Seeking Alpha

Merger Arbitrage Mondays - January 28, 2019

by: Asif Suria
Asif Suria
Long/Short Equity, event-driven, insider ownership, Investment Advisor

Merger activity decreased last week with one new deal announced.

The acquisition of UQM Technologies by Danfoss Power Solutions (US) Company.

Hydro One Limited and Avista Corporation announced that the companies have mutually agreed to terminate their previously announced merger agreement.

Merger activity decreased last week with one new deal announced and one pending deal closing.

Deal Statistics:

Total Number of Deals Closed in 2019 17
Total Number of Deals Not Completed in 2019 1
Total Number of Pending Deals
Cash Deals 35
Stock Deals 23
Stock & Cash Deals 16
Special Conditions 4
Total Number of Pending Deals 78
Total Deal Size $586.48 billion

New Deals:

  1. The acquisition of UQM Technologies (NYSEMKT:UQM) by Danfoss Power Solutions (US) Company for $100 million or $1.71 per share in cash.

Deal Updates:

  1. On January 17, 2019, Staples and Essendant (NASDAQ:ESND) announced that, pursuant to the Merger Agreement, affiliates of Staples have extended the expiration time of the previously announced tender offer for all outstanding shares of Essendant's common stock to January 23, 2019. The parties expect the merger to close in early 2019.
  2. On January 22, 2019, SJW Group (NYSE:SJW) and Connecticut Water Service (NASDAQ:CTWS), the parent company of the Maine Water Company, announced, consistent with the companies' previously announced evaluation of the regulatory approach in Connecticut for the proposed merger of SJW Group and CTWS, that Maine Water voluntarily requested to withdraw its application before the Maine Public Utilities Commission.
  3. On January 22, 2019, USG Corporation (NYSE:USG) President and Chief Executive Officer Jennifer F. Scanlon announced that she intends to leave USG upon, and subject to, the completion of the pending merger with Gebr. Knauf KG.
  4. On January 23, 2019, Hydro One Limited (OTC:HRNNF) and Avista Corporation (NYSE:AVA) announced that the companies have mutually agreed to terminate their previously announced merger agreement. This decision follows the recent orders by the Washington Utilities and Transportation Commission and the Idaho Public Utilities Commission which denied approval of the merger.
  5. On January 23, 2019, EnLink Midstream Partners (NYSE:ENLK) EnLink Midstream (NYSE:ENLC) announced that ENLK unitholders overwhelmingly voted to approve the proposed merger agreement. The simplification merger is expected to close on January 25, 2019.
  6. On January 23, 2019, Rowan Companies (NYSE:RDC) announced that it has convened and adjourned the Company's Court and General Meetings that were scheduled to approve resolutions relating to the transaction with Ensco (ESV). Following the completion of the Board's review, the Company will announce the date and times at which the Court and General Meetings will be reconvened in order to provide Rowan shareholders with sufficient time to make an informed decision.
  7. On January 24, 2019, Amcor Limited (AMCRY) and Bemis Company (BMS) announced that they have made significant progress towards closing the all-stock transaction. However, in the United States (US), antitrust approval and completion of shareholder meeting documentation review by the US Securities and Exchange Commission have been delayed due to the partial US government shutdown. As a result, it is now anticipated the transaction will close in the second quarter of calendar year 2019.
  8. On January 24, 2019, Sparton Corporation (NYSE:SPA) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR Act"), with respect to Sparton's pending acquisition by Striker Parent 2018 expired on January 22, 2019, without a request for additional information by the Federal Trade Commission or the Department of Justice.
  9. On January 24, 2019, Shareholders of Investment Technology Group (NYSE:ITG) approved the merger with Virtu Financial (NASDAQ:VIRT). Virtu expects the transaction to close during the first quarter of 2019.
  10. On January 25, 2019, shareholders of Independent Bank (NASDAQ:INDB) approved the merger of Independent and Blue Hills Bancorp (NASDAQ:BHBK).
  11. On January 25, 2019, Chesapeake Energy Corporation (CHK) and WildHorse Resource Development Corporation (NYSE:WRD) jointly announced that, in connection with Chesapeake's pending acquisition of WildHorse, the election deadline for record holders of shares of WildHorse's common stock to elect the form of merger consideration they wish to receive in connection with the transaction is on January 30, 2019.

Closed Deals:

  1. The acquisition of Tesaro (NASDAQ:TSRO) by GlaxoSmithKline (NYSE:GSK) on January 22, 2019. It took 50 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
INUV 11/05/2018 ConversionPoint Technologies, Inc. (N/A) $2.22 $1.23 03/31/2019 80.49% 473.84%
EHIC 04/06/2018 Teamsport Parent Limited (N/A) $13.50 $9.77 03/31/2019 38.18% 224.76%
TAHO 11/14/2018 Pan American Silver Corp. (NASDAQ:PAAS) $4.10 $3.6 02/26/2019 13.89% 174.81%
S 04/29/2018 T-Mobile US, Inc. (NASDAQ:TMUS) $7.02 $6.18 06/30/2019 13.65% 32.55%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (HHRBF) $5.43 $4.78 01/31/2019 13.60% 1654.46%
CELG 01/03/2019 Bristol-Myers Squibb Company (NYSE:BMY) $98.93 $87.62 09/30/2019 12.91% 19.23%
PACB 11/01/2018 Illumina, Inc. (NASDAQ:ILMN) $8.00 $7.17 06/30/2019 11.58% 27.62%
STC 03/16/2018 Fidelity National Financial, Inc. (NYSE:FNF) $47.56 $43.84 06/30/2019 8.48% 20.23%
RHT 10/28/2018 IBM (NYSE:IBM) $190.00 $176.5 12/31/2019 7.65% 8.28%
ORBK 03/19/2018 KLA-Tencor Corporation (NASDAQ:KLAC) $64.21 $60.41 03/31/2019 6.29% 37.01%

Disclaimer: I hold positions in Athenahealth (NASDAQ:ATHN), Finisar (NASDAQ:FNSR), and Pandora (NYSE:P). 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 ATHN, FNSR, P. 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.