M&A News Deals: Aldridge Mining On Bank Loan Extension

by: Special Situation Investor


Maplewood International is selling its industrial complex in Netherlands.

Ensign Energy might raise the bid for Trinidad.

Papa John's might get a deal by the end of October.

I am not an expert on Turkish banking, however I like the Virtus Mining/Aldridge deal, presuming that if it gets a bank loan extension, it should most probably close providing sweet profit.

It will be interesting to see how will Papa John’s sale situation evolve after all the downfall that resulted from the PR tragedy of the notorious founder. Trian seems like a suitable buyer so far.

I am also watching the B. Riley/magicJack deal, which is subject to only one approval left.

Virtus Mining - Aldridge Minerals (OTC:AGMIF) Taking Private Offer

Spread: 25%.

Aldridge mining is a junior mining company listed in Canada with a project in Turkey. The company had troubles with raising capital for the project developments so the largest shareholder Virtus Mining has offered to take the company private for C$0.1/share. A majority of shareholder votes in favor of the transaction are needed, excluding the shares held by one of the company’s directors Ahmet Tacyildiz (who recently has increased his stake to 43%) and Virtus. Other directors, holding 13% have already entered into the voting agreement in favor of the transaction. The deal is also subject upon the extension of the companies’ C$40m bank loan, which matured on September 16, 2018. So far, the spread is huge, however it is not clear if the loan is going to be extended, especially given that it is a Turkish bank that makes the decision.

Maplewood International REIT (MWI-UN.V) Asset Sale

Spread: 13%

Maplewood International is selling it’s only property in Netherlands, which is a large scale industrial complex. In June 30 it was valued at over 7.3m EUR and the majority proceeds from the sale are going to be distributed to shareholders. Initially it was intended to be C$0.83/share, but due to Canadian Dollar appreciation it now stand at about C$0.79. Shareholders have already approved the sale. The stock is very illiquid, so patience and time is required.

B. Riley Financial (RILY) - magicJack (CALL) Acquisition

Spread: 7%

Israeli - based magicJack, a leading cloud communications company is being acquired by U.S. based B. Riley Financial. This cross-border merger was first announced back in November 9th of 2017 and was expected to close in H1 2018. Despite taking longer time than expected the deal has already received shareholder and all regulatory approvals except one final blessing from FCC. There is no indication on when to expect the last approval.

Other Potential Deals

Virtu Financial (VIRT), one of the largest high frequency trading and market making companies is apparently interested in acquiring Investment Technology Group (ITG). No decision has been made yet, however the companies are in the talks. The transaction size would be similar to the Virtu’s last year acquisition of a competitor KCG Holdings.

Precision Drilling (PDS) has an ambition to become third largest drilling company in U.S. by acquiring Trinidad Drilling (OTCPK:TDGCF) for 0.445 PDS/share. So far the spread is negative and analysts guess that Ensign Energy (OTCPK:ESVIF) could increase their previous bid (C$1.68) made in August, which was not well received by the target company’s board. So far, Trinidad’s board has unanimously approved PDS offer, nonetheless a blessing of more than two thirds of Trinidad’s shareholders will be required as well. Ensign currently owns about 10% of Trinidad.

Trian Fund Management is interested in acquiring Papa John’s International (PZZA). Papa John has been in serious trouble since November last year when the founder John Schnatter blamed NFL players for his company’s sales decrease. These comments received a lot of criticism and the company has lost the partnership with NFL. He stepped down as CEO in January and then in July he got into the spotlight again when using N-word in a conference call and after Forbes released an article that painted a very unpleasant picture of the company by outlining bad behavior of the founder and toxic corporate culture prone to sexual harassment. Since then the company has faced a downfall in sales and share price. Consequently Papa John’s has put effort to distance itself from the ex-CEO, restrained him from acquiring more shares (he already owns 30%) and started looking for a sale. Potential buyer Trian Fund is not new in this industry, it holds 13% shares in Wendy’s, moreover it has been a largest shareholder of Papa John’s rival Domino in 2011-2012 when it pushed the company to update the menu and then exited the investment with a profit. Reportedly there are other interested companies besides Trian. Papa John’s expects to find a buyer by the end of October.

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