Merger Arbitrage Mondays - September 3, 2018

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Includes: AHL, AKRX, APO, BMS, BPR, BPY, CNP, COHU, COTV, EHIC, ESRX, GLF, GNW, ING, KS, KTWO, LHO, MCO, PEB, PENN, PNK, REIS, RSYS, S, SCG, SHPG, STC, STDY, SYK, UTHR, VAC, VVC, WRK, XCRA
by: Asif Suria

Summary

Merger activity remained unchanged last week.

The Board of Trustees of LaSalle Hotel has determined that the non-binding proposal received from Pebblebrook Hotel Trust could reasonably be expected to lead to a “Superior Proposal."

GulfMark Offshore announced the public filing by Tidewater of a joint proxy statement.

Merger activity remained unchanged last week with three new deals announced and three pending deals closing. You can find all the active deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section.

Deal Statistics:

Total Number of Deals Closed in 2018 104
Total Number of Deals Not Completed in 2018 12
Total Number of Pending Deals
Cash Deals 42
Stock Deals 16
Stock & Cash Deals 18
Special Conditions 3
Total Number of Pending Deals 79
Total Deal Size $1.13 trillion

New Deals:

  1. The acquisition of Aspen Insurance Holdings Limited (NYSE:AHL) by affiliates of certain investment funds managed by affiliates of Apollo Global Management (NYSE:APO) for $2.6 billion or $42.75 per share in cash.
  2. The acquisition of Reis (NASDAQ:REIS) by Moody’s Corporation (NYSE:MCO) for $278 million or $23.00 per share in cash.
  3. The acquisition of K2M Group Holdings (NASDAQ:KTWO) by Stryker Corporation (NYSE:SYK) for $1.4 billion or $27.50 per share in cash.

Deal Updates:

  1. On August 26, 2018, LaSalle Hotel Properties (NYSE:LHO) announced that its Board of Trustees, has determined that the unsolicited, non-binding proposal received from Pebblebrook Hotel Trust (NYSE:PEB) could reasonably be expected to lead to a “Superior Proposal” as defined in LaSalle’s merger agreement with affiliates of Blackstone Real Estate Partners.
  2. On August 28, 2018, shareholders of Vectren Corporation (NYSE:VVC) approved the merger of CenterPoint Energy (NYSE:CNP) and Vectren Corporation during a special shareholders meeting.
  3. On August 28, 2018, Marriott Vacations Worldwide Corporation (NYSE:VAC) and ILG, Inc. (NASDAQ:ILG) announced that at separate special stockholder meetings the stockholders of both companies approved proposals relating to Marriott Vacations Worldwide’s acquisition of ILG.
  4. On August 28, 2018, WestRock Company (NYSE:WRK) and KapStone Paper and Packaging Corporation (NYSE:KS) announced an anticipated election deadline of September 5, 2018, for KapStone stockholders to elect to receive shares of common stock of Whiskey Holdco, as consideration in the acquisition of KapStone by WestRock through Holdco.
  5. On August 29, 2018, Penn National Gaming (NASDAQ:PENN) announced that the Company received approval from the Missouri Gaming Commission in connection with its pending acquisition of Pinnacle Entertainment (NYSE:PNK).
  6. On August 30, 2018, Cohu (NASDAQ:COHU), and Xcerra Corporation (NASDAQ:XCRA) announced that the respective shareholders of Cohu and Xcerra have voted to approve proposals related to the previously announced Agreement and Plan of Merger, pursuant to which Cohu will acquire Xcerra.
  7. On August 30, 2018, GulfMark Offshore (NYSEMKT:GLF) announced the public filing by Tidewater of a joint proxy statement.

Closed Deals:

  1. The acquisition of Cotiviti Holdings (COTV) by Verscend on August 27, 2018. It took 69 days for this deal to be completed.
  2. The acquisition of GGP Inc. (GGP) by Brookfield Property Partners (NYSE:BPY) on August 28, 2018. It took 155 days for this deal to be completed.
  3. The acquisition of SteadyMed (STDY) by United Therapeutics Corporation (NASDAQ:UTHR) on August 30, 2018. It took 122 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
AKRX 04/24/2017 Fresenius Kabi (N/A) $34.00 $15.69 09/30/2018 116.70% 1577.59%
SCG 01/03/2018 Dominion Energy, Inc. (NYSE:D) $47.35 $38.34 12/31/2018 23.49% 72.04%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.65 12/01/2018 16.77% 68.79%
STC 03/16/2018 Fidelity National Financial, Inc. (NYSE:FNF) $50.76 $44.78 06/30/2019 13.36% 16.26%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (OTCPK:TKPYY) $194.74 $175.27 06/30/2019 11.11% 13.52%
S 04/29/2018 T-Mobile US, Inc. (NASDAQ:TMUS) $6.77 $6.11 06/30/2019 10.85% 13.20%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $12.47 09/30/2018 8.26% 111.66%
RSYS 07/02/2018 Reliance Industries Limited (N/A) $1.72 $1.59 12/31/2018 8.18% 25.08%
ESRX 03/08/2018 Cigna Corporation (NYSE:CI) $94.59 $88.02 12/31/2018 7.47% 22.90%
BMS 08/06/2018 Amcor Limited (AMC.AX) $52.48 $49.28 03/31/2019 6.48% 11.32%

Disclaimer: I hold positions in RadiSys (NASDAQ:RSYS) and magicJack VocalTec (NASDAQ:CALL). 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.

Disclosure: I am/we are long RSYS, CALL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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