Merger Arbitrage Mondays - October 8, 2018

|
Includes: AKRX, AMNB, ANCX, ANDV, AVHI, CLDR, CNP, COHU, COL, CVG, CWAY, D, EGC, EHIC, FBNK, FMS, FNF, FSNUY, GNW, GOV, HDP, HHRBF, HIG, HMTA, HONE, KANG, KTWO, MCO, MPC, NAVG, NXTM, OCN, PBCT, PENN, PGLC, PHH, PNK, REIS, S, SCG, SHPG, SIR, SNX, STC, SYK, TKPYY, TMHC, TMUS, UBSH, USAS, UTX, VVC, XCRA
by: Asif Suria

Summary

Merger activity remained unchanged last week with four new deals announced.

Fresenius won a court ruling allowing the healthcare group to walk away from its takeover of Akorn.

The U.S. Federal Trade Commission approved Penn National Gaming's purchase of Pinnacle Entertainment.

Merger activity remained unchanged last week with four new deals announced and seven pending 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 2018 122
Total Number of Deals Not Completed in 2018 14
Total Number of Pending Deals
Cash Deals 43
Stock Deals 23
Stock & Cash Deals 14
Special Conditions 4
Total Number of Pending Deals 84
Total Deal Size $1.18 trillion

New Deals:

  1. The acquisition of Pershing Gold Corporation (NASDAQ:PGLC) by Americas Silver Corporation (NYSEMKT:USAS) for $50.78 million in an all-stock deal. Under the terms of the agreement, holders of Pershing common shares will receive 0.715 common shares of Americas Silver for each common share of Pershing by way of a share exchange.
  2. The acquisition of HomeTown Bankshares Corporation (NASDAQ:HMTA) by American National Bankshares (NASDAQ:AMNB) for $95.6 million in an all-stock deal. Under the terms of the agreement, HomeTown shareholders will receive 0.4150 shares of American National common stock for each share of HomeTown common stock.
  3. The acquisition of Hortonworks (NASDAQ:HDP) by Cloudera (NYSE:CLDR) for $1.49 billion in an all-stock deal. Under the terms of the agreement, Hortonworks stockholders will receive 1.305 common shares of Cloudera for each share of Hortonworks stock owned.
  4. The acquisition of Access National Corporation (NASDAQ:ANCX) by Union Bankshares Corporation (NASDAQ:UBSH) for $610 million in an all-stock deal. Under the terms of the merger agreement, each outstanding share of Access common stock will be converted into the right to receive 0.75 shares of Union common stock.

Deal Updates:

  1. October 1, 2018: According to Reuters, Fresenius (OTCQX:FSNUY) won a court ruling allowing the healthcare group to walk away from its takeover of Akorn (NASDAQ:AKRX), sparking a more than 50 percent fall in the U.S. generic drugmaker's shares.
  2. On October 1, 2018, Moody's Corporation (NYSE:MCO) and Reis (NASDAQ:REIS) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to Moody's pending acquisition of Reis expired on September 28, 2018.
  3. On October 1, 2018, United Technologies (NYSE:UTX) won U.S. approval to buy Rockwell Collins (NYSE:COL), as long as it sells certain assets. Chinese approval of the deal is still pending.
  4. On October 1, 2018, The U.S. Federal Trade Commission approved Penn National Gaming's (NASDAQ:PENN) purchase of Pinnacle Entertainment (NYSE:PNK), requiring they divest assets in three Midwestern cities.
  5. On October 3, 2018, Penn National Gaming announced that the Company received approval from the Nevada Gaming Commission and Nevada Gaming Control Board in connection with its pending acquisition of Pinnacle Entertainment.
  6. On October 4, 2018, The Navigators Group (NASDAQ:NAVG) announced that it has established a meeting date of November 16, 2018, for a special meeting of stockholders to vote on a proposal to adopt the previously announced agreement and plan of merger with the Hartford Financial Services Group (NYSE:HIG).
  7. On October 5, 2018, The Federal Energy Regulatory Commission (FERC) approved the merger of CenterPoint Energy (NYSE:CNP) and Vectren Corporation (NYSE:VVC).
  8. On October 5, 2018, Dominion Energy (NYSE:D) and SCANA Corporation (NYSE:SCG) announced that they have reached a settlement agreement with the Public Staff of the North Carolina Utilities Commission and an intervenor that ensures rate stability and service reliability for more than 500,000 PSNC Energy customers. This marks significant progress in their proposed merger.
  9. On October 5, 2018, K2M Group Holdings (NASDAQ:KTWO) announced that it has set November 7, 2018, as the meeting date for a special meeting of its stockholders to vote on a proposal to adopt the previously announced agreement and plan of merger with Stryker Corporation (NYSE:SYK).

Closed Deals:

  1. The acquisition of Xcerra Corporation (NASDAQ:XCRA) by Cohu, Inc. (NASDAQ:COHU) on October 1, 2018. It took 146 days for this deal to be completed.
  2. The acquisition of Andeavor (NYSE:ANDV) by Marathon Petroleum Corp. (NYSE:MPC) on October 1, 2018. It took 154 days for this deal to be completed.
  3. The acquisition of First Connecticut Bancorp (NASDAQ:FBNK) by People's United Financial (NASDAQ:PBCT) on October 1, 2018. It took 104 days for this deal to be completed.
  4. The acquisition of AV Homes (NASDAQ:AVHI) by Taylor Morrison Home Corporation (NYSE:TMHC) on October 2, 2018. It took 117 days for this deal to be completed.
  5. The acquisition of PHH Corporation (NYSE:PHH) by Ocwen Financial Corporation (NYSE:OCN) on October 4, 2018. It took 219 days for this deal to be completed.
  6. The acquisition of Coastway Bancorp (NASDAQ:CWAY) by HarborOne Bancorp (NASDAQ:HONE) on October 5, 2018. It took 204 days for this deal to be completed.
  7. The acquisition of Convergys Corporation (NYSE:CVG) by SYNNEX Corporation (NYSE:SNX) on October 5, 2018. It took 99 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
SIR 09/17/2018 Government Properties Income Trust (NYSE:GOV) $29.26 $20.03 01/31/2019 46.08% 146.26%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (OTC:HHRBF) $5.43 $4.08 12/01/2018 33.09% 223.65%
SCG 01/03/2018 Dominion Energy, Inc. (D) $48.07 $38.75 12/31/2018 24.05% 104.48%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $11.05 12/31/2018 22.17% 96.34%
EGC 06/18/2018 Cox Oil Affiliate (N/A) $9.10 $7.9 10/10/2018 15.19% 2772.15%
KANG 03/26/2018 IK Healthcare Investment Limited (N/A) $20.60 $17.97 10/31/2018 14.64% 232.26%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (OTCPK:TKPYY) $194.74 $173.4 06/30/2019 12.31% 16.95%
STC 03/16/2018 Fidelity National Financial, Inc. (NYSE:FNF) $49.89 $44.9 06/30/2019 11.11% 15.31%
S 04/29/2018 T-Mobile US, Inc. (NASDAQ:TMUS) $7.03 $6.44 06/30/2019 9.23% 12.72%
NXTM 08/07/2017 Fresenius Medical Care (NYSE:FMS) $30.00 $27.55 11/05/2018 8.89% 115.93%

Disclaimer: I hold positions in Rockwell Collins, United Technologies, Pandora (NYSE:P), 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 COL, UTX, P, 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.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.