« Handelsblatt, Kommentar : Ratingagenturen, Aufseher zementieren die Macht der Ratings | Main | Hedging Lufthansa Treibstoffkosten »
Arbitrage Spreads On Pending Mergers & Acquisitions
By Martin | January 7, 2010
3Com Corp. (COMS), Hewlett-Packard Co. (HPQ)
Premium offered: $0.36 or 4.77%
Acquirer: HPQ
Target: COMS
Offer per share: $7.90 cash
Value of outstanding common equity: $3,098,143,000
Target share price: $7.54
Acquirer share price: $52.04
Expected closing: 1st Half 2010 4/1/2010
Annualized gain: 20.75%
Note: Deal has been approved by the boards of both companies. The U.S. SEC
has reportedly opened an investigation of COMS option activity ahead of the
merger annoucement. The investgation is focused on illegal profits through
the use of advance knowledge of the deal.
Affiliated Computer Services Inc. (ACS), Xerox Inc. (XRX)
Premium offered: $0.53 or 0.88%
Acquirer: XRX
Target: ACS
Offer per share: 4.935 share and $18.60 per share
Value of offer per share: $60.86
Value of outstanding common equity securities: $5,942,214,664
Acquirer share price: $8.56
Target share price: $60.33
Expected closing: First Quarter 2/14/2010
Annualized gain: 8.41%
Note: Xerox has agreed to assume ACS’s $2B in debt and issue $300M of
convertible stock to ACS’s class B shareholders. Xerox also expects to sell
between $2B adn $3B in bonds to finance the acquisition. Directors of both
cos approved the deal as chairman of ACS plans to resign after the merger.
ACS and Xerox, resolving a shareholder lawsuit, agree that ACS Chariman
Deason won’t be forced to vote any of his shares of ACS in favor of the deal
if ACS gets a higher offer and withdraws its recommendation for the Xerox
acquisition and won’t complete deal until all Class A shareholders agree.
Xerox completed a $2 billion debt offering to cover part of ACS’s senior
credit facility. Shareholders of both cos will vote on the merger on Feb. 5.
Airvana (AIRV), SAC Private Capital
Premium offered: $0.05 or 0.66%
Acquirer: SAC Private Capital
Target: AIRV
Offer per share: $7.65 stock
Value of outstanding common equity: $478,737,000
Target share price: $7.60
Acquirer share price: N/A
Expected closing: By End of 1Q 2/12/2010
Annualized gain: 6.58%
Note: Airvana’s Board of Directors and Special Committee have approved the
deal.
Allied Capital Corp. (ALD), Ares Capital Corp. (ARCC)
Premium offered: $0.31 or 8.01%
Acquirer: ARCC
Target: ALD
Shares offered per share: 0.325 shares
Value of offer per share: $4.24
Value of outstanding common equity: $760,248,158
Acquirer share price: $13.06
Target share price: $3.93
Expected closing: First Quarter 2010 2/14/2010
Annualized gain: 75.95%
Note: Upon closing of the deal, ARCC shareholders will own about 65% of the
merged company and ALD holders 35%.
Allion Healthcare Inc. (ALLI), H.I.G. Capital LLC (Private)
Premium offered: $0.01 or 0.15%
Acquirer: H.I.G. Capital
Target: ALLI
Offer per share: $6.60 cash
Value of outstanding common equity: $176,022,000
Target share price: $6.59
Acquirer share price: N/A
Expected closing: First Quarter 2010 2/14/2010
Annualized gain: 1.46%
Note: H.I.G will repay ALLI debt of $79M as part of the merger pact.
Amicas Inc. (AMCS), Thoma Bravo LLC (Private)
Premium offered: -$0.07 or -1.29%
Acquirer: Thoma Bravo
Target: AMCS
Offer per share: $5.35 cash
Value of outstanding common equity: $190,995,000
Target share price: $5.42
Acquirer share price: N/A
Expected closing: 1Q 2010 2/14/2010
Annualized gain: -12.24%
BJ Services Co. (BJS), Baker Hughes Inc. (BHI)
Premium offered: $0.28 or 1.35%
Acquirer: BHI
Target: BJS
Offer per share: 0.40035 share and $2.69 per share
Value of offer per share: $20.90
Value of outstanding common equity securities: $6,104,699,806
Acquirer share price: $45.48
Target share price: $20.62
Expected closing: N/A
Annualized gain: N/A
Note: BJS and BHI received a second request from the U.S. Justice Department
for additional information about their proposed merger. The cos said they
would comply with the request promptly.
Black & Decker Corp. (BDK), Stanley Works (SWK)
Premium offered: $0.74 or 1.06%
Acquirer: SWK
Target: BDK
Shares offered per share: 1.275 share
Value of offer per share: $70.57
Value of outstanding common equity: $4,246,272,113
Acquirer share price: $55.35
Target share price: $69.83
Expected closing: N/A
Annualized gain: N/A
Note: Both Companies’ boards and the have approved the deal and SWK
shareholders will hold a small majority stake in the combined company, at
50.5%. Deal also gets anti-trust OK.
BPW Acquisition Corp. (BPW), Talbots Inc. (TLB)
Premium offered: $0.45 or 4.18%
Acquirer: TLB
Target: BPW
Shares offered per share: 1.086 share
Value of offer per share: $11.25
Value of outstanding common equity: $463,314,533
Acquirer share price: $10.36
Target share price: $10.80
Expected closing: N/A
Annualized gain: N/A
Note: BPW units consist of one share of BPW and one warrant to buy BPW
stock. Unitholders will receive between 0.9 and 1.3235 Talbots shares per
BPW share, and the warrants will be converted on a 50/50 basis into either
new Talbots warrants or new shares of Talbots, whose worth depends on
Talbots’ stock price. Upon completion, BPW unitholders would own between
60.4% and 69.1% of the merged company, which will continue trading under
Talbots’ ticker symbol. BPW shares will receive less than the $11.25
contemplated consideration if Talbots trades below $8.50, and more than that
if it trades above $12.50 when the merger closes.
Burlington Northern Santa Fe Corp. (BNI), Berkshire Hathaway Inc. (BRK.A,
BRK.B)
Premium offered: $1.20 or 1.21%
Acquirer: BRK.A
Target: BNI
Offer per share: $100.00 cash and stock
Value of outstanding common equity: $34,044,000,000
Target share price: $98.80
Acquirer share price: $99,665.00
Expected closing: First Quarter 2010 2/14/2010
Annualized gain: 11.67%
Note: BNI shareholders will have the option to receive either a cash payment
of $100 or a variable number of Berkshire shares, subject to a proration if
the elections do not equal roughly 60% cash/ 40% stock. The stock component
is subject to a collar where the value of each Berkshire share received is
fixed at $100 if the price of Berkshire closes between about $80,000 and
$125,000 a share. Outside the collar, shares of BRK.A received will be fixed
at either 0.001253489 per BNI below the collar and 0.000802233 per share of
BNI above the collar. Shareholders may also choose between Class A or the
equivalent economic value of Class B Berkshire shares. The deal requires the
approval by holders of 2/3 BNI outstanding shares. Berkshire said it will
borrow roughly $8 billion to finance the transaction and shareholders of the
compnay will meet Jan. 20 to undertake a 50-to-1 split of its Class B shares.
California Micro Devices Corp. (CAMD), ON Semiconductor Corp. (ONNN)
Premium offered: $0.01 or 0.21%
Acquirer: ONNN
Target: CAMD
Offer per share: $4.70 cash
Value of outstanding common equity: $107,348,000
Target share price: $4.69
Acquirer share price: $8.93
Expected closing: 1Q 2010 2/14/2010
Annualized gain: 2.02%
Note: On Semiconductor’s tender offer is expected to close Jan. 26.
Cedar Fair LP (FUN), Apollo Global Management (Private)
Premium offered: -$0.19 or -1.63%
Acquirer: Apollo Global
Target: FUN
Offer per share: $11.50 cash
Value of outstanding common equity: $634,915,000
Target share price: $11.69
Acquirer share price: N/A
Expected closing: By Early 2Q 2/27/2010
Annualized gain: -11.52%
Chattem Inc. (CHTT), Sanofi-Aventis (SNY)
Premium offered: $0.44 or 0.47%
Acquirer: SNY
Target: CHTT
Offer per share: $93.50 cash
Value of outstanding common equity: $1,780,240,000
Target share price: $93.06
Acquirer share price: $39.75
Expected closing: 1Q 2010 2/14/2010
Annualized gain: 4.48%
Diedrich Coffee (DDRX),Green Mountain Coffee Roasters Inc. (GMCR)
Premium offered: $0.06 or 0.17%
Acquirer: GMCR
Target: DDRX
Offer per share: $35.00 cash
Value of outstanding common equity: $200,550,000
Target share price: $34.94
Acquirer share price: $81.10
Expected closing: Early 2010 4/1/2010
Annualized gain: 0.75%
Note: After a lengthy bidding war with Peet’s Coffee & Tea Inc. (PEET),
Green Mountain comes out on top with the highest offer and takes over DDRX.
Green Mountain expects to close the transaction promptly in early 2010. The
deal provides for a graduated reverse break-up fee, starting at $8.517
million for a termination before Feb. 15 and increases by $1 million in each
subsequent 60-day period through June 15.
ICT Group Inc. (ICTG), Sykes Enterprises Inc. (SYKE)
Premium offered: $0.02 or 0.11%
Acquirer: SYKE
Target: ICTG
Offer per share: 0.3423 share and $7.69 per share
Value of offer per share: $16.37
Value of outstanding common equity securities: $2,774,749,217
Acquirer share price: $25.35
Target share price: $16.35
Expected closing: 2/2/2010
Annualized gain: 1.49%
Note: Each issued and outstanding share of ICTG will be converted into $7.69
in cash and SYKES stock with a value of $7.69, subject to a collar
mechanism. If the average SYKE share price is at/above $22.4652, the
exchange ratio will be 0.3423 SYKE share per ICTG share; at/below $19.3306,
the ratio becomes 0.3978 SYKE share per ICTG share. ICTG sets Feb. 2 as
voting date on the merger.
IMS Health (RX), TPG Capital (Private)
Premium offered: $0.60 or 2.80%
Acquirer: TPG Capital
Target: RX
Offer per share: $22.00 cash
Value of outstanding common equity: $4,013,680,000
Target share price: $21.40
Expected closing: By End of 1Q 2010 2/16/2010
Annualized gain: 25.58%
Note: The deal includes the assumption of RX debt and has yet to be approved
by shareholders of the company. A special meeting will be held Feb. 8
regarding the merger.
Iowa Telecommunication Services Inc. (IWA), Windstream Corp. (WIN)
Premium offered: -$0.10 or -0.60%
Acquirer: WIN
Target: IWA
Offer per share: 0.804 share and $7.90 per share
Value of offer per share: $16.75
Value of outstanding common equity securities: $549,623,881
Acquirer share price: $11.01
Target share price: $16.85
Expected closing: mid 2010 4/1/2010
Annualized gain: -2.63%
Note: The boards of both companies have approve the deal and hope to close
it in mid-2010.
MPS Group Inc. (MPS), Adecco Group (Private)
Premium offered: $0.03 or 0.22%
Acquirer: Adecco
Target: MPS
Offer per share: $13.80 cash
Value of outstanding common equity: $1,285,332,000
Target share price: $13.77
Acquirer share price: N/A
Expected closing: First Quarter 2010 2/14/2010
Annualized gain: 2.09%
Note:EU Commission cleared the Adecco/MPS deal on 12/18 as MPS also settles
shareholder lawsuits.
On2 Technologies Inc. (ONT), Google Inc. (GOOG)
Premium offered: $0.01 or 1.50%
Acquirer: GOOG
Target: ONT
Offer per share: 0.001 share and $0.15 per share
Value of offer per share: $0.75
Value of outstanding common equity securities: $131,981,589
Acquirer share price: $601.99
Target share price: $0.74
Expected closing: N/A
Annualized gain: N/A
Note: On2 shareholders file lawsuit against Google Aug. 10 claiming the
deal’s price tag was unfair. In December, ONT adjourned shareholder meeting
several times and a month later the companies amended the merger agreement
so ONT holders would receive 15 cents a share in cash in addition to .0010
shares of Google stock. The amendement accounts for the rise in Google’s
stock price since the merger was announced in August. ONT holders will
reconvene Feb. 17 to consider the deal.
PepsiAmericas Inc. (PAS), PepsiCo Inc. (PEP)
Premium offered: $0.16 or 0.53%
Acquirer: PEP
Target: PAS
Offer per share: 0.2511 share and $14.25 per share
Value of offer per share: $29.52
Value of outstanding common equity securities: $3,674,591,142
Acquirer share price: $60.82
Target share price: $29.37
Expected closing: Early 2010 2/16/2015
Annualized gain: 0.10%
Note: Under the agreement, PAS shareholders have the option to select either
$28.50 in cash or 0.5022 shares of PEP stock. EU approves the deal.
Pepsi Bottling Group Inc. (PBG), PepsiCo Inc. (PEP)
Premium offered: $0.21 or 0.56%
Acquirer: PEP
Target: PBG
Offer per share: 0.3216 share and $18.25 per share
Value of offer per share: $37.81
Value of outstanding common equity securities: $8,147,236,742
Acquirer share price: $60.82
Target share price: $37.60
Expected closing: Early 2010 2/16/2010
Annualized gain: 5.09%
Note: Under the agreement, PBG shareholders have the option to select either
$36.50 in cash or 0.6432 shares of PEP stock. EU approves deal.
Quixote Corp. (QUIX), Trinity Industries Inc. (TRN)
Premium offered: $0.05 or 0.79%
Acquirer: TRN
Target: QUIX
Offer per share: $6.38 cash
Value of outstanding common equity: $59,525,400
Target share price: $6.33
Acquirer share price: N/A
Expected closing: 1Q 2010 2/14/2010
Annualized gain: 7.49%
Silicon Storage Technology Inc. (SSTI), Prophet Equity LP
Premium offered: -$0.48 or -18.60%
Acquirer: Prophet Equity LP
Target: SSTI
Offer per share: $2.10 cash
Value of outstanding common equity: $201,285,000
Target share price: $2.58
Acquirer share price: N/A
Expected closing: 2Q 2010 5/16/2010
Annualized gain: -52.64%
Note: Deal has been approved by the SSTI board. The CEO, COO have agreed to
exchange their shares for shares in the resulting private company. SSTI has
45 days from the start of the tender offer to shop around for a higher bid.
A committee representing a 13.1% stake in SSTI said on 1/4/2010 it would
vote against the merger. A Full Value Committee has said it oppses the SSTI
merger with Prophet Equity.
Sun Microsystems Inc. (JAVA), Oracle Corp. (ORCL)
Premium offered: $0.12 or 1.28%
Acquirer: ORCL
Target: JAVA
Offer per share: $9.50 cash
Value of outstanding common equity: $7,074,650,000
Target share price: $9.38
Acquirer share price: $24.35
Expected closing: N/A
Annualized gain: N/A
Note: The U.S. Justice Department cleared the way for Oracle’s acquisition
of Sun Microsystems about a month after Sun’s shareholders approved the
deal. Oracle withdrew its application for clearance in Russia where
authorities are unwilling to approve the deal ahead of a decision from the
European Commission. The EC objected to the deal, saying Sun’s MySQL
database software would reduce competition in the database market. The
European Union later extended its review of the deal to the end of Jan.
after Oracle asked for the extension to allow it more time to respond to the
concerns the Commission voiced. A bipartisan group of U.S. senators have
been urging the European Commission to speed up its investigation into the
ORCL/JAVA deal, saying JAVA’s financial position has become more precarious
as the EC’s inquiry has continued. Oracle’s Chief Executive Larry Ellison
has said he’s willing to create a separate entity to house its MySQL open
database business in order to placate European regulators and follow through
with the acquisition.
Source 
ow Jones Newswires
Topics: arbitrage spreads | No Comments »
Comments
You must be logged in to post a comment.