Merger Arbitrage Mondays – May 24, 2010

The slowdown in merger announcements two weeks ago appears to have only been a temporary breather. For the first time since we launched this service in mid-March, we have seen seven new mergers announced in a single week. Besides the seven new all cash deals announced last week, we had one deal that closed. The deal that closed was the acquisition of Zenith National Insurance (ZNT) by Fairfax on May 20.

The new deals include the acquisition of OSI Pharma (OSIP) by Japan’s Astellas Pharma for $57.50 per share in cash, the acquisition of The South Financial Group (TSFG) by the TD Bank Financial Group for $0.28 in cash or 0.004 shares of TD Bank for each South Financial Group common share held, the acquisition of Virtual Radiological (VRAD) by Providence Equity for $17.25 per share in cash, the acquisition of Double – Take Software (DBTK) by Vision Solutions for $10.55 per share in cash, the acquisition of EF Johnson Technologies (EFJI) by Francisco Partners for $1.05 per share in cash, the acquisition of GLG Partners (GLG) by Man Group for $4.50 per share in cash and the acquisition of Psychiatric Solutions (PSYS) by Universal Health Services for $33.75 per share in cash.

Please note that we revised the closing price of CPI International (CPII) downward to $15.59 from $16.4 last week when the merger with Comtech Telecommunications (CMTL) was announced. The reason for the downward revision was on account of the cash plus stock nature of the deal where the stock portion is determined by a ratio. As stated last week, if the merger is completed, CPI International shareholders will receive a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing. The fraction shall not be greater than 0.2382 nor less than 0.2132. Using the midpoint of this range (0.2257) and multiplying by the price of Comtech as of last Friday ($29.15), the stock portion of the deal fell to $6.58 from $7.4 last week.

	Symbol	Anno. Date	Acquiring Company	Closing Value	Closing Price	Last Price	Closing Date	Profit	Annu. Profit
+	ADG	1/19/2010	Chemring Group Plc	$59 million	7.25	3.64	5/31/2010	99.18%	5171.31%
Details of Allied Defense Group Inc.: Expected to close by April 19, 2010 for a closing value of $59mn. The closing price for the cash deal is $7.25 per share
+	AYE	2/11/2010	FirstEnergy	$8.5 billion	23.26	19.9	3/31/2011	16.88%	20.07%
Details of Allegheny Energy Inc.: Expected to close by March 31, 2011 for a closing value $8.5bn. It is a stock based transaction @ 0.667 share of FE
+	SSE	2/23/2010	Naugatuck Valley Financial Corp	$19.5 million	7.25	6.41	8/16/2010	13.10%	58.33%
Details of Southern Connecticut Bancorp Inc.: Expected to close by the third calendar quarter of 2010, for a closing value of $19.5mn @ $7.25/share. The Cash/stock election is subject to proration
+	Q	4/22/2010	Century Link	$10.6 billion	5.53	5.01	4/21/2011	10.38%	11.59%
Details of Qwest Communications International Inc.: Expected to close in the first half of 2011for a value of $10.6bn. Under the terms of the agreement, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing.
+	PINN	2/24/2010	Investor Group lead by Scotia Waterous (USA)	$11 million	0.34	0.31	6/30/2010	9.68%	98.12%
Details of Pinnacle Gas Resources, Inc.: Expected to close by the second quarter of 2010 for a closing value of $11mn. It is a cash deal @ $0.34 per share
+	STBK	3/18/2010	Roma Financial Corp	$14.7 million	2.52	2.3	8/16/2010	9.57%	42.58%
Details of Sterling Banks, Inc.: Expected to close in the third quarter of 2010 for a closing value of $14.7 million. The cash deal is @ $2.52 per share
+	SWWC	3/3/2010	Institutional Investors	$275 million	11	10.33	3/31/2011	6.49%	7.71%
Details of Southwest Water Co. : Expected to close by 3/31/2011 for a closing value of $275 million. It is a cash deal @ $11.00 per share
+	GLG	5/17/2010	Man Group	$1.6 billion	4.5	4.24	9/30/2010	6.13%	17.76%
Details of GLG Partners, Inc.: Expected to close by the third quarter of 2010 for a closing value of approximately $1.6bn. On the completion of the merger, GLG Partners shareholders will receive $4.50 per share in cash.
+	ME	4/15/2010	Apache	$2.7 billion	23.07	21.76	9/30/2010	6.02%	17.44%
Details of Mariner Energy, Inc.: Expected to close by the third quarter of 2010 for a value of $2.7bn. Under the cash and stock deal, Mariner stockholders will receive cash of $7.80 and 0.17043 of a share of Apache common stock in exchange for each share of Mariner common stock.
+	VTIV	5/6/2010	Thomas H. Lee Partners	$1.1 billion	26	24.71	9/30/2010	5.22%	15.12%
Details of inVentiv Health, Inc.: Expected to close by the third quarter of 2010 for a closing value of approx $1.1bn. Under the terms of the agreement, which has been approved by inVentiv’s board of directors, inVentiv shareholders will receive $26.00 in cash for each share of VTIV common stock they hold.
+	PSYS	5/17/2010	Universal Health	$3.1 billion	33.75	32.14	12/31/2010	5.01%	8.43%
Details of Psychiatric Solutions, Inc. Expected to close by the fourth quarter of 2010 for a closing value of $3.1bn. On the completion of the merger, Psychiatric Solutions shareholders will receive $33.75 per share in cash.
+	IDC	5/4/2010	Silver Lake & Warburg Pincus	$3.4 billion	33.86	32.34	9/30/2010	4.70%	13.62%
Details of Interactive Data Corporation: Expected to close by the third quarter of 2010 for a cosing value of $3.4bn. According to the deal, Interactive Data shareholders will receive $33.86 per share in cash.
+	RCNI	3/5/2010	Emera Inc.	$1.2 billion	15	14.36	9/30/2010	4.46%	12.91%
Details of RCN Corp.: Expected to close by the Second half 2010 for a closing value of $1.2bn. It is a cash deal @ $15.00 per share
+	SII	2/19/2010	Schlumberger	$7.5 billion	42.14	40.36	9/30/2010	4.41%	12.78%
Details of Smith International Inc.: Expected to close by the second half of 2010. It is a stock-for-stock merger @ 0.6966 shares of SLB / $42.96 per SII share
+	BNE	2/24/2010	RR Donnelley	$481 million	11.5	11.07	9/30/2010	3.88%	11.25%
Details of Bowne & Co. Inc.: Expected to close by the second half of 2010 for a closing value of $481mn. It is a cash deal @ $11.50 per share
+	DCP	4/12/2010	Cerberus Capital Management	$1.5 billion	17.55	16.96	11/15/2010	3.48%	7.43%
Details of DynCorp International Inc.: Expected to close in the third or fourth quarter of 2010 for a value of $1.5bn. DynCorp International’s stockholders will receive $17.55 in cash for each share of DynCorp International common stock they own.
+	MAM	3/12/2010		$75.7 million	45	43.49	12/31/2010	3.47%	5.84%
Details of Maine & Maritimes Corporation: Expected to close by the end of 2010 for a closing value of $75.7 million. The cash deal is @ $45 per share
+	EFJI	5/17/2010	Francisco Partners		1.05	1.02	9/30/2010	2.94%	8.52%
Details of EF Johnson Technologies, Inc.: Expected to close by the third quarter of 2010. On the completion of the merger, EF Johnson Technologies shareholders will receive $1.05 per share in cash.
+	DBTK	5/17/2010	Vision Solutions	$242 million	10.55	10.27	9/30/2010	2.73%	7.90%
Details of Double-Take Software, Inc.: Expected to close by the third quarter of 2010 for a closing value of $242mn. On the completion of the merger, Double-Take Software shareholders will receive $10.55 per share in cash.
+	PRPX	2/17/2010	L.B. Foster Co.	$112 million	11.71	11.4	6/30/2010	2.72%	27.57%
Details of Portec Rail Products Inc.: Expected to close by the end of June 2010 for a closing value of $112mn. The cash deal is @ $11.71 per share
+	CKR	3/1/2010	Apollo Management VII	$694 million	12.55	12.22	6/30/2010	2.70%	27.38%
Details of CKE Restaurants Inc.: Expected to close by June 30 for a closing value of $694 mn.CKE scrapped the THL deal and accepted Apollo’s takeover bid @ $12.55 per share.
+	ORCD	3/16/2010	eMusic	$12.77 million	2.05	2	8/16/2010	2.50%	11.13%
Details of The Orchard Enterprises Inc.: Expected to close by the third quarter of 2010 for $12.7 million @ $2.05 per share.
+	ARD	4/4/2010	SandRidge Energy Inc.	$1.6 billion	30.97	30.29	9/30/2010	2.24%	6.50%
Details of Arena Resources Inc.: Expected to close during the second or third quarter of 2010 for a value of $1.6bn. The stock-cash merger is @ 4.7771 shares of SandRidge common stock and $2.50 in cash for each share of Arena common stock.
+	CPII	5/10/2010	Comtech	$472.3 million	15.59	15.26	9/30/2010	2.16%	6.26%
Details of CPI International, Inc.: Expected to close in the third quarter of 2010 for a closing alue of $472.3mn. If the merger is completed, CPI International shareholders will receive a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing, provided that the fraction shall not be greater than 0.2382 nor less than 0.2132.
+	BSMD	5/13/2010	Merit Medical Systems	$96 million	4.38	4.29	9/30/2010	2.10%	6.08%
Details of BioSphere Medical Inc.: Expected to close in the third quarter of 2010 for a closing value of $96mn.If the merger is completed, BioSphere Medical shareholders will receive $4.38 per share in cash.
+	ATSI	4/29/2010	Medtronic	$350 million	4	3.92	9/30/2010	2.04%	5.91%
Details of ATS Medical Inc.: Expected to close by September 30 for a value of $350mn. Medtronic is offering ATS Medical $4 per share
+	SXE	5/7/2010	CGI Group	$904 million	37.5	36.75	9/30/2010	2.04%	5.91%
Details of Stanley, Inc.: Expected to close during the fall of 2010 for a closing value of $904mn. CGI will pay shareholders $37.50 for each share of Stanley.
+	BELM	3/29/2010	Avnet	$252 million	7	6.87	6/30/2010	1.89%	19.19%
Details of Bell Microproducts Inc.: Expected to close in two to four months for a closing value of $252mn and also assuming $342 million in debt for the company as part of the transaction, bringing the total value of the deal up to $594 million.Avnet is paying $7 a share for San Jose-based Bell Microproducts Inc.
+	VRAD	5/17/2010	Providence Equity	$294 million	17.25	16.95	9/30/2010	1.77%	5.13%
Details of Virtual Radiologic Corporation: Expected to close by the third quarter of 2010 for a closing value of $294mn. On the completion of the merger, Virtual Radiologic shareholders will receive $17.25 per share in cash.
+	RBI	3/15/2010	affiliate of Oncap Management Partners L.P.		13.55	13.32	8/16/10	1.73%	7.69%
Details of Sport Supply Group, Inc: Expected to close in the second or third quarter of 2010. ONCAP has the unilateral option to terminate the merger agreement by paying to Sport Supply Group a termination fee of either $6,000,000 or $10,000,000, depending on whether financing is available to ONCAP. It is a cash deal @ $13.55
+	WEL	4/9/2010	Halliburton Company	$240 million	3	2.95	9/30/2010	1.69%	4.91%
Details of Boots & Coots, Inc.: Expected to close in the summer of 2010 for a value of $240mn. The $3 cash & stock deal consists of $1.73 in cash and $1.27 in Halliburton stock.
+	CRN	4/19/2010	GeoGroup	$685 million	26.61	26.17	9/30/2010	1.68%	4.87%
Details of Cornell Companies Inc.: Expected to close in the third quarter of 2010 at an estimated enterprise value of $685 million based on the closing prices of both companies’ stocks on April 16, 2010, including the assumption of approximately $300 million in Cornell debt, excluding cash. Under the terms of the definitive agreement, stockholders of Cornell will have the option to elect to receive either (x) 1.3 shares of GEO common stock for each share of Cornell common stock or (y) an amount of cash consideration equal to the greater of (i) the fair market value of one share of GEO common stock plus $6.00 or (ii) the fair market value of 1.3 shares of GEO common stock.
+	SY	5/12/2010	SAP	$5.8 billion	65	64.04	9/30/2010	1.50%	4.34%
Details of Sybase, Inc.: Expected to close in the third quarter of 2010 for a closing value of $5.8bn. If the merger is completed, Sybase shareholders will receive $65.00 per share in cash.
+	CYBS	4/21/2010	Visa Inc.	$2.0 billion	26	25.62	9/30/2010	1.48%	4.30%
Details of CyberSource Corporation: Expected to close in Visa’s Fourth Fiscal Quarter ending in September for a closing value of $2bn. The closing price for the cash deal is at a price of $26.00 per share.
+	SENO	5/5/2010	Bard	$200 million	11	10.85	9/30/2010	1.38%	4.00%
Details of SenoRx, Inc.: Expected to close by the third quarter of 2010 for a closing value of $200mn. The deal is @ $11.00 per share in cash.
+	PFWD	4/16/2010	Oracle Corp.	$685 million	17	16.78	6/30/2010	1.31%	13.29%
Details of Phase Forward Inc. : Expected to close in the middle of the year 2010 for a value of $685mn. Oracle is paying $17 per share in cash.
+	HTRN	5/5/2010	Endo Pharmaceuticals	$223 million	4.85	4.79	7/31/2010	1.25%	6.82%
Details of HealthTronics Inc.: Expected to close by July 31, 2010 for a closing value of $223mn. The deal is @ $4.85 cash per HealthTronics share
+	BWY	3/29/2010	Madison Dearborn Partners, LLC ("MDP")	$915 million	20	19.8	8/16/2010	1.01%	4.50%
Details of BWAY Holding Company: Expected to close in the second or third quarter of 2010 for a value of $915 million.Under the agreement, BWAY shareholders will receive $20.00 cash for each share of BWAY common stock they own.
+	TWPG	4/26/2010	Stifel Financial	$300 million	7.19	7.12	6/30/2010	0.98%	9.97%
Details of Thomas Weisel Partners Group, Inc.: Expected to close on June 30 for a closing values of $300mn. Stifel plans to acquire all of the outstanding shares of Thomas Weisel Partners common stock in a stock-for-stock merger using a fixed exchange ratio of 0.1364 shares of Stifel common stock for each share of Thomas Weisel Partners common stock.
+	DCAI	4/14/2010	U.S. Renal Care	$112 million	11.25	11.15	5/31/2010	0.90%	46.76%
Details of Dialysis Corp. of America: Expected to close in May 2010 for a value of $112mn. The cash deal is @ $11.25 per share.
+	TUTR	3/26/2010	Thoma Brava	$141 million	5.6	5.56	7/31/2010	0.72%	3.92%
Details of Plato Learning, Inc.: Expected to close by July 31, 2010 for a closing value of $141 million. Thoma Bravo LLC will pay $5.60 in cash for each Plato share.
+	NGA	4/1/2010	AZZ Inc.	$125.6 million	7.5	7.45	8/31/2010	0.67%	2.53%
Details of North American Galvanizing & Coatings Inc.: Expected to close by the end of AZZ’s fiscal second quarter, Aug. 31for a value of $125.6 million. AZZ plans a cash tender offer for NAGC of $7.50 per share
+	MIL	3/1/2010	Merck	$6 billion	107	106.3	9/30/2010	0.66%	1.91%
Details of Millipore Corp.: Expected to close by the second half of 2010 for a closing value of $6bn. It is a cash deal @ $107 per share
+	SKIL	2/12/2010	consortium of private equity funds	$1.2 billion	11.25	11.18	5/31/2010	0.63%	32.65%
Details of SkillSoft plc: The merger agreement has a “go-shop” period, ending on March 6, 2010. It has a closing value of approximately $1.2bn. The closing price for the cash deal has been revised from $10.80 per share to $11.25 per share as on March 31, 2010.
+	IUSA	3/8/2010	CCMP	$460 million	8	7.96	6/30/2010	0.50%	5.09%
Details of infoGROUP, Inc.: Expected to close by this Summer for a value of $460 million @ $8.00 per share
+	PONE	4/26/2010	GTCR	$828 million	15.5	15.43	6/30/2010	0.45%	4.60%
Details of Protection One Inc.: Expected to close in the second quarter of 2010 for a closing value of $828mn. It is a cash deal @$15.50 per share
+	NADX	4/5/2010	GDC Holdings Inc.	$100 million	17	16.93	6/30/2010	0.41%	4.19%
Details of National Dentex Corp.: Expected to close at the end of the quarter ending June 30 for a value of $100mn. The deal is @ $17.00 per share in cash.
+	RISK	3/1/2010	MSCI	$1.55 billion	21.79	21.71	7/16/2010	0.37%	2.59%
Details of RiskMetrics Group, Inc.: Expected to close by the third fiscal quarter of 2010 for a closing value of $1.55bn. It is cash plus stocks deal @$16.35/share + 0.1802 MSCI shares
+	PALM	4/28/2010	Hewlett – Packard	$1.2 billion	5.7	5.68	7/31/2010	0.35%	1.92%
Details of Palm, Inc.: Expected to close by July 31, 2010 for a closing value of $1.2bn. It is a cash deal @ $5.7 per share.
+	MIR	4/12/2010	RRI Energy In.	$1.6 billion	11.71	11.67	12/31/2010	0.34%	0.58%
Details of Mirant Corporation: Expected to close by the end of the year 2010 for a value of $1.6bn. Mirant Corp. will combine with RRI Energy Inc. in a stock-deal to form GenOn Energy. Mirant stockholders will get about 2.84 RRI common shares for each Mirant share they own.
+	CXG	3/22/2010	Consol Energy Inc.	$363 million	38.25	38.16	6/30/2010	0.24%	2.39%
Details of CNX Gas Corporation: Expected to launch tender offer by May 05, 2010 for a closing value of $363 million for 9.5 million shares of CNX Gas Corp. from stockholders represented by T. Rowe Price Associates Inc. at a price of $38.25 per share
+	OSIP	5/17/2010	Astellas Pharma	$3.5 billion	57.5	57.38	6/30/2010	0.21%	2.12%
Details of OSI Pharmaceuticals Inc.: Expected to close by the second quarter of 2010 for a closing value of $3.5bn. On the completion of the merger, OSI Pharmaceuticals shareholders will receive $57.50 per share in cash.
+	TSFG	5/17/2010	TD Bank Financial Group	$61 million	0.28	0.2798	9/30/2010	0.07%	0.21%
Details of South Financial Group Inc.: Expected to close by the third quarter of 2010 for a closing value of $61mn. On the completion of the merger, The South Financial Group shareholders will receive either $0.28 in cash or 0.004 shares of TD Bank Financial Group common stock per The South Financial Group common share held..
+	CAL	5/3/2010	United	$1.2 billion	19.46	19.45	12/31/2010	0.05%	0.09%
Details of Continental Airlines, Inc.: Expected to close by the end of 2010 for a closing value of approximately $1.2bn. In the merger, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own.
+	SMMX	4/5/2010	Accelrys Inc.	$186 million	5.44	5.96	6/30/2010	-8.72%	-88.46%
Details of Symyx Technologies Inc.: Expected to be completed by the end of June 2010 for a value for $186mn. It is an all-stock merger where Symyx shareholders will receive 0.7802 shares of Accelrys common stock for each share of Symyx.
+	DTG	4/26/2010	Hertz	$1.2 billion	41	45.61	12/31/2010	-10.11%	-17.00%
Details of Dollar Thrifty Automotive Group Inc.: Expected to close by the end of the year for a value of $1.2bn. The transaction values Dollar Thrifty stock at approximately $41.00 per share.
+	ATBC	5/10/2010	Jacksonville Bancorp		2.4	2.6999	9/30/2010	-11.11%	-32.18%
Details of Atlantic Bancgroup Inc.: Expected to close in the third quarter of 2010. If the merger is completed, Atlantic BancGroup shareholders will receive 0.2 shares of Jacksonville Bancorp common stock for each share of Atlantic BancGroup common stock held, plus up to approximately $0.65 per share in cash, subject to the qualifying sale of certain Atlantic BancGroup assets.
+	CCE	2/25/2010	The Coca-Cola Company	$12.3 billion		26.57	10/1/2010	#VALUE!	#VALUE!
Details of Coca-Cola Enterprises Inc.: Expected to close by October 1, 2010 for a closing value of $1.23bn. The deal includes $10 per share + a share in a new bottling company

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