Merger Arbitrage Mondays - April 8, 2019

Summary

• Merger activity decreased last week.
• The acquisition of AmeriGas Partners by UGI Corporation.
• SJW Group and Connecticut Water Service jointly filed a new application with the Connecticut Public Utilities Regulatory Authority (“PURA”) for approval of the merger.

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

Deal Statistics

Total Number of Deals Closed in 2019	63
Total Number of Deals Not Completed in 2019	2
Total Number of Pending Deals
Cash Deals	29
Stock Deals	14
Stock & Cash Deals	12
Special Conditions	4
Total Number of Pending Deals	59
Total Deal Size	$778.65 billion

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New Deals

1. The acquisition of AmeriGas Partners (APU) by UGI Corporation (UGI) for $6.66 billion in a cash plus stock deal. Under the terms of the agreement, AmeriGas unitholders will receive 0.50 shares of UGI common stock plus $7.63 in cash consideration for each common unit of AmeriGas.

Deal Updates

1. On April 2, 2019, SI Financial Group (SIFI) announced that the stockholders of the company approved the previously announced merger of the Company with and into Berkshire Hills Bancorp (BHLB).
2. On April 3, 2019, Roche (OTCQX:RHHBY) and Spark Therapeutics (ONCE) announced that Roche has withdrawn its Premerger Notification and Report Form under the Hart-Scott-Rodino Act in connection with Roche's pending acquisition of Spark. As a result of the withdrawal and refiling of the Premerger Notification and Report Form, Roche is extending the offering period of its previously announced tender offer to purchase all of the outstanding shares of common stock of Spark. The offer is being extended until May 2, 2019.
3. On April 3, 2019, SJW Group (SJW) and Connecticut Water Service (CTWS) announced that they have jointly filed a new application with the Connecticut Public Utilities Regulatory Authority ("PURA") for approval of the merger of SJW Group and Connecticut Water.
4. On April 4, 2019, Top Image Systems (TISA) announced that the shareholders of the company voted overwhelmingly to approve the previously announced acquisition by Kofax. Top Image Systems expects the merger to close during the second week of May.
5. On April 4, 2019, Goldcorp (GG) announced that its shareholders voted overwhelmingly in favour of the plan of arrangement to combine with Newmont Mining Corporation (NEM).
6. On April 4, 2019, Harris Corporation (HRS) and L3 Technologies (LLL) announced that their stockholders voted to approve all stockholder proposals necessary to complete the merger of equals transaction to create L3 Harris Technologies, Inc. The merger is expected to close in mid-calendar year 2019.

Closed Deals

1. The acquisition of BSB Bancorp (BLMT) by People's United Financial (PBCT) on April 1, 2019. It took 125 days for this deal to be completed.
2. The acquisition of Immune Design (IMDZ) by Merck (MRK) on April 2, 2019. It took 40 days for this deal to be completed.
3. The acquisition of Pershing Gold Corporation (PGLC) by Americas Silver Corporation (USAS) on April 3, 2019. It took 185 days for this deal to be completed.
4. The acquisition of ARRIS International (ARRS) by CommScope (COMM) on April 4, 2019. It took 147 days for this deal to be completed.
5. The acquisition of Versum Materials (VSM) by Entegris (ENTG) on April 4, 2019. It took 66 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	$1.27	06/30/2019	74.80%	328.95%
GNW	10/23/2016	China Oceanwide Holdings Group Co., Ltd. (N/A)	$5.43	$4	04/30/2019	35.75%	593.13%
S	04/29/2018	T-Mobile US, Inc. (TMUS)	$7.22	$5.63	06/30/2019	28.15%	123.81%
STC	03/19/2018	Fidelity National Financial, Inc. (FNF)	$49.47	$43.63	06/30/2019	13.39%	58.89%
LKSD	10/31/2018	Quad/Graphics, Inc. (QUAD)	$7.80	$6.93	06/30/2019	12.55%	55.21%
PACB	11/01/2018	Illumina, Inc. (ILMN)	$8.00	$7.26	06/30/2019	10.19%	44.82%
WCG	03/27/2019	Centene Corporation (CNC)	$308.74	$283.22	06/30/2020	9.01%	7.32%
CZFC	02/21/2019	German American Bancorp, Inc. (GABC)	$25.69	$23.95	09/30/2019	7.25%	15.13%
MLNX	03/11/2019	NVIDIA Corporation (NVDA)	$125.00	$118.89	12/31/2019	5.14%	7.03%
GPIC	11/27/2018	Angel Holdings Godo Kaisha (N/A)	$13.75	$13.19	06/30/2019	4.25%	18.67%

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Analyst’s 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.

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.

Comments

[Sunshine123]

Many thanks for the good info. I own APU and do not want UGI buying APU. I will sell APU before the merger. There are lawsuits to stop this transaction and I hope it is stopped. If you have any info on this, will you publish it?

[Asif Suria]

Yes if we come across anything about this, we will publish it as a deal update. Regarding lawsuits, there are usually several after a deal is announced and it is often just firms looking to make a quick buck through a settlement and rarely amount to anything.

[southbeachguy42]

Anything on FNF-STC sitting at over 13% discount?

[Alpha$ituations]

Two issues related to the FNF-STC transaction and the spread:

1)Regulatory approval timeframe risk - A resubmission of the Form A filing to the New York State regulator after disapproval by the latter could well lead to further lengthy review putting pressure on the originally targeted timeline of deal completion by 1Q 2019 or 2Q 2019.The transactional parties agreed to extend the agreement deadline by 3 months from March 18 to June 18, 2019, which under the terms of the agreement may extended for a further three month period to September 18, 2019 to allow more time for the receipt of required insurance and antitrust approvals which may be a likely scenario. The transaction also awaits for a decision from the FTC.

2) Pricing adjustment risk - Under the terms of the merger agreement, if the combined company is required to divest assets or businesses for which revenues exceed $75 MN up to a cap of $225 MN in order to
receive the required regulatory approvals, the purchase price will be adjusted down on a pro-rata basis to a minimum purchase price of $45.50 per STC share. The STC share price has been trading below the minimum for a while.

There should be an upate on transaction progress in the next 2 weeks when FNF reports its 1Q 2019 earnings on April 24.

[Ryan Edward]

Great work as always. This list is always appreciated.

I would probably update the GPIC acquisition from 6/30/19 to 12/31/19.

From the latest filing: "We currently anticipate that the merger will be completed by the end of 2019."

[Asif Suria]

You are welcome. Thank you for letting us know about GPIC.

[Alpha$ituations]

Premature on completion of VSM merger with ENTG. In fact, Merck KaAG has just raised its cash counterbid for VSM to $53 from $48, with VSM now deeming it to be a superior offer and effectively abandoning the ENTG merger agreement.

[Tigger1811]

It appears that Asif may have been a bit premature with his ASSUMPTION that the VSM merger with ENTG was completed. Just now received my voting material for the deal from ENTG. Which I totally voted against because I thought that $48 was a better deal. Show me the extra money!!

[Asif Suria]

You guys are right. We were thrown off by the filing of the 25-NSE by VSM, which is one of the things we look for when checking to see if a merger is complete.

www.sec.gov/...