Merger Arbitrage Mondays – May 2, 2016

Bookmark and Share

May 1, 2016 | Merger Arbitrage | | Author Asif

Merger activity increased last week with eight new deals 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 2016 67
Total Number of Deals Not Completed in 2016 4
Total Number of Pending Deals
Cash Deals 46
Stock Deals 19
Stock & Cash Deals 18
Special Conditions 7
Total Number of Pending Deals 90
Total Deal Size $824.67 billion

New Deals:

  1. The acquisition of First Clover Leaf Financial (FCLF) by First Mid-Illinois Bancshares (FMBH) for $90 million in a cash or stock deal. Under the terms of the agreement, shareholders of First Clover Leaf’s stockholders may elect to exchange each share of First Clover Leaf common stock for either $12.87 in cash or .495 of a share of First Mid common stock, subject to certain potential adjustments. Overall elections are subject to proration such that 25 percent of the First Clover Leaf shares will be exchanged for cash and 75 percent for First Mid stock. We are treating this as an all stock deal.
  2. The acquisition of ExamWorks Group (EXAM) by an affiliate of Leonard Green & Partners for $2.2 billion or $35.05 per share in cash.
  3. The acquisition of St. Jude Medical (STJ) by Abbott Laboratories (ABT) for $25 billion in a cash plus stock deal. Under the terms of the agreement, St. Jude Medical shareholders will receive $46.75 in cash and 0.8708 shares of Abbott common stock.
  4. The acquisition of Textura Corporation (TXTR) by Oracle Corporation (ORCL) for $663 million or $26.00 per share in cash.
  5. The acquisition of Parkway Properties (PKY) by Cousins Properties Incorporated (CUZ) for $1.95 billion in an all stock deal. Under the terms of the agreement, Parkway shareholders will receive 1.63 shares of Cousins stock for each share of Parkway stock they own.
  6. The acquisition of DreamWorks Animation SKG (DWA) by NBCUniversal for $3.8 billion or $41.00 per share in cash.
  7. The acquisition of National Holdings Corporation (NHLD) by Fortress Biotech (FBIO) for $3.25 per share in cash.
  8. The acquisition of TiVo (TIVO) by Rovi Corporation (ROVI) for $1.1 billion in a cash and stock deal. Under the terms of the agreement, Rovi will pay $2.75 per share in cash, or approximately $277 million, subject to adjustment as described under the collar mechanism. The remainder, $7.95 per share, will be paid in shares of common stock of a new holding company that will own both Rovi and TiVo. The stock consideration is subject to a two-way collar between Average Rovi Stock Prices of $16.00 and $25.00. If Rovi’s stock price increases between the agreement date and the closing, TiVo stockholders will receive fewer shares (a lower exchange ratio) until the Average Rovi Stock Price reaches $25.00, at which point the exchange ratio will be fixed at 0.3180 per share. Conversely, if Rovi’s share price decreases between signing and closing, TiVo stockholders will receive more shares (a higher exchange ratio) until the Average Rovi Stock Price reaches $18.71. Between an Average Rovi Stock Price of $18.71 (exchange ratio of 0.4250 per share) and $16.00 (exchange ratio of 0.4969 per share), Rovi has the option to pay additional cash instead of issuing more shares. If the Average Rovi Stock Price is below $16.00, Rovi may set the exchange ratio, in its sole discretion, between 0.4250 and 0.4969. If Rovi makes this election, the per share cash amount will be $10.70 minus the product of the Average Rovi Stock Price and the applicable exchange ratio that Rovi elects. In no event will the cash amount be more than $3.90 per share.

Deal Updates:

  1. On April 14, 2016, VBI Vaccines (VBIVscheduled a special meeting for its stockholders on Thursday, May 5, 2016. We are moving the closing date for the deal to May 31, 2016.
  2. On April 28, 2016, Apollo Education Group (APOL) announced that the Special Meeting of Shareholders has been adjourned to May 6, 2016 in order to provide additional time for shareholders to vote.Of the Class A shares voted to date, nearly 58% voted FOR the proposed transaction. However, the favorable vote of a majority of all outstanding Class A shares is required to adopt this proposal, and the votes to date in favor of the transaction do not yet constitute a majority of the outstanding shares.
  3. On April 29, 2016, Anchor BanCorp Wisconsin (ABCW), the parent holding company of AnchorBank announced that Anchor stockholders voted to adopt the Agreement and Plan of Merger between Anchor and Old National Bancorp (ONB) and to approve, on an advisory, non-binding basis, the merger-related compensation at a special meeting of Anchor stockholders. Anchor and Old National expect to complete the Merger on May 1, 2016.
  4. On April 29, 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 12, 2016.
  5. On April 29, 2016, Alere (ALR) rejected Abbott Laboratories’s (ABT) attempt to end its $5.8 billion pending acquisition of the company.
  6. On April 29, 2016, the President and CEO of CommunityOne Bancorp (COB) said that the merger with Capital Bank (CBF) is expected to close in the second quarter of 2016.
  7. On May 1, 2016, Apollo Education Group (APOL) announced that it has received a revised offer from a consortium of investors including The Vistria Group, funds affiliated with Apollo Global Management and the Najafi Companies. Under the revised terms, which represent a best and final offer, the consortium has increased the price at which it would acquire the company to $10.00 per share in cash for both Class A and Class B shares.
  8. On May 1, 2016, Halliburton Company (HAL) and Baker Hughes Incorporated (BHI) announced that the companies have terminated the merger agreement they entered into in November 2014, effective April 30, 2016.

Closed Deals:

  1. The acquisition of Heartland Payment Systems (HPY) by Global Payments (GPN) on April 26, 2016. It took 133 days for this deal to be completed.
  2. The acquisition of The Fresh Market (TFM) by certain funds affiliated with Apollo Global Management (APO) on April 27, 2016. It took 44 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 $19.39 06/30/2016 124.34% 769.24%
ODP 02/04/2015 Staples, Inc. (SPLS) $9.48 $5.88 05/16/2016 61.25% 1596.99%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $39.00 12/31/2016 43.59% 65.47%
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) $10.00 $7.80 12/31/2016 28.21% 42.37%
CI 07/24/2015 Anthem, Inc. (ANTM) $175.92 $138.54 12/31/2016 26.98% 40.53%
HUM 07/03/2015 Aetna Inc. (AET) $219.43 $177.07 12/31/2016 23.92% 35.93%
NKA 06/14/2015 Brookfield Infrastructure (N/A) $4.23 $3.69 12/31/2016 14.63% 21.98%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $8.05 12/31/2016 11.80% 17.73%
IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) $38.90 $34.95 12/31/2016 11.30% 16.98%
HTCH 11/02/2015 TDK Corporation (N/A) $4.00 $3.65 06/30/2016 9.59% 59.32%

List of all pending deals:

Symbol Announced

Date

Acquiring

Company

Deal

Type

Closing

Value

Closing

Price

Last

Price

Volume Closing

Date

Profit Annu.

Profit

+ WMB 09/28/2015 Energy Transfer Equity, L.P. (ETE) Special Conditions $37.7 billion $43.50 $19.39 8,823,256 06/30/2016 124.34% 769.24%
+ ODP 02/04/2015 Staples, Inc. (SPLS) Cash Plus Stock $6.3 billion $9.48 $5.88 9,150,293 05/16/2016 61.25% 1596.99%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.8 billion $56.00 $39.00 7,857,739 12/31/2016 43.59% 65.47%
+ 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 $7.80 1,553,822 12/31/2016 28.21% 42.37%
+ CI 07/24/2015 Anthem, Inc. (ANTM) Cash Plus Stock $54.2 billion $175.92 $138.54 674,869 12/31/2016 26.98% 40.53%
+ HUM 07/03/2015 Aetna Inc. (AET) Cash Plus Stock $37 billion $219.43 $177.07 605,923 12/31/2016 23.92% 35.93%
+ NKA 06/14/2015 Brookfield Infrastructure (N/A) All Cash $911.9 million $4.23 $3.69 12,225 12/31/2016 14.63% 21.98%
+ RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) All Cash $17.2 billion $9.00 $8.05 8,209,560 12/31/2016 11.80% 17.73%
+ IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) All Cash $6 billion $38.90 $34.95 1,693,078 12/31/2016 11.30% 16.98%
+ HTCH 11/02/2015 TDK Corporation (N/A) Special Conditions $126 million $4.00 $3.65 313,010 06/30/2016 9.59% 59.32%
+ BXLT 01/11/2016 Shire plc (SHPG) Cash Plus Stock $32 billion $45.78 $41.95 7,898,662 06/30/2016 9.12% 56.42%
+ KUTV 04/05/2016 Shanda Investment Holdings Limited (N/A) All Cash N/A $1.08 $0.998 66,343 12/31/2016 8.22% 12.34%
+ TIVO 04/29/2016 Rovi Corporation (ROVI) Special Conditions $1.1 billion $10.70 $9.98 27,339,707 09/30/2016 7.21% 17.44%
+ TYC 01/25/2016 Johnson Controls Inc. (JCI) All Stock $16.5 billion $41.19 $38.52 3,771,716 09/30/2016 6.94% 16.77%
+ NHLD 04/28/2016 Fortress Biotech, Inc. (FBIO) All Cash N/A $3.25 $3.05 255,464 06/30/2016 6.56% 40.57%
+ VAL 03/20/2016 The Sherwin-Williams Company (SHW) All Cash $11.3 billion $113.00 $106.69 946,097 03/31/2017 5.91% 6.48%
+ STJ 04/28/2016 Abbott Laboratories (ABT) Cash Plus Stock $25 billion $80.62 $76.20 15,182,462 12/31/2016 5.81% 8.72%
+ NPD 03/16/2016 China Neptunus Drugstore Holding Ltd. and Neptunus Global Limited (N/A) All Cash $258.66 million $2.62 $2.48 105,550 09/30/2016 5.65% 13.65%
+ ITC 02/09/2016 Fortis Inc. (FTS.TO) Cash Plus Stock $11.3 billion $46.41 $44.07 1,111,948 12/31/2016 5.32% 7.99%
+ FCLF 04/26/2016 First Mid-Illinois Bancshares, Inc. (FMBH) All Stock $90 million $12.32 $11.71 6,241 12/31/2016 5.17% 7.77%
+ 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 $38.60 1,605,306 12/31/2016 4.92% 7.39%
+ 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 $2.40 637,234 06/30/2016 4.58% 28.35%
+ CVC 09/17/2015 Altice (N/A) All Cash $17.7 billion $34.90 $33.39 2,264,391 06/30/2016 4.52% 27.98%
+ AMTG 02/26/2016 Apollo Commercial Real Estate Finance, Inc. (ARI) Cash Plus Stock $641 million $14.17 $13.56 128,036 08/15/2016 4.52% 15.71%
+ MTSN 12/01/2015 Beijing E-Town Dragon Semiconductor Industry Investment Center (N/A) All Cash $300 million $3.80 $3.65 70,816 06/30/2016 4.11% 25.42%
+ AF 10/29/2015 New York Community Bancorp Inc. (NYCB) Cash Plus Stock $2 billion $15.53 $15.04 314,828 12/31/2016 3.26% 4.89%
+ SNDK 10/21/2015 Western Digital Corporation (WDC) Cash Plus Stock $19 billion $77.26 $75.13 2,812,266 06/30/2016 2.83% 17.50%
+ DWA 04/28/2016 NBCUniversal (N/A) All Cash $3.8 billion $41.00 $39.92 9,587,533 12/31/2016 2.71% 4.06%
+ PLCM 04/15/2016 Mitel Networks Corporation (MITL) Cash Plus Stock $1.96 billlion $12.26 $11.95 1,033,537 09/30/2016 2.63% 6.35%
+ PKY 04/29/2016 Cousins Properties Incorporated (CUZ) All Stock $1.95 billion $16.87 $16.45 8,975,599 12/31/2016 2.56% 3.84%
+ HE 12/03/2014 NextEra Energy, Inc. (NEE) Special Conditions $4.3 billion $33.50 $32.69 196,473 06/30/2016 2.48% 15.33%
+ VA 04/04/2016 Alaska Air Group, Inc. (ALK) All Cash $4 billion $57.00 $55.69 880,373 01/01/2017 2.35% 3.52%
+ CBNK 04/04/2016 Westfield Financial Inc. (WFD) All Stock $110 million $18.58 $18.18 156 12/31/2016 2.18% 3.27%
+ FCTY 03/10/2016 Midland Financial Co. (N/A) All Cash N/A $11.22 $10.99 4,643 12/31/2016 2.09% 3.14%
+ WIBC 12/07/2015 BBCN Bancorp, Inc. (BBCN) All Stock $1 billion $10.99 $10.77 336,826 06/30/2016 2.02% 12.47%
+ HFFC 11/30/2015 Great Western Bancorp. Inc. (GWB) All Stock $139.5 million $20.49 $20.10 159,781 05/13/2016 1.93% 64.05%
+ BNK 11/09/2015 Bank of the Ozarks, Inc. (OZRK) Special Conditions $402.5 million $25.00 $24.53 62,554 06/30/2016 1.92% 11.85%
+ CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) All Cash $1.65 billion $36.00 $35.35 1,159,220 09/30/2016 1.84% 4.44%
+ RRM 02/26/2016 SES (N/A) All Cash $242 million $13.29 $13.06 15 08/15/2016 1.76% 6.12%
+ DATE 12/07/2015 FutureWorld Inc. (N/A) All Cash N/A $7.56 $7.45 115,781 04/30/2016 1.48% 0.00%
+ FGL 11/09/2015 Anbang Insurance Group Co., Ltd. (N/A) All Cash N/A $26.80 $26.44 254,720 06/30/2016 1.36% 8.42%
+ PNX 09/29/2015 Nassau Reinsurance Group Holdings L.P. (N/A) All Cash $217.2 million $37.50 $37.01 16,803 06/30/2016 1.32% 8.19%
+ TWC 05/26/2015 Charter Communications, Inc. (CHTR) Cash Plus Stock $78.7 billion $214.80 $212.11 2,079,054 06/30/2016 1.27% 7.85%
+ DSKY 12/31/2015 Dream Investment Holdings Limited (N/A) All Cash N/A $14.00 $13.84 21,958 06/30/2016 1.16% 7.15%
+ CHEV 11/24/2015 MainSource Financial Group, Inc. (MSFG) All Stock $107.4 million $15.11 $14.95 15,646 09/30/2016 1.08% 2.61%
+ EDE 02/09/2016 Algonquin Power & Utilities Corp. (AQN.TO) All Cash $2.4 billion $34.00 $33.67 264,590 03/31/2017 0.98% 1.07%
+ RSTI 03/16/2016 Coherent Inc. (COHR) All Cash $942 million $32.50 $32.19 258,934 12/31/2016 0.96% 1.45%
+ FNFG 10/30/2015 KeyCorp. (KEY) Cash Plus Stock $4.1 billion $10.66 $10.56 4,013,034 09/30/2016 0.92% 2.22%
+ MNRK 12/17/2015 Towne Bank (TOWN) All Stock $221 million $18.54 $18.39 49,556 06/30/2016 0.83% 5.15%
+ IHS 03/21/2016 Markit Ltd. (MRKT) All Stock N/A $124.09 $123.18 183,547 12/31/2016 0.74% 1.11%
+ AVNU 01/29/2016 Pinnacle Financial Partners Inc. (PNFP) Cash Plus Stock $201.4 million $19.70 $19.56 3,300 09/15/2016 0.72% 1.94%
+ FMER 01/26/2016 Huntington Bancshares Incorporated (HBAN) Cash Plus Stock $3.4 billion $22.30 $22.16 1,038,804 09/30/2016 0.65% 1.56%
+ NTI 12/21/2015 Western Refining, Inc. (WNR) Cash Plus Stock N/A $22.99 $22.85 825,219 06/30/2016 0.62% 3.80%
+ CBNJ 01/05/2016 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $208.1 million $14.67 $14.59 166,788 09/30/2016 0.54% 1.30%
+ ARG 11/17/2015 Air Liquide (N/A) All Cash $13.4 billion $143.00 $142.44 1,121,307 08/15/2016 0.39% 1.37%
+ KLAC 10/21/2015 Lam Research Corporation (LRCX) Cash Plus Stock $10.6 billion $70.20 $69.94 866,159 06/30/2016 0.37% 2.30%
+ PNY 10/26/2015 Duke Energy Corporation (DUK) All Cash $6.7 billion $60.00 $59.80 925,615 12/31/2016 0.33% 0.50%
+ CKP 03/02/2016 an affiliate of CCL Industries Inc. (N/A) All Cash $443 million $10.15 $10.12 456,735 09/30/2016 0.30% 0.72%
+ TUMI 03/03/2016 Samsonite International S.A. (N/A) All Cash $1.8 billion $26.75 $26.68 1,076,340 06/30/2016 0.26% 1.62%
+ GAS 08/24/2015 Southern Company (SO) All Cash $12 billion $66.00 $65.86 1,180,440 12/31/2016 0.21% 0.32%
+ POWR 02/24/2016 Southern Company (SO) All Cash $431 million $18.75 $18.72 262,852 06/30/2016 0.16% 0.99%
+ 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 $41.98 4,103,937 05/02/2016 0.05% 0.00%
+ NEWP 02/23/2016 MKS Instruments, Inc. (MKSI) All Cash $980 million $23.00 $22.99 1,747,060 06/30/2016 0.04% 0.27%
+ CKEC 03/03/2016 AMC Entertainment Holdings, Inc. (AMC) All Cash $1.1 billion $30.00 $29.99 566,776 12/31/2016 0.03% 0.05%
+ NTLS 08/10/2015 Shenandoah Telecommunications Co. (SHEN) All Cash $640 million $9.25 $9.25 61,422 06/28/2016 0.00% 0.00%
+ FCS 11/18/2015 ON Semiconductor Corp. (ON) All Cash $2.4 billion $20.00 $20.00 775,431 05/12/2016 0.00% 0.00%
+ VSCP 03/25/2016 BioTelemetry, Inc. (BEAT) All Cash $15.5 million $4.05 $4.05 46,001 05/31/2016 0.00% 0.00%
+ SLI 04/07/2016 Handy & Harman Ltd. (HNH) All Cash $166.32 million $40.00 $40.00 11,532 05/20/2016 0.00% 0.00%
+ AFOP 04/07/2016 Corning Inc. (GLW) All Cash $305 million $18.50 $18.52 266,756 06/30/2016 -0.11% -0.67%
+ PULB 12/03/2015 First Busey Corporation (BUSE) All Stock $210.7 million $16.15 $16.17 30,529 06/30/2016 -0.14% -0.86%
+ HTS 04/11/2016 Annaly Capital Management, Inc. (NLY) All Stock $1.5 billion $15.87 $15.89 816,302 09/30/2016 -0.15% -0.37%
+ STR 02/01/2016 Dominion Resources, Inc. (D) All Cash $4.4 billion $25.00 $25.07 4,007,587 12/15/2016 -0.28% -0.45%
+ CPGX 03/17/2016 TransCanada Corporation (TRP) All Cash $13 billion $25.50 $25.62 5,390,913 12/31/2016 -0.47% -0.70%
+ WCN 01/19/2016 Progressive Waste Solutions Ltd. (BIN) All Stock N/A $66.90 $67.28 957,024 06/30/2016 -0.57% -3.54%
+ ABCW 01/12/2016 Old National Bancorp. (ONB) All Stock 461 million $47.58 $47.86 246,550 05/01/2016 -0.59% 216.06%
+ RKUS 04/04/2016 Brocade Communications Systems, Inc. (BRCD) Cash Plus Stock $1.2 billion $13.66 $13.74 1,253,311 07/31/2016 -0.60% -2.44%
+ TE 09/05/2015 Emera (N/A) All Cash $10.4 billion $27.55 $27.77 2,381,699 06/30/2016 -0.79% -4.90%
+ MEG 01/27/2016 Nexstar Broadcasting Group, Inc. (NXST) Special Conditions $4.6 billion $17.14 $17.33 1,072,254 12/15/2016 -1.10% -1.76%
+ FSYS 09/01/2015 Westport Innovations Inc. (WPRT) All Stock $126.36 million $5.24 $5.30 33,565 03/31/2016 -1.18% 13.49%
+ RSE 02/25/2016 an affiliate of Brookfield Asset Management Inc. (N/A) All Cash $2.8 billion $18.25 $18.47 728,059 09/30/2016 -1.19% -2.88%
+ HNSN 04/20/2016 Auris Surgical Robotics (N/A) All Cash $80 million $4.00 $4.05 82,173 06/30/2016 -1.23% -7.64%
+ TXTR 04/28/2016 Oracle Corporation (ORCL) All Cash $663 million $26.00 $26.39 1,121,455 12/31/2016 -1.48% -2.22%
+ COB 11/23/2015 Capital Bank Financial Corp. (CBF) All Stock $350 million $13.00 $13.20 116,253 06/30/2016 -1.52% -9.42%
+ FXCB 12/08/2015 Univest Corporation of Pennsylvania (UVSP) All Stock $244.3 million $19.21 $19.71 13,525 09/30/2016 -2.54% -6.14%
+ EXAM 04/27/2016 an affiliate of Leonard Green & Partners, L.P. (N/A) All Cash $2.2 billion $35.05 $36.05 972,956 09/30/2016 -2.77% -6.71%
+ HOT 11/16/2015 Marriott International, Inc. (MAR) Special Conditions $13.6 billion $79.53 $81.88 5,176,749 06/30/2016 -2.87% -17.76%
+ LPSB 03/10/2016 Horizon Bancorp (HBNC) All Stock $94.1 million $15.35 $15.88 5,239 09/30/2016 -3.35% -8.10%
+ BITI 01/19/2016 Acorda Therapeutics, Inc. (ACOR) All Cash $363 million $25.60 $26.62 2,354 09/30/2016 -3.83% -9.26%
+ VBIV 10/26/2015 SciVac Therapeutics Inc. (SVACF) All Stock N/A $2.08 $2.21 17,331 05/31/2016 -5.84% -73.56%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $4.54 $7.57 27,439 03/31/2015 -40.09% 36.77%

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




Subscribe to Free Newsletter


Share this Post

Post A Comment, Subscribe to SINLetter