Seeking Alpha

Merger Arbitrage Mondays - March 25, 2019

|
Includes: AMID, AMNB, BMY, CELG, DIS, DNR, FIS, FITB, FNF, FOX, GG, GNW, HF, HMTA, IDTI, ILMN, INUV, JLL, LKSD, MBFI, MLNX, MXWL, NEM, NVDA, ORM, PACB, PVAC, QUAD, RNECF, S, STC, TMUS, TSLA, WP
by: Asif Suria
Summary

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

The acquisition of Worldpay by Fidelity National Information Services.

Penn Virginia Corporation and Denbury Resources mutually terminated their previously announced merger agreement.

Merger activity remained unchanged last week with three new deals announced, two pending deals closing and one deal falling apart.

Deal Statistics

Total Number of Deals Closed in 2019 53
Total Number of Deals Not Completed in 2019 2
Total Number of Pending Deals
Cash Deals 30
Stock Deals 19
Stock & Cash Deals 11
Special Conditions 4
Total Number of Pending Deals 64
Total Deal Size $744.08 billion

New Deals

  1. The acquisition of Worldpay (WP) by Fidelity National Information Services (FIS) for $43 billion in a cash-plus-stock deal. Under the terms of the agreement, Worldpay shareholders will be entitled to receive 0.9287 FIS shares and $11.00 in cash for each share of Worldpay.
  2. The acquisition of American Midstream Partners (AMID) by ArcLight Energy Partners Fund for $2.03 billion or $5.25 per share in cash. We added AMID as a potential deal to the Deals in the Works section on January 3, 2019, and the price after the news of the potential deal came out was $3.15.
  3. The acquisition of HFF (HF) by Jones Lang LaSalle Incorporated (JLL) for $2 billion in a cash-plus-stock deal. Under the terms of the agreement, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share.

Deal Updates

  1. On March 20, 2019, American National Bankshares (AMNB) and HomeTown Bankshares Corporation (HMTA) jointly announced that the shareholders of both companies have approved the previously announced merger of HomeTown with and into American.
  2. On March 21, 2019, Penn Virginia Corporation (PVAC) announced that it has mutually agreed with Denbury Resources (DNR) to terminate their previously announced merger agreement.
  3. On March 21, 2019, Owens Realty Mortgage (ORM) announced that its stockholders approved the merger transaction with ReadyCap Merger Sub. The merger is expected to close on March 29, 2019, subject to customary closing conditions.
  4. On March 22, 2019, Renesas Electronics Corporation (OTCPK:RNECF) and Integrated Device Technology (IDTI) announced that they received a notification by the Committee on Foreign Investment in the United States (CFIUS) that the investigation of the companies' proposed merger transaction is complete and that there are no unresolved national security concerns with respect to the transaction.
  5. March 23, 2019: According to Bloomberg, VanEck has joined Paulson & Co. in urging Newmont Mining (NEM) to renegotiate its proposed merger with Goldcorp (GG).

Closed Deals

  1. The acquisition of Twenty-First Century Fox (FOX) by The Walt Disney Company (DIS) on April 20, 2019. It took 461 days for this deal to be completed.
  2. The acquisition of MB Financial (MBFI) by Fifth Third Bancorp (FITB) on March 21, 2019. It took 304 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 $1.29 06/30/2019 72.09% 271.28%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.83 04/30/2019 41.78% 423.56%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.37 $6.25 06/30/2019 17.99% 67.68%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $48.47 $42.7 06/30/2019 13.51% 50.85%
LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) $7.03 $6.19 06/30/2019 13.49% 50.76%
CELG 01/03/2019 Bristol-Myers Squibb Company (BMY) $98.16 $88.15 09/30/2019 11.36% 21.93%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $7.3 06/30/2019 9.59% 36.08%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $118.06 12/31/2019 5.88% 7.64%
MXWL 02/04/2019 Tesla, Inc. (TSLA) $4.75 $4.51 06/30/2019 5.32% 20.02%
GG 01/14/2019 Newmont Mining Corporation (NEM) $11.34 $10.80 12/31/2019 4.96% 6.45%

Disclaimer: I hold long positions in Celgene (CELG), Bristol-Myers Squibb (BMY) and Finisar (FNSR). 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 CELG, BMY, FNSR. 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.