Merger Arbitrage Mondays - Supercomputer Company Cray Acquired By Hewlett Packard Enterprise

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Includes: AMBR, BBX, BHLB, BXG, CNC, CRAY, FNF, GNW, HIFR, HPE, ILMN, INUV, LKSD, MLNX, MRT, MXWL, NVDA, OHI, ONCE, PACB, QUAD, RHHBY, S, SIFI, STC, TMUS, TSLA, WCG, ZAYO
by: Asif Suria
Summary

Merger activity decreased last week.

The acquisition of Cray by Hewlett Packard Enterprise.

Roche and Spark Therapeutics intend to refile on or about 23 May 2019 their respective Premerger Notification.

After a very active prior week where we saw nine new deals announced, merger activity decreased last week with two new deals announced and four pending deals closing.

Deal Statistics:

Total Number of Deals Closed in 2019 80
Total Number of Deals Not Completed in 2019 5
Total Number of Pending Deals
Cash Deals 35
Stock Deals 16
Stock & Cash Deals 11
Special Conditions 2
Total Number of Pending Deals 64
Total Deal Size $912.63 billion

New Deals:

  1. The acquisition of Amber Road (NYSE:AMBR) by E2open for $425 million or $13.05 per share in cash.
  2. The acquisition of Cray (NASDAQ:CRAY) by Hewlett Packard Enterprise (NYSE:HPE) for $1.3 billion or $35.00 per share in cash.

Deal Updates:

  1. May 13, 2019: T-Mobile US (NASDAQ:TMUS) and Sprint (NYSE:S), fighting to win regulatory clearance for their merger, are considering possible concessions to salvage the deal, according to people familiar with the situation.
  2. On May 14, 2019, Roche (OTCQX:RHHBY) and Spark Therapeutics (NASDAQ:ONCE) announced that they intend to refile on or about 23 May 2019 their respective Premerger Notification and Report Forms under the Hart-Scott-Rodino Act.

Closed Deals:

  1. The acquisition of Maxwell Technologies (NASDAQ:MXWL) by Tesla (NASDAQ:TSLA) on May 16, 2019. It took 101 days for this deal to be completed.
  2. The acquisition of InfraREIT (NYSE:HIFR) by Oncor Electric Delivery Company on May 16, 2019. It took 210 days for this deal to be completed.
  3. The acquisition of MedEquities Realty Trust (NYSE:MRT) by Omega Healthcare Investors (NYSE:OHI) on May 17, 2019. It took 135 days for this deal to be completed.
  4. The acquisition of SI Financial Group (NASDAQ:SIFI) by Berkshire Hills Bancorp (NYSE:BHLB) on May 17, 2019. It took 157 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 $0.65 06/30/2019 241.54% 2150.28%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.33 06/30/2019 63.06% 561.42%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.73 $6.18 07/29/2019 25.08% 130.77%
STC 03/19/2018 Fidelity National Financial, Inc. (NYSE:FNF) $50.26 $42.93 06/30/2019 17.07% 151.93%
LKSD 10/31/2018 Quad/Graphics, Inc. (NYSE:QUAD) $6.24 $5.45 06/30/2019 14.45% 128.64%
WCG 03/27/2019 Centene Corporation (NYSE:CNC) $309.42 $274.7 06/30/2020 12.64% 11.33%
MLNX 03/11/2019 NVIDIA Corporation (NASDAQ:NVDA) $125.00 $112.89 12/31/2019 10.73% 17.40%
PACB 11/01/2018 Illumina, Inc. (NASDAQ:ILMN) $8.00 $7.23 06/30/2019 10.65% 94.81%
ZAYO 05/08/2019 Affiliates of Digital Colony Partners and EQT Infrastructure IV fund (N/A) $35.00 $32.7 06/30/2020 7.03% 6.31%
BXG 03/04/2019 BBX Capital Corporation (NYSE:BBX) $16.00 $14.96 06/30/2019 6.95% 61.89%

Disclosure: I am/we are long RHT, 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.

Additional disclosure: Disclaimer: I hold long positions in Red Hat (RHT), 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.