Merger Arbitrage Mondays - Cypress Semiconductor Deal Speculation Confirmed

by: Asif Suria

Merger activity decreased last week.

The acquisition of Total System Services by Global Payments.

The acquisition of Cypress Semiconductor Corporation by Infineon Technologies AG.

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

Deal Statistics:

Total Number of Deals Closed in 2019 83
Total Number of Deals Not Completed in 2019 6
Total Number of Pending Deals
Cash Deals 34
Stock Deals 18
Stock & Cash Deals 11
Special Conditions 2
Total Number of Pending Deals 65
Total Deal Size $947.88 billion

New Deals:

  1. The acquisition of Total System Services (TSS) by Global Payments (GPN) for $21.5 billion in an all stock deal. Under the terms of the merger agreement, TSYS shareholders will receive 0.8101 Global Payments shares for each share of TSYS common stock.
  2. The acquisition of Cypress Semiconductor Corporation (CY) by Infineon Technologies AG (IFNNY) for $9.56 billion or $23.85 per share in cash. We added CY as a potential deal to the Deals in the Works section on May 29, 2019, and the price after the news of the potential deal came out was $17.25.

Deal Updates:

  1. On May 28, 2019, Netshoes Limited (NETS) announced that it has entered into an amendment to the Agreement and Plan of Merger by and among Netshoes, Magazine Luiza S.A. and its subsidiary to increase the Per Share Merger Consideration from US$2.00 to US$3.00.
  2. On May 29, 2019, Brazilian retailer Grupo SBF SA, which controls sports retailer Centauro, has raised its bid for Netshoes. SBF raised its bid, to $3.50 per share, valuing the firm at about $109 million.
  3. On May 30, 2019, Amcor Limited (AMCRY) and Bemis Company (BMS) announce that regulatory clearance has been received from the US Department of Justice in relation to the combination of the two companies.

Closed Deals:

  1. The acquisition of Travelport Worldwide Limited (NYSE:TVPT) by affiliates of Siris Capital Group on May 30, 2019. It took 171 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 $0.69 08/05/2019 221.74% 1284.68%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.91 06/30/2019 86.60% 1170.68%
CY 06/02/2019 Infineon Technologies AG (IFNNY) $23.85 $17.82 01/31/2020 33.84% 51.04%
AVP 05/22/2019 Natura Cosméticos S.A. (NATU3.SA) $4.59 $3.76 01/31/2020 22.01% 33.20%
STC 03/19/2018 Fidelity National Financial, Inc. (FNF) $49.77 $41.13 06/30/2019 21.00% 283.92%
PACB 11/01/2018 Illumina, Inc. (ILMN) $8.00 $6.7 06/30/2019 19.40% 262.30%
WCG 03/27/2019 Centene Corporation (CNC) $315.20 $276.19 06/30/2020 14.12% 13.12%
MLNX 03/11/2019 NVIDIA Corporation (NVDA) $125.00 $109.78 12/31/2019 13.86% 23.98%
S 04/29/2018 T-Mobile US, Inc. (TMUS) $7.53 $6.87 07/29/2019 9.64% 62.81%
LKSD 10/31/2018 Quad/Graphics, Inc. (QUAD) $5.23 $4.85 06/30/2019 7.86% 106.27%

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.

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