Merger Arbitrage Mondays – August 23, 2010

Total Number of Deals Closed in 2010 56
Total Number of Deals That Did Not Complete in 2010 2
Total Number of Pending Deals
Cash Deals 48
Stock Deals 11
Stock & Cash Deals 12
Deals with Special Conditions 00
Total Number of Pending Deals 71

Merger activity continued to remain high last week with eight new deals announced and three deals closing. However the value of deals driven by Intel’s $7.68 billion bid for McAfee (MFE) was much higher when compared to last week even without including BHP Billiton’s $40 billion hostile bid for Potash Corp of Saskatchewan (POT). As an Intel shareholders I am very disappointed with the company’s decision to purchase McAfee. While security at the silicon level makes sense, spending $7.68 billion from Intel’s $18.3 billion cash war chest towards this goal makes little sense. It would have been much more preferable for Intel to return value to shareholders through share buybacks or raising its dividend.

It was also interesting to see that one of the 11 banks on my watch list of regional banks, First Niagara Financial Group (FNFG), acquired another one from my list New Alliance Bancshares (NAL).

New Deals Announced Last Week:

  1. The acquisition of 3PAR (PAR) by Dell (DELL) for $18 per share in cash
  2. The acquisition of ICx Technologies (ICXT) by FLIR Systems (FLIR) for $7.55 per share in cash
  3. The acquisition of Osteotech (OSTE) by Medtronic (MDT) for $6.50 per share in cash
  4. The acquisition of Pactiv Corporation (PTV) by Reynolds Group Holdings for $33.25 per share in cash
  5. The acquisition of Prospect Medical Holdings (PZZ) by Leonard Green & Partners for $8.50 per share in cash
  6. The acquisition of Phoenix Technologies (PTEC) by Marlin Equity Partners for $3.85 per share in cash
  7. The acquisition of McAfee (MFE) by Intel (INTC) for $48 per share in cash
  8. The acquisition of New Alliance Bancshares (NAL) by First Niagara Financial Group (FNFG)  for $14.09 per share in cash and stock

The deals that closed include,

  1. The acquisition of Odyssey HealthCare (ODSY) by Gentiva Health Services (GTIV) on August 17, 2010
  2. The acquisition of Stanley (SXE) by CGI Group (GIB) on August 17, 2010
  3. The acquisition of Life Quotes (QUOT) by LQ acquisition on August 16, 2010

Top 10 Deals

  1. The acquisition of Atlantic BancGroup Inc (ATBC) by Jacksonville Bancorp (JAXB)
  2. The acquisition of Talecris (TLCR) by Grifols (GRF.MC)
  3. The acquisition of Southern Connecticut Bancorp (SSE) by Naugatuck Valley Financial Corp (NVSL)
  4. The acquisition of Emmis Communications Corporation (EMMS) by JS Acquisition and Alden Global Capital
  5. The acquisition of New Alliance Bancshares (NAL) by First Niagara Financial Group (FNFG)
  6. The acquisition of Allegheny Energy, Inc. (AYE) by FirstEnergy (FE)
  7. The acquisition of Qwest Communications International (Q) by Century Link (CTL)
  8. The acquisition of Allis-Chalmers Energy, Inc. (ALY) by SeaDrill
  9. The acquisition of PET DRx Corp (VETS) by VCA Antech Inc (WOOF)
  10. The acquisition of ATC Technology (ATAC) by Genco Distribution System Inc.

List of All Pending Deals with Details

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

Profit

+ ATBC 05/10/2010 Jacksonville Bancorp (JAXB) N/A $2.49 $2.00 09/30/2010 24.50% 235.33%
+ TLCR 06/07/2010 Grifols (GRF.MC) $3.4 billion $26.70 $22.23 12/31/2010 20.12% 56.48%
+ SSE 02/23/2010 Naugatuck Valley Financial Corp (NVSL) $19.5 million $7.25 $6.10 09/30/2010 18.85% 181.08%
+ EMMS 05/25/2010 JS Acquisition and Alden Global Capital (N/A) $3 billion $2.40 $2.09 09/30/2010 14.83% 142.47%
+ NAL 08/19/2010 First Niagara Financial Group (FNFG) $1.5 billion $14.09 $12.97 05/15/2011 8.64% 11.89%
+ AYE 02/11/2010 FirstEnergy (FE) $8.5 billion $23.91 $22.04 03/31/2011 8.46% 14.04%
+ Q 04/22/2010 Century Link (CTL) $10.6 billion $5.99 $5.65 04/21/2011 6.00% 9.08%
+ ALY 08/12/2010 SeaDrill (N/A) $890 million $4.25 $4.05 12/31/2010 4.94% 13.87%
+ VETS 06/02/2010 VCA Antech Inc (WOOF) $41.25 million $0.34 $0.3265 09/30/2010 4.13% 39.72%
+ ATAC 07/19/2010 Genco Distribution System Inc. (N/A) $513 million $25.00 $24.09 12/31/2010 3.78% 10.61%
+ BGH 06/11/2010 Buckeye Partners LP (BPL) $1.14 billion $44.32 $42.74 12/31/2010 3.69% 10.36%
+ CCBP 08/09/2010 F.N.B. Corporation (FNB) $70 million $36.84 $35.61 12/31/2010 3.46% 9.71%
+ BNE 02/24/2010 RR Donnelley (RRD) $481 million $11.50 $11.15 09/30/2010 3.14% 30.15%
+ PRPX 02/17/2010 L.B. Foster Co. (FSTR) $112 million $11.71 $11.36 08/31/2010 3.08% 140.57%
+ PINN 02/24/2010 Investor Group lead by Scotia Waterous (USA) (N/A) $11 million $0.34 $0.33 08/21/2010 3.03% 0.00%
+ BXC 07/22/2010 Cerberus Capital Management (N/A) $111.1 million $3.40 $3.30 12/31/2010 3.03% 8.51%
+ NRGP 08/09/2010 Inergy (NRGY) $2.07 billion $30.60 $29.75 12/31/2010 2.86% 8.02%
+ PTV 08/17/2010 Reynolds Group Holdings (N/A) $6 billion $33.25 $32.36 12/31/2010 2.75% 7.72%
+ TTIL 06/09/2010 Teoco Corp. (N/A) $58 million $3.00 $2.92 09/30/2010 2.74% 26.32%
+ ALOY 06/24/2010 ZelnickMedia (N/A) $126.5 million $9.80 $9.55 12/31/2010 2.62% 7.35%
+ DIVX 06/02/2010 Sonic Solutions (SNIC) $323 million $7.88 $7.70 09/30/2010 2.37% 22.77%
+ XJT 08/04/2010 SkyWest (SKYW) $133 million $6.75 $6.60 12/31/2010 2.27% 6.38%
+ TSFG 05/17/2010 TD Bank Financial Group (N/A) $61 million $0.28 $0.274 09/30/2010 2.19% 21.03%
+ MFE 08/19/2010 Intel Corporation (INTC) $7.68 billion $48.00 $47.03 12/31/2010 2.06% 5.79%
+ PMACA 06/10/2010 Old Republic International (ORI) $228 million $6.87 $6.74 09/30/2010 1.92% 18.46%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $3.78 12/31/2010 1.85% 5.20%
+ PTEC 08/17/2010 Marlin Equity Partners (N/A) $139 million $3.85 $3.78 12/31/2010 1.85% 5.20%
+ NTY 07/15/2010 The Carlyle Group (N/A) $3.8 billion $55.00 $54.00 12/31/2010 1.85% 5.20%
+ OSTE 08/17/2010 Medtronic (MDT) $123 million $6.50 $6.39 12/31/2069 1.72% 0.03%
+ WAIN 06/29/2010 Eastern Bank (N/A) $163 million $19.00 $18.68 12/31/2010 1.71% 4.81%
+ PSYS 05/17/2010 Universal Health (N/A) $3.1 billion $33.75 $33.21 12/31/2010 1.63% 4.57%
+ GLG 05/17/2010 Man Group (N/A) $1.6 billion $4.50 $4.43 09/30/2010 1.58% 15.18%
+ ACF 07/22/2010 General Motors Co. (N/A) $3.5 billion $24.50 $24.12 12/31/2010 1.58% 4.42%
+ OMNI 06/04/2010 Wellspring Capital Management (N/A) $122 million $2.75 $2.71 11/15/2010 1.48% 6.41%
+ LSBX 07/15/2010 People’s United Financial Inc. (PBCT) $96 million $21.00 $20.71 12/31/2010 1.40% 3.93%
+ WMZ 05/24/2010 Williams Partners L.P. (WPZ) $32.64 $32.22 09/30/2010 1.31% 12.57%
+ ADCT 07/13/2010 Tyco Electronics (TEL) $1.24 billion $12.75 $12.62 12/31/2010 1.03% 2.89%
+ HEW 07/12/2010 Aon Corp (AON) $4.9 billion $49.09 $48.64 11/15/2010 0.93% 4.04%
+ ME 04/15/2010 Apache (APA) $2.7 billion $23.23 $23.02 09/30/2010 0.91% 8.72%
+ NYM 07/15/2010 ProSight (N/A) $230 million $25.75 $25.52 12/31/2010 0.90% 2.53%
+ SMTB 07/15/2010 People’s United Financial Inc. (PBCT) $60 million $3.89 $3.8599 12/31/2010 0.87% 2.43%
+ UNCA 08/13/2010 IBM (IBM) $480 million $21.00 $20.83 12/31/2010 0.82% 2.29%
+ SWWC 03/03/2010 Institutional Investors (N/A) $275 million $11.00 $10.92 03/31/2011 0.73% 1.22%
+ MAM 03/12/2010 Emera Inc (N/A) $75.7 million $45.00 $44.68 12/31/2010 0.72% 2.01%
+ ACAP 07/08/2010 The Doctors Company (N/A) $386 million $41.50 $41.21 12/31/2010 0.70% 1.98%
+ BSMD 05/13/2010 Merit Medical Systems (MMSI) $96 million $4.38 $4.35 09/30/2010 0.69% 6.62%
+ WEL 04/09/2010 Halliburton Company (HAL) $240 million $3.00 $2.98 09/30/2010 0.67% 6.45%
+ RCNI 03/05/2010 ABRY Partners (N/A) $536 million $15.00 $14.90 09/30/2010 0.67% 6.45%
+ AEZ 07/28/2010 Hess Corp (HES) $450 million $7.04 $7.00 12/31/2010 0.50% 1.41%
+ VIRL 06/10/2010 Synopsys (SNPS) $315 million $12.00 $11.94 12/31/2010 0.50% 1.41%
+ HGRD 07/28/2010 an affiliate of the private equity firm Vestar Capital (N/A) $294 million $8.20 $8.16 09/30/2010 0.49% 4.71%
+ MEND 07/12/2010 Johnson & Johnson (JNJ) $480 million $23.40 $23.29 09/30/2010 0.47% 4.54%
+ GNA 06/02/2010 Gerdau (GGB) $1.7 billion $11.00 $10.95 08/31/2010 0.46% 20.83%
+ MIR 04/12/2010 RRI Energy In. (RRI) $1.6 billion $9.89 $9.87 12/31/2010 0.24% 0.69%
+ SII 02/19/2010 Schlumberger (SLB) $7.5 billion $39.33 $39.24 09/30/2010 0.23% 2.20%
+ SWSI 08/09/2010 Nabors Industries (NBR) $900 million $22.12 $22.07 09/30/2010 0.23% 2.18%
+ RUBO 05/10/2010 Mill Road Capital (N/A) $91 million $8.70 $8.69 08/23/2010 0.12% 0.00%
+ ECLP 06/09/2010 Allscripts-Misys Healthcare (MDRX) $1.3 billion $21.01 $21.02 11/15/2010 -0.04% -0.17%
+ PAR 08/16/2010 Dell (DELL) $1.15 billion $18.00 $18.04 12/31/2010 -0.22% -0.62%
+ PZZ 08/16/2010 Leonard Green & Partners (N/A) $363 million $8.50 $8.53 12/31/2010 -0.35% -0.99%
+ CAL 05/03/2010 United (UAUA) $1.2 billion $21.54 $21.74 12/31/2010 -0.94% -2.64%
+ VRX 06/21/2010 Biovail Corporation (BVF) $3.3 billion $56.80 $57.36 12/31/2010 -0.97% -2.72%
+ PPCO 08/09/2010 Endo Pharmaceuticals (ENDP) $144 million $5.00 $5.05 12/31/2010 -0.99% -2.78%
+ ICXT 08/16/2010 FLIR Systems (FLIR) $274 million $7.55 $7.65 12/31/2010 -1.31% -3.67%
+ CPII 05/10/2010 Comtech (CMTL) $472.3 million $13.73 $13.97 09/30/2010 -1.71% -16.46%
+ ABII 06/30/2010 Celgene (CELG) $2.9 billion $72.05 $74.43 12/31/2010 -3.20% -9.00%
+ TRBN 08/12/2010 Emergent BioSolution (EBS) $96.8 million $4.25 $4.47 12/31/2010 -5.00% -14.03%
+ DYN 08/13/2010 Blackstone Group (BX) $4.7 billion $4.50 $4.78 12/31/2010 -5.86% -16.45%
+ MCCC 06/01/2010 Chief Executive Rocco Commisso (N/A) $590 million $6.00 $6.76 N/A -11.24% 0.00%
+ DTG 04/26/2010 Hertz (HTZ) $1.3 billion $38.66 $48.15 12/31/2010 -19.72% -55.36%
+ CCE 02/25/2010 The Coca-Cola Company (KO) $12.3 billion N/A $29.02 10/01/2010 N/A N/A

Contributing Author: Ann Kumar

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