Merger Arbitrage Mondays - December 3, 2018

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Includes: AET, AFSI, BLMT, COL, CORI, CSFL, CVS, D, DM, DVMT, EGN, EHIC, EQGP, ETRN, FNF, GNW, HIFR, IMPV, INUV, KANG, LHO, NAP, NCOM, NNA, ORIG, PAAS, PBCT, RSYS, S, SHPG, STC, TAHO, TKPYY, TLP, TMUS, UTX
by: Asif Suria
Summary

Merger activity increased last week with six new deals announced.

The acquisition of Dominion Energy Midstream Partners by Dominion Energy.

Imperva announced the expiration of the 45-day go-shop period.

Merger activity increased last week with six new deals announced and six pending deals closing.

Deal Statistics:

Total Number of Deals Closed in 2018 153
Total Number of Deals Not Completed in 2018 14
Total Number of Pending Deals
Cash Deals 47
Stock Deals 33
Stock & Cash Deals 15
Special Conditions 6
Total Number of Pending Deals 101
Total Deal Size $1.36 trillion

New Deals:

  1. The acquisition of National Commerce Corporation (NASDAQ:NCOM) by CenterState Bank Corporation (NASDAQ:CSFL) for $850.4 million in an all stock deal. Under the terms of the agreement, National Commerce shareholders will receive 1.65 shares of CSFL common stock for each outstanding share of National Commerce common stock.
  2. The acquisition of Transmontaigne Partners (NYSE:TLP) by ArcLight Energy Partners for $536 million or $41.00 per share in cash.
  3. The acquisition of Dominion Energy Midstream Partners (NYSE:DM) by Dominion Energy (NYSE:D) for $2.34 billion in an all stock deal. Under the terms of the agreement, Dominion Energy will acquire all outstanding public common units of Dominion Energy Midstream in exchange for 0.2492 Dominion Energy common shares per unit.
  4. The acquisition of BSB Bancorp (NASDAQ:BLMT) by People’s United Financial (NASDAQ:PBCT) for $327 million in an all stock deal. Under the terms of the agreement, BSB Bancorp stockholders will receive 2 shares of People’s United Financial stock for each BSB Bancorp share.
  5. The acquisition of Gaming Partners International Corporation (NASDAQ:GPIC) by Angel Holdings Godo Kaisha for $110 million or $13.75 per share in cash.
  6. The acquisition of EQGP Holdings (NYSE:EQGP) by Equitrans Midstream Corporation (NYSE:ETRN) for $7.12 billion or $20.00 per share in cash.

Deal Updates:

  1. On November 26, 2018, Imperva (NASDAQ:IMPV) announced the expiration of the 45-day go-shop period included in the previously announced merger agreement with Thoma Bravo.
  2. On November 29, 2018, Ocean Rig UDW (NASDAQ:ORIG) announced that its shareholders have approved the merger of the company with Transocean.
  3. On November 29, 2018, iKang Healthcare Group (NASDAQ:KANG), announced that its board of directors has unanimously approved the extension of its Rights Agreement, presently scheduled to expire on December 2, 2018, for another year.
  4. On November 30, 2018, Radisys Corporation (NASDAQ:RSYS) announced that the Committee on Foreign Investment in the United States (CFIUS) completed its review of the planned acquisition of the Company by Reliance Industries (RIL). The parties expect to consummate the merger on December 7, 2018 or on such other date as the parties mutually agree.
  5. On November 30, 2018, Oncor Electric Delivery Company filed a Sale, Transfer, Merger application with the Public Utility Commission of Texas (PUCT) as part of its proposed purchase of InfraREIT (NYSE:HIFR).

Closed Deals:

  1. The acquisition of Rockwell Collins (COL) by United Technologies (NYSE:UTX) on November 26, 2018. It took 448 days for this deal to be completed.
  2. The acquisition of Corium International (CORI) by Gurnet Point Capital on November 27, 2018. It took 47 days for this deal to be completed.
  3. The acquisition of Aetna (AET) by CVS Health (NYSE:CVS) on November 28, 2018. It took 360 days for this deal to be completed.
  4. The acquisition of AmTrust Financial Services (AFSI) by Karfunkel-Zyskind Family on November 29, 2018. It took 273 days for this deal to be completed.
  5. The acquisition of Energen Corporation (EGN) by Diamondback Energy (NASDAQ:FANG) on November 29, 2018. It took 107 days for this deal to be completed.
  6. The acquisition of LaSalle Hotel Properties (LHO) by Pebblebrook Hotel Trust (NYSE:PEB) on November 30, 2018. It took 85 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol AnnouncedDate AcquiringCompany ClosingPrice LastPrice ClosingDate Profit AnnualizedProfit
INUV 11/05/2018 ConversionPoint Technologies, Inc. (N/A) $2.22 $1.13 03/31/2019 96.46% 298.37%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $10.3 12/31/2018 31.07% 404.99%
NAP 10/08/2018 Navios Maritime Acquisition Corporation (NYSE:NNA) $2.88 $2.39 12/31/2018 20.55% 267.91%
TAHO 11/14/2018 Pan American Silver Corp. (NASDAQ:PAAS) $4.10 $3.51 03/31/2019 16.81% 51.99%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $4.66 12/01/2018 16.52% -3015.56%
KANG 03/26/2018 IK Healthcare Investment Limited (N/A) $20.60 $17.86 12/31/2018 15.34% 199.99%
DVMT 07/02/2018 Dell (N/A) $120.00 $105.48 12/31/2018 13.77% 179.44%
S 04/29/2018 T-Mobile US, Inc. (NASDAQ:TMUS) $7.02 $6.28 06/30/2019 11.79% 20.59%
SHPG 05/08/2018 Takeda Pharmaceutical Company Limited (OTCPK:TKPYY) $194.74 $175.58 01/08/2019 10.91% 110.64%
STC 03/16/2018 Fidelity National Financial, Inc. (NYSE:FNF) $46.59 $42.06 06/30/2019 10.77% 18.80%

Disclaimer: I hold positions in Finisar (FNSR), Pandora (P) and Radisys (RSYS). 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 FNSR, P, RSYS. 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.