Merger Arbitrage Mondays - April 22, 2019

|
Includes: ADSW, BEL, BXG, CASM, CMTA, EFII, ELLI, EW, EXPE, GG, GNW, GPIC, INUV, LEXEA, LKSD, MOGO, MXWL, NEM, NITE, OSIR, PACB, S, SFS, STC, TMUS, TNTHF, USG, WCG, WM
by: Asif Suria
Summary

Merger activity increased last week.

The acquisition of Liberty Expedia Holdings (LEXEA) by Expedia Group (EXPE) for $19.5 billion.

The acquisition of Advanced Disposal Services (ADSW) by Waste Management (WM).

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

Deal Statistics:

Total Number of Deals Closed in 2019 70
Total Number of Deals Not Completed in 2019 3
Total Number of Pending Deals
Cash Deals 30
Stock Deals 15
Stock & Cash Deals 12
Special Conditions 3
Total Number of Pending Deals 60
Total Deal Size $858.94 billion

New Deals:

  1. The acquisition of Advanced Disposal Services (NYSE:ADSW) by Waste Management (NYSE:WM) for $4.9 billion or $33.15 per share in cash.
  2. The acquisition of Electronics for Imaging (NASDAQ:EFII) by an affiliate of Siris Capital Group for $1.7 billion or $37.00 per share in cash.
  3. The acquisition of Liberty Expedia Holdings (NASDAQ:LEXEA) by Expedia Group (NASDAQ:EXPE) for $19.5 billion in an all-stock deal. Under the terms of the agreement, each holder of Liberty Expedia Series A common stock and Series B common stock will receive 0.360 of a share of Expedia Group common stock.
  4. The acquisition of Mogo Finance Technology (NASDAQ:MOGO) by Difference Capital Financial (OTC:TNTHF) for $156 million in an all-stock deal. Under the terms of the arrangement agreement, each common share of Mogo will be exchanged for one Difference common share.
  5. The acquisition of Smart & Final Stores (NYSE:SFS) by certain investment funds managed by affiliates of Apollo Global Management for $1.23 billion or $6.50 per share in cash. We added SFS as a potential deal to the Deals in the Works section on February 4, 2019, and the price after the news of the potential deal came out was $6.21.

Deal Updates:

  1. On April 16, 2019, The U.S. Justice Department told T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S) that it has concerns about their merger in its current structure.
  2. On April 16, 2019, Nightstar Therapeutics (NASDAQ:NITE) announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  3. On April 18, 2019, USG Corporation (NYSE:USG) and Gebr. Knauf KG announced that all required regulatory approvals and clearances needed to close the previously announced acquisition of USG by Knauf have been received.
  4. On April 19, 2019, Gaming Partners International Corporation (NASDAQ:GPIC) delivered a written communication to NASDAQ stating that it intends to consummate its merger with Angel Holdings Godo Kaisha on May 1, 2019.

Closed Deals:

  1. The acquisition of Belmond (NYSE:BEL) by LVMH Moët Hennessy Louis Vuitton on April 17, 2019. It took 124 days for this deal to be completed.
  2. The acquisition of Osiris Therapeutics (NASDAQ:OSIR) by Smith & Nephew (NYSE:SNN) on April 17, 2019. It took 36 days for this deal to be completed.
  3. The acquisition of Ellie Mae (NYSE:ELLI) by Thoma Bravo on April 17, 2019. It took 64 days for this deal to be completed.
  4. The acquisition of Clementia Pharmaceuticals (NASDAQ:CMTA) by Ipsen on April 18, 2019. It took 52 days for this deal to be completed.
  5. The acquisition of Goldcorp (NYSE:GG) by Newmont Mining Corporation (NYSE:NEM) on April 18, 2019. It took 94 days for this deal to be completed.
  6. The acquisition of CAS Medical Systems (NASDAQ:CASM) by Edwards Lifesciences Corporation (NYSE:EW) on April 18, 2019. It took 65 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 $1.38 06/30/2019 60.87% 321.99%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.75 04/30/2019 44.80% 2044.00%
S 04/29/2018 T-Mobile US, Inc. $7.56 $5.77 06/30/2019 31.09% 164.45%
MOGO 04/15/2019 Difference Capital Financial Inc. $3.19 $2.75 06/30/2019 15.89% 84.08%
STC 03/19/2018 Fidelity National Financial, Inc. (NYSE:FNF) $50.01 $43.83 06/30/2019 14.09% 74.54%
LKSD 10/31/2018 Quad/Graphics, Inc. (NYSE:QUAD) $7.90 $7 06/30/2019 12.86% 68.01%
WCG 03/27/2019 Centene Corporation (NYSE:CNC) $282.92 $252.29 06/30/2020 12.14% 10.19%
PACB 11/01/2018 Illumina, Inc. (NASDAQ:ILMN) $8.00 $7.39 06/30/2019 8.25% 43.66%
BXG 03/04/2019 BBX Capital Corporation (NYSE:BBX) $16.00 $14.91 05/15/2019 7.31% 116.01%
MXWL 02/04/2019 Tesla, Inc. (NASDAQ:TSLA) $4.75 $4.46 06/30/2019 6.50% 34.40%

Disclaimer: I hold long positions in Celgene, 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.