% 6.61%
+ IMS 05/03/2016 Quintiles Transnational Holdings Inc. (Q) All Stock $9 billion $25.24 $24.68 3,194,488 12/31/2016 2.29% 3.64%
+ WIBC 12/07/2015 BBCN Bancorp, Inc. (BBCN) All Stock $1 billion $10.54 $10.33 235,951 06/30/2016 2.00% 16.25%
+ YCB 05/03/2016 WesBanco Inc. (WSBC) Cash Plus Stock $221 million $38.17 $37.44 9,068 12/31/2016 1.96% 3.12%
+ NTI 12/21/2015 Western Refining, Inc. (WNR) Cash Plus Stock N/A $21.49 $21.11 733,563 06/30/2016 1.78% 14.43%
+ HTS 04/11/2016 Annaly Capital Management, Inc. (NLY) All Stock $1.5 billion $16.82 $16.56 554,930 09/30/2016 1.60% 4.26%
+ PNX 09/29/2015 Nassau Reinsurance Group Holdings L.P. (N/A) All Cash $217.2 million $37.50 $36.91 28,131 06/30/2016 1.60% 12.97%
+ UNTD 05/04/2016 B. Riley Financial, Inc. (RILY) All Cash $170 million $11.00 $10.84 176,149 09/30/2016 1.48% 3.93%
+ FNFG 10/30/2015 KeyCorp. (KEY) Cash Plus Stock $4.1 billion $10.24 $10.09 2,991,892 09/30/2016 1.44% 3.84%
+ FCTY 03/10/2016 Midland Financial Co. (N/A) All Cash N/A $11.22 $11.07 33,157 12/31/2016 1.36% 2.16%
+ RRM 02/26/2016 SES (N/A) All Cash $242 million $13.29 $13.12 1 08/15/2016 1.30% 5.20%
+ EDE 02/09/2016 Algonquin Power & Utilities Corp. (AQN.TO) All Cash $2.4 billion $34.00 $33.57 307,185 03/31/2017 1.28% 1.47%
+ CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) All Cash $1.65 billion $36.00 $35.56 628,931 09/30/2016 1.24% 3.30%
+ SSRG 05/03/2016 an affiliate of RoundTable Healthcare Partners (N/A) All Cash $140.3 million $13.10 $12.95 39,248 09/30/2016 1.16% 3.09%
+ CVC 09/17/2015 Altice (N/A) All Cash $17.7 billion $34.90 $34.60 3,001,556 06/30/2016 0.87% 7.03%
+ AVNU 01/29/2016 Pinnacle Financial Partners Inc. (PNFP) Cash Plus Stock $201.4 million $18.75 $18.59 5,479 09/15/2016 0.85% 2.53%
+ KLAC 10/21/2015 Lam Research Corporation (LRCX) Cash Plus Stock $10.6 billion $69.17 $68.60 621,984 06/30/2016 0.83% 6.74%
+ FMER 01/26/2016 Huntington Bancshares Incorporated (HBAN) Cash Plus Stock $3.4 billion $21.63 $21.47 855,390 09/30/2016 0.76% 2.02%
+ FCS 11/18/2015 ON Semiconductor Corp. (ON) All Cash $2.4 billion $20.00 $19.86 409,717 05/26/2016 0.70% 25.73%
+ PKY 04/29/2016 Cousins Properties Incorporated (CUZ) All Stock $1.95 billion $17.34 $17.24 946,658 12/31/2016 0.60% 0.95%
+ RKUS 04/04/2016 Brocade Communications Systems, Inc. (BRCD) Cash Plus Stock $1.2 billion $12.39 $12.33 988,421 07/31/2016 0.49% 2.34%
+ CKEC 03/03/2016 AMC Entertainment Holdings, Inc. (AMC) All Cash $1.1 billion $30.00 $29.86 219,453 12/31/2016 0.47% 0.75%
+ GAS 08/24/2015 Southern Company (SO) All Cash $12 billion $66.00 $65.77 703,503 12/31/2016 0.35% 0.56%
+ TUMI 03/03/2016 Samsonite International S.A. (N/A) All Cash $1.8 billion $26.75 $26.66 863,334 06/30/2016 0.34% 2.74%
+ MNRK 12/17/2015 Towne Bank (TOWN) All Stock $221 million $18.07 $18.01 14,356 06/30/2016 0.31% 2.53%
+ TWC 05/26/2015 Charter Communications, Inc. (CHTR) Cash Plus Stock $78.7 billion $216.07 $215.51 11,085,911 05/18/2016 0.26% 47.11%
+ OPWR 05/02/2016 Oracle Corporation (ORCL) All Cash $532 million $10.30 $10.28 976,825 12/31/2016 0.19% 0.31%
+ MEG 01/27/2016 Nexstar Broadcasting Group, Inc. (NXST) Special Conditions $4.6 billion $17.14 $17.12 680,307 12/15/2016 0.12% 0.20%
+ TE 09/05/2015 Emera (N/A) All Cash $10.4 billion $27.55 $27.52 2,759,746 06/30/2016 0.11% 0.88%
+ CKP 03/02/2016 an affiliate of CCL Industries Inc. (N/A) All Cash $443 million $10.15 $10.14 3,639,388 09/30/2016 0.10% 0.26%
+ PNY 10/26/2015 Duke Energy Corporation (DUK) All Cash $6.7 billion $60.00 $59.95 385,698 12/31/2016 0.08% 0.13%
+ SLI 04/07/2016 Handy & Harman Ltd. (HNH) All Cash $166.32 million $40.00 $39.97 6,771 05/20/2016 0.08% 6.85%
+ ARG 11/17/2015 Air Liquide (N/A) All Cash $13.4 billion $143.00 $142.94 2,106,659 08/15/2016 0.04% 0.17%
+ CPGX 03/17/2016 TransCanada Corporation (TRP) All Cash $13 billion $25.50 $25.49 4,131,081 12/31/2016 0.04% 0.06%
+ IHS 03/21/2016 Markit Ltd. (MRKT) All Stock N/A $119.86 $119.82 230,991 12/31/2016 0.03% 0.05%
+ EXAM 04/27/2016 an affiliate of Leonard Green & Partners, L.P. (N/A) All Cash $2.2 billion $35.05 $35.05 306,967 09/30/2016 0.00% 0.00%
+ HNSN 04/20/2016 Auris Surgical Robotics (N/A) All Cash $80 million $4.00 $4.00 26,158 06/30/2016 0.00% 0.00%
+ TXTR 04/28/2016 Oracle Corporation (ORCL) All Cash $663 million $26.00 $26.01 778,884 12/31/2016 -0.04% -0.06%
+ AFOP 04/07/2016 Corning Inc. (GLW) All Cash $305 million $18.50 $18.51 281,777 06/30/2016 -0.05% -0.44%
+ RSE 02/25/2016 an affiliate of Brookfield Asset Management Inc. (N/A) All Cash $2.8 billion $18.25 $18.27 354,146 09/30/2016 -0.11% -0.29%
+ WCN 01/19/2016 Progressive Waste Solutions Ltd. (BIN) All Stock N/A $69.51 $69.74 459,733 06/30/2016 -0.33% -2.65%
+ STR 02/01/2016 Dominion Resources, Inc. (D) All Cash $4.4 billion $25.00 $25.11 2,409,550 12/31/2016 -0.44% -0.70%
+ KKD 05/09/2016 JAB Beech Inc. (N/A) All Cash $1.35 billion $21.00 $21.14 1,842,851 09/30/2016 -0.66% -1.76%
+ HE 12/03/2014 NextEra Energy, Inc. (NEE) Special Conditions $4.3 billion $33.50 $33.80 283,585 06/30/2016 -0.89% -7.20%
+ ALXA 05/10/2016 Grupo Ferrer Internacional, S.A. (N/A) Special Conditions N/A $0.90 $0.91 207,036 06/30/2016 -1.10% -8.91%
+ CHEV 11/24/2015 MainSource Financial Group, Inc. (MSFG) All Stock $107.4 million $14.59 $14.82 949 09/30/2016 -1.53% -4.09%
+ COB 11/23/2015 Capital Bank Financial Corp. (CBF) All Stock $350 million $12.66 $12.90 19,032 06/30/2016 -1.83% -14.87%
+ FXCB 12/08/2015 Univest Corporation of Pennsylvania (UVSP) All Stock $244.3 million $18.98 $19.56 6,558 09/30/2016 -2.99% -7.96%
+ LPSB 03/10/2016 Horizon Bancorp (HBNC) All Stock $94.1 million $15.07 $15.80 2,255 09/30/2016 -4.61% -12.30%
+ BITI 01/19/2016 Acorda Therapeutics, Inc. (ACOR) All Cash $363 million $25.60 $26.85 3,259 09/30/2016 -4.66% -12.40%
+ FSYS 09/01/2015 Westport Innovations Inc. (WPRT) All Stock $126.36 million $4.30 $4.95 22,544 06/30/2016 -13.12% -106.41%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $4.61 $8.71 69,970 03/31/2015 -47.09% 41.72%

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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