Merger Arbitrage Mondays: International Speedway Corporation Acquired By NASCAR Holdings

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Includes: BBX, BMY, BXG, CELG, CNC, FRSH, GNW, HIG, INUV, ISCA, ISRL, LKSD, MLNX, NAVG, NETS, NUACF, PACB, S, STC, TMUS, WCG, ZAYO
by: Asif Suria
Summary

Merger activity increased last week.

The acquisition of Avon Products by Natura Cosméticos S.A.

BBX Capital Corporation decided to not proceed with its previously announced merger with Bluegreen Vacations Corporation.

Merger activity increased last week with three new deals announced, two pending deals closing and one deal terminated.

Deal Statistics:

Total Number of Deals Closed in 2019 82
Total Number of Deals Not Completed in 2019 6
Total Number of Pending Deals
Cash Deals 34
Stock Deals 17
Stock & Cash Deals 11
Special Conditions 2
Total Number of Pending Deals 64
Total Deal Size $916.73 billion

New Deals:

  1. The acquisition of Isramco (NASDAQ:ISRL) by Naphtha Israel Petroleum Corporation for $393.11 million or $121.40 per share in cash.
  2. The acquisition of International Speedway Corporation (NASDAQ:ISCA) by NASCAR Holdings for $2 billion or $45.00 per share in cash. We added ISCA as a potential deal to the Deals in the Works section on November 9, 2018 and the price after the news of the potential deal came out was $39.06.
  3. The acquisition of Avon Products (NYSE:AVP) by Natura Cosméticos S.A. (OTC:NUACF) for $3.7 billion in an all-stock deal. As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created. Under the terms of the agreement, Avon shareholders will receive a fixed exchange ratio of 0.300 Natura Holding shares for each share of Avon common stock. Upon closing, Natura Holding S.A.s’ stock will be listed on B3 with a 55% public float and it will also have ADRs listed on the NYSE. Avon shareholders will have the option to receive ADRs traded on the NYSE or shares listed on B3.

Deal Updates:

  1. On May 20, 2019, FCC Commissioner Brendan Carr announced his support for the merger between wireless providers T-Mobile (NASDAQ:TMUS) and Sprint (NYSE:S).
  2. On May 22, 2019, BBX Capital Corporation (NYSE:BBX) announced that it has made a determination not to proceed with its previously announced merger which would have taken Bluegreen Vacations Corporation (NYSE:BXG) private.
  3. On May 23, 2019, Netshoes Limited (NYSE:NETS) announced that it received an unsolicited proposal from Grupo SBF S.A.
  4. On May 24, 2019, Centene (NYSE:CNC) and WellCare Health Plans (NYSE:WCG) set June 24, 2019 as the date for a critical shareholder vote to approve their proposed $17.3 billion merger.
  5. On May 24, 2019, Bristol-Myers Squibb Company (NYSE:BMY) announced the extension of the expiration date of the offers to exchange notes issued by Celgene Corporation (NASDAQ:CELG) Bristol-Myers Squibb has extended the expiration date from June 3, 2019 to July 8, 2019.

Closed Deals:

  1. The acquisition of Papa Murphy's Holdings (NASDAQ:FRSH) by MTY Food Group on May 23, 2019. It took 42 days for this deal to be completed.
  2. The acquisition of The Navigators Group (NASDAQ:NAVG) by The Hartford Financial Services Group (NYSE:HIG) on May 23, 2019. It took 274 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol AnnouncedDate AcquiringCompany ClosingPrice LastPrice ClosingDate Profit AnnualizedProfit
INUV 11/05/2018 ConversionPoint Technologies, Inc. (N/A) $2.22 $0.5 08/05/2019 344.00% 1793.71%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.22 06/30/2019 68.63% 736.80%
AVP 05/22/2019 Natura Cosméticos S.A. $4.36 $3.7 01/31/2020 17.95% 26.31%
PACB 11/01/2018 Illumina, Inc. (NASDAQ:ILMN) $8.00 $6.8 06/30/2019 17.65% 189.45%
STC 03/19/2018 Fidelity National Financial, Inc. (NYSE:FNF) $49.96 $42.81 06/30/2019 16.70% 179.33%
MLNX 03/11/2019 Nvidia Corporation (NASDAQ:NVDA) $125.00 $109.75 12/31/2019 13.90% 23.26%
WCG 03/27/2019 Centene Corporation $312.22 $275.53 06/30/2020 13.32% 12.15%
S 04/29/2018 T-Mobile US, Inc. $7.92 $7.16 07/29/2019 10.68% 61.89%
LKSD 10/31/2018 Quad/Graphics, Inc. (NYSE:QUAD) $5.79 $5.34 06/30/2019 8.50% 91.22%
ZAYO 05/08/2019 affiliates of Digital Colony Partners and EQT Infrastructure IV fund (N/A) $35.00 $32.62 06/30/2020 7.30% 6.66%

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: 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.