Merger Arbitrage Mondays – August 1, 2016

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July 31, 2016 | Merger Arbitrage | | Author Asif

Merger activity held steady last week with six new deals announced and four 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 126
Total Number of Deals Not Completed in 2016 10
Total Number of Pending Deals
Cash Deals 56
Stock Deals 17
Stock & Cash Deals 15
Special Conditions 9
Total Number of Pending Deals 97
Total Deal Size $969.38 billion

New Deals:

  1. The acquisition of Outerwall (OUTR) by affiliates of certain funds managed by affiliates of Apollo Global Management for $1.6 billion or $52.00 per share in cash.
  2. The acquisition of National Interstate Corporation (NATL) by Great American Insurance Company for $660 million or $32.00 per share in cash. In addition, National Interstate will pay a special dividend of $0.50 per common share upon the closing of the merger.
  3. The acquisition of Linear Technology Corporation (LLTC) by Analog Devices (ADI) for $14.8 billion in a cash plus stock deal. Under the terms of the agreement, Linear Technology shareholders will receive $46.00 per share in cash and 0.2321 of a share of Analog Devices common stock for each share of Linear Technology common stock they hold at closing.
  4. The acquisition of Epiq Systems (EPIQ) by OMERS Private Equity and Harvest Partners for $1 billion or $16.50 per share in cash. The transaction is expected to close in the fourth quarter of 2016.
  5. The acquisition of Sequenom (SQNM) by Laboratory Corporation of America Holdings (LH) for $371 million or $2.40 per share in cash. The transaction is expected to close by the end of 2016.
  6. The acquisition of the core business and real estate of Yahoo! (YHOO) by Verizon (VZ) for $4.83 billion in cash. This acquisition excludes Yahoo!’s stake in Alibaba (BABA), Yahoo! Japan, certain minority investments and its non-core patents (called the Excalibur portfolio). Since this is not an acquisition of the entire company, we have not added this deal to our mergers database.

Deal Updates:

  1. On July 25, 2016, AMC Theatres (AMC) announced that it has entered into an amended and restated merger agreement pursuant to which AMC will acquire all outstanding shares of Carmike Cinemas (CKEC)  for $33.06 per share in cash and stock. The amended merger agreement represents AMC’s “best and final” offer. The revised offer provides an additional $3.06 per share or 10.2% more than the previous offer. Carmike stockholders can elect to receive $33.06 in cash or 1.0819 AMC shares per Carmike share.
  2. On July 27, 2016 Alere (ALR) received a U.S. Department of Justice subpoena regarding government-billing practices. The company released a statement claiming that the billing concerned “accounted for significantly less than 1% of Alere’s total revenues” and is not material. Abbott Laboratories (ABT) already attempted to end its $5.8 billion acquisition of Alere in April. In related news, the CEO of Abbott made a large $31.62 million open market purchase of company stock and exercised 550,000 options without selling them immediately.
  3. On July 27, 2016 Hutchinson Technology (HTCH) reported that it received a letter from the Antitrust Division of the DOJ, which has opened an investigation relating to the sale of suspension assemblies for use in hard disk drives. The DOJ’s letter stated that neither HTI nor any HTI employee is currently a subject of the DOJ investigation. The FTC review of Hutchinson’s acquisition by TDK is still in progress.

Closed Deals:

  1. The acquisition of ExamWorks (EXAM) by Leonard Green & Partners, L.P on July 27, 2016. It took 91 days for this deal to be completed.
  2. The acquisition of SciQuest (SQI) by affiliates of Accel-KKR on July 28, 2016. It took 58 days for this deal to be completed.
  3. The acquisition of Hansen Medical (HNSN) by Auris Surgical Robotics on July 28, 2016. It took 99 days for this deal to be completed.
  4. The acquisition of Krispy Kreme Doughnuts (KKD) by JAB Beech on July 28, 2016. It took 80 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

HTCH 11/02/2015 TDK Corporation (N/A) $4.00 $1.97 09/30/2016 103.05% 616.58%
ALR 02/01/2016 Abbott Laboratories (ABT) $56.00 $37.50 12/31/2016 49.33% 117.69%
CI 07/24/2015 Anthem, Inc. (ANTM) $171.07 $128.96 12/31/2016 32.65% 77.89%
RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) $9.00 $7.00 12/31/2016 28.57% 68.16%
HUM 07/03/2015 Aetna Inc. (AET) $221.49 $172.55 12/31/2016 28.36% 67.66%
IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) $38.90 $34.24 12/31/2016 13.61% 32.47%
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 $8.99 08/31/2016 11.23% 132.28%
LXK 04/19/2016 consortium of investors led by Apex Technology Co., Ltd. (Apex) and PAG Asia Capital (PAG) (N/A) $40.50 $36.67 12/31/2016 10.44% 24.92%
CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) $36.00 $32.62 09/30/2016 10.36% 62.00%
YDKN 07/21/2016 F.N.B. Corporation (FNB) $27.35 $25.19 03/31/2017 8.57% 12.88%

List of all pending deals:

  Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing
Date
Profit Annu.
Profit
+ HTCH 11/02/2015 TDK Corporation (N/A) Special Conditions $126 million $4.00 $1.97 308,809 09/30/2016 103.05% 626.86%
+ ALR 02/01/2016 Abbott Laboratories (ABT) All Cash $5.8 billion $56.00 $37.50 1,258,087 12/31/2016 49.33% 118.46%
+ CI 07/24/2015 Anthem, Inc. (ANTM) Cash Plus Stock $54.2 billion $171.07 $128.96 5,324,705 12/31/2016 32.65% 78.40%
+ RAD 10/27/2015 Walgreens Boots Alliance, Inc. (WBA) All Cash $17.2 billion $9.00 $7.00 7,008,023 12/31/2016 28.57% 68.61%
+ HUM 07/03/2015 Aetna Inc. (AET) Cash Plus Stock $37 billion $221.49 $172.55 516,722 12/31/2016 28.36% 68.11%
+ IM 02/17/2016 Tianjin Tianhai Investment Company, Ltd. (N/A) All Cash $6 billion $38.90 $34.24 1,416,686 12/31/2016 13.61% 32.68%
+ 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 $8.99 480,494 08/31/2016 11.23% 136.69%
+ 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 $36.67 1,130,223 12/31/2016 10.44% 25.08%
+ CVT 04/18/2016 affiliates of Vista Equity Partners (N/A) All Cash $1.65 billion $36.00 $32.62 340,405 09/30/2016 10.36% 63.03%
+ YDKN 07/21/2016 F.N.B. Corporation (FNB) All Cash $1.4 billion $27.35 $25.19 430,398 03/31/2017 8.57% 12.93%
+ WR 05/31/2016 Great Plains Energy Incorporated (GXP) Special Conditions $12.2 billion $60.00 $55.57 823,279 03/31/2017 7.97% 12.02%
+ HE 12/03/2014 NextEra Energy, Inc. (NEE) Special Conditions $4.3 billion $33.50 $31.05 514,614 06/30/2016 7.89% 0.00%
+ NHLD 04/28/2016 Fortress Biotech, Inc. (FBIO) All Cash N/A $3.25 $3.02 40,491 08/15/2016 7.62% 198.56%
+ DANG 05/31/2016 Dangdang Holding Company Limited and Dangdang Merger Company Limited (N/A) All Cash $556 million $6.70 $6.24 369,032 12/31/2016 7.37% 17.70%
+ CKEC 03/03/2016 AMC Entertainment Holdings, Inc. (AMC) All Cash $1.1 billion $33.06 $30.82 638,633 12/31/2016 7.27% 17.45%
+ AIXG 05/23/2016 Fujian Grand Chip Investment Fund LP (N/A) All Cash $748.36 million $6.66 $6.26 55,594 12/31/2016 6.39% 15.34%
+ VAL 03/20/2016 The Sherwin-Williams Company (SHW) All Cash $11.3 billion $113.00 $106.47 696,392 03/31/2017 6.13% 9.25%
+ PBCP 06/02/2016 Prudential Bancorp, Inc. (PBIP) Special Conditions $38.1 million $11.28 $10.68 N/A 12/31/2016 5.62% 13.49%
+ AMTG 02/26/2016 Apollo Commercial Real Estate Finance, Inc. (ARI) Cash Plus Stock $641 million $14.31 $13.57 164,919 08/15/2016 5.43% 141.45%
+ IOC 07/21/2016 Exxon Mobil Corporation (XOM) Special Conditions $2.5 billion $52.07 $49.46 232,623 09/30/2016 5.28% 32.10%
+ STRZA 06/30/2016 Lions Gate Entertainment Corp. (LGF) Cash Plus Stock $4.4 billion $31.56 $30.23 1,262,741 12/31/2016 4.40% 10.57%
+ NPD 03/16/2016 China Neptunus Drugstore Holding Ltd. and Neptunus Global Limited (N/A) All Cash $258.66 million $2.62 $2.53 147,151 09/30/2016 3.56% 21.64%
+ STJ 04/28/2016 Abbott Laboratories (ABT) Cash Plus Stock $25 billion $85.72 $83.04 2,092,223 12/31/2016 3.23% 7.74%
+ DSKY 12/31/2015 Dream Investment Holdings Limited (N/A) All Cash N/A $14.00 $13.57 54,222 06/30/2016 3.17% 0.00%
+ TLN 06/03/2016 affiliates of Riverstone Holdings LLC (N/A) All Cash $5.2 billion $14.00 $13.60 1,040,032 12/31/2016 2.94% 7.06%
+ RSTI 03/16/2016 Coherent Inc. (COHR) All Cash $942 million $32.50 $31.60 48,868 12/31/2016 2.85% 6.84%
+ MGN 05/24/2016 Hecla Mining Co. (HL) All Stock N/A $1.44 $1.40 156,976 09/30/2016 2.82% 17.16%
+ OSHC 07/13/2016 OceanFirst Financial Corp. (OCFC) Cash Plus Stock $145.6 million $22.58 $21.98 23,177 01/31/2017 2.74% 5.46%
+ ITC 02/09/2016 Fortis Inc. (FTS.TO) Cash Plus Stock $11.3 billion $47.49 $46.25 734,072 12/31/2016 2.67% 6.42%
+ SCNB 06/27/2016 People's United Financial Inc. (PBCT) All Stock $402 million $33.73 $32.91 31,963 12/31/2016 2.49% 5.99%
+ JOY 07/21/2016 Komatsu America Corp. (N/A) All Cash $3.7 billion $28.30 $27.63 3,243,713 06/30/2017 2.42% 2.66%
+ FCLF 04/26/2016 First Mid-Illinois Bancshares, Inc. (FMBH) All Stock $90 million $12.47 $12.18 375 12/31/2016 2.37% 5.70%
+ VA 04/04/2016 Alaska Air Group, Inc. (ALK) All Cash $4 billion $57.00 $55.92 509,350 01/01/2017 1.93% 4.61%
+ AF 10/29/2015 New York Community Bancorp Inc. (NYCB) Cash Plus Stock $2 billion $14.95 $14.67 428,748 12/31/2016 1.91% 4.58%
+ EVHC 06/15/2016 AmSurg Corp. (AMSG) All Stock $7.66 billion $25.05 $24.59 2,217,150 12/31/2016 1.88% 4.52%
+ HOT 11/16/2015 Marriott International, Inc. (MAR) Special Conditions $13.6 billion $79.53 $78.06 773,708 07/31/2016 1.88% 0.00%
+ LNKD 06/13/2016 Microsoft Corporation (MSFT) All Cash $26.2 billion $196.00 $192.73 686,211 12/31/2016 1.70% 4.07%
+ SQNM 07/27/2016 Laboratory Corporation of America (LH) All Cash $371 million $2.40 $2.36 2,352,404 12/31/2016 1.69% 4.07%
+ CLBH 06/22/2016 First Bancorp (FBNC) All Stock $97.3 million $18.76 $18.46 18,203 03/31/2017 1.61% 2.43%
+ KLAC 10/21/2015 Lam Research Corporation (LRCX) Cash Plus Stock $10.6 billion $76.89 $75.71 1,426,645 06/30/2016 1.55% 0.00%
+ TIVO 04/29/2016 Rovi Corporation (ROVI) Special Conditions $1.1 billion $10.70 $10.54 839,072 09/30/2016 1.52% 9.23%
+ ARMH 07/18/2016 SoftBank Group (SFBTY) All Cash $32 billion $67.32 $66.36 3,301,545 12/31/2016 1.45% 3.47%
+ FMD 06/02/2016 FP Resources USA Inc. (N/A) All Cash $65.5 million $5.05 $4.98 43,784 09/30/2016 1.41% 8.55%
+ LLTC 07/26/2016 Analog Devices, Inc. (ADI) Cash Plus Stock $14.8 billion $60.81 $59.99 2,684,055 06/30/2017 1.38% 1.51%
+ WWAV 07/07/2016 Danone (N/A) All Cash $12.5 billion $56.25 $55.49 2,943,606 12/31/2016 1.37% 3.29%
+ FCS 11/18/2015 ON Semiconductor Corp. (ON) All Cash $2.4 billion $20.00 $19.74 918,803 07/21/2016 1.32% 0.00%
+ GLDC 07/19/2016 Utz Quality Foods, Inc. (N/A) All Cash $135 million $12.00 $11.86 14,466 12/31/2016 1.18% 2.83%
+ AVG 07/07/2016 Avast Software (N/A) All Cash $1.3 billion $25.00 $24.73 794,430 10/15/2016 1.09% 5.31%
+ AXLL 06/10/2016 Westlake Chemical Corporation (WLK) All Cash $3.8 billion $33.00 $32.65 718,186 12/31/2016 1.07% 2.57%
+ FEIC 05/27/2016 Thermo Fisher Scientific, Inc. (TMO) All Cash $4.2 billion $107.50 $106.42 436,365 01/31/2017 1.01% 2.02%
+ QLIK 06/02/2016 Thoma Bravo, LLC (N/A) All Cash $3 billion $30.50 $30.20 3,233,345 09/30/2016 0.99% 6.04%
+ EPIQ 07/27/2016 OMERS Private Equity and Harvest Partners (N/A) All Cash $1 billion $16.50 $16.34 398,588 12/31/2016 0.98% 2.35%
+ MRD 05/16/2016 Range Resources Corporation (RRC) All Stock $4.4 billion $15.12 $14.98 1,509,765 12/31/2016 0.91% 2.18%
+ PLCM 07/08/2016 Siris Capital Group, LLC (N/A) All Cash $2 billion $12.50 $12.39 3,459,597 09/30/2016 0.89% 5.40%
+ EDE 02/09/2016 Algonquin Power & Utilities Corp. (AQN.TO) All Cash $2.4 billion $34.00 $33.73 178,693 03/31/2017 0.80% 1.21%
+ YCB 05/03/2016 WesBanco Inc. (WSBC) Cash Plus Stock $221 million $37.51 $37.21 13,222 12/31/2016 0.80% 1.92%
+ CERE 06/17/2016 Land O'Lakes (N/A) All Cash $17.2 million $0.40 $0.397 182,310 09/30/2016 0.76% 4.60%
+ FNFG 10/30/2015 KeyCorp. (KEY) Cash Plus Stock $4.1 billion $10.26 $10.18 79,596,018 09/30/2016 0.75% 4.54%
+ SAAS 05/18/2016 NICE Systems Ltd. (NICE) All Cash $940 million $14.00 $13.90 2,318,917 12/31/2016 0.72% 1.73%
+ RDEN 06/16/2016 Revlon, Inc. (REV) All Cash $870 million $14.00 $13.90 383,478 12/31/2016 0.72% 1.73%
+ IMPR 07/13/2016 an affiliate of Thoma Bravo, LLC (N/A) All Cash $544 million $19.25 $19.12 300,628 12/31/2016 0.68% 1.63%
+ SMT 05/26/2016 Foxconn Technology Group (N/A) All Cash N/A $4.50 $4.47 16,636 07/31/2016 0.67% 0.00%
+ WIBC 12/07/2015 BBCN Bancorp, Inc. (BBCN) All Stock $1 billion $10.81 $10.74 2,331,998 07/29/2016 0.66% 0.00%
+ MESG 05/23/2016 Siris Capital Group, LLC (N/A) All Cash $643 million $25.00 $24.85 305,007 09/30/2016 0.60% 3.67%
+ CBNK 04/04/2016 Westfield Financial Inc. (WFD) All Stock $110 million $19.08 $18.98 635 12/31/2016 0.55% 1.33%
+ FMER 01/26/2016 Huntington Bancshares Incorporated (HBAN) Cash Plus Stock $3.4 billion $21.34 $21.23 1,463,398 09/30/2016 0.52% 3.15%
+ RLOC 06/27/2016 Gannett Co., Inc. (GCI) All Cash $156 million $4.60 $4.58 10,174 09/30/2016 0.44% 2.66%
+ REXI 05/23/2016 C-III Capital Partners (N/A) All Cash $270 million $9.78 $9.74 33,522 11/15/2016 0.41% 1.41%
+ QLGC 06/15/2016 Cavium, Inc. (CAVM) Cash Plus Stock $1.36 billion $15.57 $15.52 2,023,031 09/30/2016 0.35% 2.10%
+ PNY 10/26/2015 Duke Energy Corporation (DUK) All Cash $6.7 billion $60.00 $59.80 674,834 12/31/2016 0.33% 0.80%
+ SGNT 07/11/2016 Nichi-Iko Pharmaceutical Co., Ltd (N/A) All Cash $736 million $21.75 $21.69 461,648 03/31/2017 0.28% 0.42%
+ TYC 01/25/2016 Johnson Controls Inc. (JCI) All Stock $16.5 billion $45.69 $45.57 2,355,179 09/30/2016 0.26% 1.61%
+ ASEI 06/21/2016 OSI Systems, Inc. (OSIS) All Cash $269 million $37.00 $36.91 27,944 12/31/2016 0.24% 0.59%
+ DRII 06/29/2016 Apollo Global Management, LLC (APO) All Cash $2.2 billion $30.25 $30.18 851,693 12/31/2016 0.23% 0.56%
+ RRMS 05/31/2016 SemGroup Corporation (SEMG) All Stock $1.74 billion $23.56 $23.51 108,440 09/30/2016 0.22% 1.34%
+ NATL 07/25/2016 Great American Insurance Company (N/A) All Cash $660 million $32.50 $32.43 25,088 12/31/2016 0.22% 0.52%
+ MKTO 05/31/2016 Vista Equity Partners (N/A) All Cash $1.79 billion $35.25 $35.18 827,869 09/30/2016 0.20% 1.21%
+ ELRC 05/31/2016 Platinum Equity (N/A) All Cash $382.2 million $15.50 $15.47 63,637 09/30/2016 0.19% 1.18%
+ RLYP 07/21/2016 Galenica Group (N/A) All Cash $1.53 billion $32.00 $31.94 2,339,481 09/30/2016 0.19% 1.14%
+ HTWR 06/27/2016 Medtronic plc (MDT) All Cash $1.1 billion $58.00 $57.93 166,541 10/28/2016 0.12% 0.50%
+ DWA 04/28/2016 NBCUniversal (N/A) All Cash $3.8 billion $41.00 $40.97 697,799 12/31/2016 0.07% 0.18%
+ TUMI 03/03/2016 Samsonite International S.A. (N/A) All Cash $1.8 billion $26.75 $26.75 274,571 06/30/2016 0.00% 0.00%
+ PKY 04/29/2016 Cousins Properties Incorporated (CUZ) All Stock $1.95 billion $17.34 $17.37 424,871 12/31/2016 -0.15% -0.37%
+ STR 02/01/2016 Dominion Resources, Inc. (D) All Cash $4.4 billion $25.00 $25.17 1,586,952 12/31/2016 -0.68% -1.62%
+ IMS 05/03/2016 Quintiles Transnational Holdings Inc. (Q) All Stock $9 billion $29.81 $30.02 1,115,673 12/31/2016 -0.69% -1.65%
+ NTK 07/06/2016 Melrose Industries PLC (N/A) All Cash $2.8 billion $86.00 $86.88 110,189 08/31/2016 -1.01% -12.32%
+ LSBG 05/05/2016 Bar Harbor Bankshares (BHB) All Stock $143 million $18.23 $18.44 30,776 03/31/2017 -1.14% -1.72%
+ OUTR 07/25/2016 affiliates of certain funds managed by affiliates of Apollo Global Management, LLC (N/A) All Cash $1.6 billion $52.00 $52.66 774,084 09/30/2016 -1.25% -7.62%
+ COB 11/23/2015 Capital Bank Financial Corp. (CBF) All Stock $350 million $12.85 $13.02 10,171 06/30/2016 -1.28% 14.66%
+ TTHI 06/30/2016 Opko Health, Inc. (OPK) All Stock $60 million $1.55 $1.58 3,291 12/31/2016 -1.76% -4.23%
+ ACAS 05/23/2016 Ares Capital Corporation (ARCC) Cash Plus Stock $3.4 billion $16.17 $16.47 947,418 05/31/2017 -1.81% -2.18%
+ AEGR 06/15/2016 QLT Inc. (QLTI) All Stock $267.27 million $1.41 $1.44 280,171 12/31/2016 -2.43% -5.82%
+ MEG 01/27/2016 Nexstar Broadcasting Group, Inc. (NXST) Special Conditions $4.6 billion $17.14 $17.59 890,718 12/15/2016 -2.56% -6.87%
+ WGBS 05/13/2016 Takara Bio USA Holdings, Inc. (N/A) Special Conditions $18 million $0.95 $0.99 318,603 03/31/2017 -4.04% -6.09%
+ SKUL 06/24/2016 Incipio LLC (N/A) All Cash $177 million $5.75 $6.12 334,441 09/30/2016 -6.05% -36.78%
+ MHGC 05/09/2016 SBE (N/A) All Cash $794 million $2.25 $2.55 107,611 12/31/2016 -11.76% -28.25%
+ CACQ 12/22/2014 Caesars Entertainment Corporation (CZR) All Stock N/A $4.58 $10.71 57,444 12/31/2016 -57.22% -137.41%

Disclaimer: I hold long positions in Apollo Education (APOL), Hutchinson Technology (HTCH) and Yahoo! (YHOO). 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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