Merger Arbitrage Mondays – September 06, 2010

Merger activity increased last week with five new deals announced and three deals closing.

Deal Statistics:

Total Number of Deals Closed in 2010 64
Total Number of Deals That Did Not Complete in 2010 4
Total Number of Pending Deals
Cash Deals 45
Stock Deals 9
Stock & Cash Deals 13
Total Number of Pending Deals 67

New Deals:

  1. The acquisition of A.D.A.M Inc. (ADAM) by Ebix (EBIX) for $66 million in an all stock deal where shareholders of ADAM will receive 0.3122 of Ebix stock for each share held in ADAM
  2. The acquisition of Cogent Inc. (COGT) by 3M (MMM) for $943 million at $10.50 per share in cash
  3. The acquisition of American Physicians Service Group (AMPH) by ProAssurance (PRA) for $233 million at $32.50 per share in cash
  4. The acquisition of Salary.com (SLRY) by Kenexa Corp. (KNXA) for $80 million at $4.07 per share in cash
  5. The acquisition of Burger King Holdings (BKC) by 3G Capital for $3.26 billion at $24 per share in cash

Closed Deals:

  1. The acquisition of Gerdau Ameristeel Corporation (GNA) by Gerdau S.A. on August 30, 2010
  2. The acquisition of William Pipeline Partners (WMZ) by William Partners on September 01, 2010
  3. The acquisition of Virage Logic Corporation (VIRL) by Synopsis Inc. on September 02, 2010

Modified or Failed Deals:

  1. L.B. Foster and Portec Rail Products (PRPX) announced on Monday that they have extended the merger deadline from August 31, 2010 to December 30, 2010
  2. Rocco B. Commisso, the founder, Chairman and Chief Executive Officer of Mediacom Communications Corporation (MCCC), announced on August 31, 2010 that he has withdrawn his May 31, 2010 non-binding offer to purchase all of the shares of Mediacom not currently owned by him.
  3. Emmis Communications Corp. (EMMS) Chairman and Chief Executive Jeffrey H. Smulyan said it is “unlikely” it will be able to reach deals with a financier and a group of preferred-stock holders that would allow the radio station operator’s proposed buyout to be completed.
  4. Second Ammendment for L.B. Foster and Portec Rail Products (PRPX):  L.B. Foster has agreed to both increase the tender offer share price from $11.71 per share to $11.80 per share and, subject to certain conditions, pay Portec $2 million should the transaction not close by December 30, 2010.
  5. The chief executive of Genzyme (GENZ), Henri A. Termeer, on Tuesday softened his tone about a possible sale, a day after his company rejected a $69 per share offer from Sanofi-Aventis.

Top 10 Deals with largest spreads:

Symbol Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annu.
Profit
SSE Naugatuck Valley Financial Corp (NVSL) $7.25 $5.71 09/30/2010 26.97% 410.17%
TLCR Grifols (GRF.MC) $27.12 $22.47 12/31/2010 20.71% 65.15%
ATBC Jacksonville Bancorp (JAXB) $2.26 $1.97 09/30/2010 14.72% 223.88%
ADAM Ebix Inc. (EBIX) $5.88 $5.53 12/31/2010 6.42% 20.20%
AYE FirstEnergy (FE) $25.20 $23.72 03/31/2011 6.24% 11.05%
BNE RR Donnelley (RRD) $11.50 $10.86 09/30/2010 5.89% 89.63%
PINN Investor Group lead by Scotia Waterous (USA) (N/A) $0.34 $0.3235 08/21/2010 5.10% 0.00%
ALY SeaDrill (N/A) $4.25 $4.05 12/31/2010 4.94% 15.54%
BGH Buckeye Partners LP (BPL) $43.89 $41.92 12/31/2010 4.69% 14.76%
VETS VCA Antech Inc (WOOF) $0.34 $0.3272 09/30/2010 3.91% 59.49%

List of all Pending Deals:

  Symbol Announced
Date
Acquiring
Company
Closing
Value
Closing
Price
Last
Price
Closing
Date
Profit Annu.

Profit

+ SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $19.5 million $7.25 $5.71 09/30/2010 26.97% 410.17%
+ TLCR 06/07/2010 Grifols (GRF.MC) $3.4 billion $27.12 $22.47 12/31/2010 20.71% 65.16%
+ ATBC 05/10/2010 Jacksonville Bancorp (JAXB) N/A $2.26 $1.97 09/30/2010 14.72% 223.88%
+ ADAM 08/30/2010 Ebix Inc. (EBIX) $66 million $5.88 $5.53 12/31/2010 6.42% 20.20%
+ AYE 02/11/2010 FirstEnergy (FE) $8.5 billion $25.20 $23.72 03/31/2011 6.24% 11.05%
+ BNE 02/24/2010 RR Donnelley (RRD) $481 million $11.50 $10.86 09/30/2010 5.89% 89.63%
+ PINN 02/24/2010 Investor Group lead by Scotia Waterous (USA) (N/A) $11 million $0.34 $0.3235 08/21/2010 5.10% 0.00%
+ ALY 08/12/2010 SeaDrill (N/A) $890 million $4.25 $4.05 12/31/2010 4.94% 15.54%
+ BGH 06/11/2010 Buckeye Partners LP (BPL) $1.14 billion $43.89 $41.92 12/31/2010 4.69% 14.76%
+ VETS 06/02/2010 VCA Antech Inc (WOOF) $41.25 million $0.34 $0.3272 09/30/2010 3.91% 59.49%
+ NRGP 08/09/2010 Inergy (NRGY) $2.07 billion $29.19 $28.20 12/31/2010 3.51% 11.05%
+ Q 04/22/2010 Century Link (CTL) $10.6 billion $6.03 $5.83 04/21/2011 3.35% 5.39%
+ PTV 08/17/2010 Reynolds Group Holdings (N/A) $6 billion $33.25 $32.22 12/31/2010 3.20% 10.06%
+ CCBP 08/09/2010 F.N.B. Corporation (FNB) $70 million $38.50 $37.35 12/31/2010 3.08% 9.69%
+ ATAC 07/19/2010 Genco Distribution System Inc. (N/A) $513 million $25.00 $24.34 12/31/2010 2.71% 8.53%
+ DIVX 06/02/2010 Sonic Solutions (SNIC) $323 million $8.26 $8.07 09/30/2010 2.39% 36.36%
+ PRPX 02/17/2010 L.B. Foster Co. (FSTR) $112 million $11.80 $11.56 12/30/2010 2.08% 6.59%
+ ME 04/15/2010 Apache (APA) $2.7 billion $23.59 $23.16 09/30/2010 1.84% 27.92%
+ ALOY 06/24/2010 ZelnickMedia (N/A) $126.5 million $9.80 $9.6301 12/31/2010 1.76% 5.55%
+ BKC 09/02/2010 3G Capital (N/A) $3.26 billion $24.00 $23.60 12/31/2010 1.69% 5.33%
+ NAL 08/19/2010 First Niagara Financial Group (FNFG) $1.5 billion $12.98 $12.77 05/15/2011 1.62% 2.36%
+ OSTE 08/17/2010 Medtronic (MDT) $123 million $6.50 $6.40 12/31/2010 1.56% 4.92%
+ XJT 08/04/2010 SkyWest (SKYW) $133 million $6.75 $6.65 12/31/2010 1.50% 4.73%
+ WAIN 06/29/2010 Eastern Bank (N/A) $163 million $19.00 $18.7201 12/31/2010 1.50% 4.70%
+ MFE 08/19/2010 Intel Corporation (INTC) $7.68 billion $48.00 $47.35 12/31/2010 1.37% 4.32%
+ OMNI 06/04/2010 Wellspring Capital Management (N/A) $122 million $2.75 $2.72 11/15/2010 1.10% 5.75%
+ MIR 04/12/2010 RRI Energy In. (RRI) $1.6 billion $10.60 $10.49 12/31/2010 1.08% 3.39%
+ WEL 04/09/2010 Halliburton Company (HAL) $240 million $3.00 $2.97 09/30/2010 1.01% 15.36%
+ PSYS 05/17/2010 Universal Health (N/A) $3.1 billion $33.75 $33.43 12/31/2010 0.96% 3.01%
+ SMTB 07/15/2010 People's United Financial Inc. (PBCT) $60 million $3.84 $3.81 12/31/2010 0.84% 2.63%
+ AEZ 07/28/2010 Hess Corp (HES) $450 million $7.59 $7.53 12/31/2010 0.81% 2.56%
+ NTY 07/15/2010 The Carlyle Group (N/A) $3.8 billion $55.00 $54.57 12/31/2010 0.79% 2.48%
+ PMACA 06/10/2010 Old Republic International (ORI) $228 million $7.18 $7.13 09/30/2010 0.74% 11.30%
+ HEW 07/12/2010 Aon Corp (AON) $4.9 billion $50.02 $49.66 11/15/2010 0.73% 3.79%
+ ACF 07/22/2010 General Motors Co. (N/A) $3.5 billion $24.50 $24.34 12/31/2010 0.66% 2.07%
+ BXC 07/22/2010 Cerberus Capital Management (N/A) $111.1 million $3.40 $3.38 12/31/2010 0.59% 1.86%
+ AMPH 09/01/2010 ProAssuarance (PRA) $233 million $32.50 $32.32 12/31/2010 0.56% 1.75%
+ ADCT 07/13/2010 Tyco Electronics (TEL) $1.24 billion $12.75 $12.68 12/31/2010 0.55% 1.74%
+ LSBX 07/15/2010 People's United Financial Inc. (PBCT) $96 million $21.00 $20.90 12/31/2010 0.48% 1.51%
+ GLG 05/17/2010 Man Group (N/A) $1.6 billion $4.50 $4.48 09/30/2010 0.45% 6.79%
+ TRBN 08/12/2010 Emergent BioSolution (EBS) $96.8 million $4.47 $4.45 12/31/2010 0.44% 1.40%
+ ACAP 07/08/2010 The Doctors Company (N/A) $386 million $41.50 $41.33 12/31/2010 0.41% 1.29%
+ PPCO 08/09/2010 Endo Pharmaceuticals (ENDP) $144 million $5.00 $4.98 12/31/2010 0.40% 1.26%
+ MAM 03/12/2010 Emera Inc (N/A) $75.7 million $45.00 $44.85 12/31/2010 0.33% 1.05%
+ NYM 07/15/2010 ProSight (N/A) $230 million $25.75 $25.67 12/31/2010 0.31% 0.98%
+ BSMD 05/13/2010 Merit Medical Systems (MMSI) $96 million $4.38 $4.37 09/30/2010 0.23% 3.48%
+ SWSI 08/09/2010 Nabors Industries (NBR) $900 million $22.12 $22.08 09/30/2010 0.18% 2.76%
+ UNCA 08/13/2010 IBM (IBM) $480 million $21.00 $20.97 12/31/2010 0.14% 0.45%
+ HGRD 07/28/2010 an affiliate of the private equity firm Vestar Capital (N/A) $294 million $8.20 $8.19 09/30/2010 0.12% 1.86%
+ SWWC 03/03/2010 Institutional Investors (N/A) $275 million $11.00 $10.99 09/13/2010 0.09% 4.74%
+ MEND 07/12/2010 Johnson & Johnson (JNJ) $480 million $23.40 $23.40 09/30/2010 0.00% 0.00%
+ DTPI 08/24/2010 PricewaterhouseCoopers (N/A) $378 million $12.50 $12.51 12/31/2010 -0.08% -0.25%
+ CAL 05/03/2010 United (UAUA) $1.2 billion $23.63 $23.68 12/31/2010 -0.23% -0.73%
+ SLRY 09/01/2010 Kenexa Corp. (KNXA) $80 million $4.07 $4.08 12/31/2010 -0.25% -0.77%
+ VRX 06/21/2010 Biovail Corporation (BVF) $3.3 billion $59.44 $59.98 12/31/2010 -0.90% -2.83%
+ ICXT 08/16/2010 FLIR Systems (FLIR) $274 million $7.55 $7.65 12/31/2010 -1.31% -4.11%
+ TSFG 05/17/2010 TD Bank Financial Group (N/A) $61 million $0.28 $0.2839 09/30/2010 -1.37% -20.89%
+ PZZ 08/16/2010 Leonard Green & Partners (N/A) $363 million $8.50 $8.63 12/31/2010 -1.51% -4.74%
+ ABII 06/30/2010 Celgene (CELG) $2.9 billion $71.94 $74.22 12/31/2010 -3.07% -9.65%
+ CPII 05/10/2010 Comtech (CMTL) $472.3 million $13.81 $14.45 09/30/2010 -4.40% -66.92%
+ COGT 08/30/2010 3M Co. (MMM) $943 million $10.50 $11.01 12/31/2010 -4.63% -14.58%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $4.14 12/31/2010 -7.00% -22.04%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $4.14 12/31/2010 -7.00% -22.04%
+ PAR 08/28/2010 Hewlett-Packard Company (HPQ) $2 billion $30.00 $32.89 12/31/2010 -8.79% -27.65%
+ DYN 08/13/2010 Blackstone Group (BX) $4.7 billion $4.50 $5.04 12/31/2010 -10.71% -33.71%
+ DTG 04/26/2010 Hertz (HTZ) $1.3 billion $38.99 $48.35 12/31/2010 -19.36% -60.93%
+ CCE 02/25/2010 The Coca-Cola Company (KO) $12.3 billion N/A $29.37 10/01/2010 N/A N/A

Voluntary Disclosure: I have tendered my shares of Portec Rail Products (PRPX) but plan to withdraw from the tender offer and sell my shares given the extension of the offer to December 30, 2010.

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