Merger Arbitrage Mondays – April 25, 2011

18.58%

13.54%

7.06%

5.07%

Completion of this transaction is expected to take between six to nine months. On the completion of merger TAM shareholders will receive 0.90 shares in LAN for each TAM share they hold. Shares of LAN Airlines SA of Chile and Brazilian carrier TAM SA fell sharply Monday, January 31, 2011, as investors reacted to the Chilean antitrust court's move late Friday to suspend their proposed merger.

Update March 18, 2011: Chile's LAN Airlines (LFL) said a regulatory investigation into complaints about the merger could take between 6 to 9 months and the merger will most likely not complete before the fourth quarter. We have updated the closing date to 12/31/2011.

Expected to close before the end of the third quarter for a closing value of $583.2 million. Upon completion of the merger, China Security & Surveillance Technology shareholders will receive $6.50 per share in cash.

Expected to close by the end of the year for a closing value of $3.4 billion. On the completion of the merger Grifols will pay $19 in cash and 0.641 newly issued, nonvoting shares for each share of Talecris.

Update Nov 04, 2010: The ratio was increased to 0.6485 on November 4, 2010.

Update Nov 15, 2010: U.S. antitrust regulators might seek to block Grifols's purchase of Talecris. The expected completion date has been updated to 3/31/2011.

Update March 04, 2011:Grifols and Talecris Announce the Outside Date of Their Merger Agreement has been Extended to June 30, 2011

Expected to close in the latter part of the second quarter of 2011. Upon completion of the merger, Cascade Financial shareholders will receive approximately $0.45 per share in cash. 

Opus Bank will pay approximately $16.25 million to retire Cascade Financial's $39 million in preferred stock and associated warrants issued to the United States Department of the Treasury under the Treasury's Capital Purchase Program, and $5.5 million in cash to the holders of Cascade Financial's common stock.

Expected to close before the end of the year for a closing value of $3 billion. Upon completion of the merger, Global Crossing shareholders will receive 16 shares of Level 3 common stock for each share of Global Crossing common stock or preferred stock that is owned at closing.

Expected to close in the first quarter of 2011 for a closing value of $1.4 billion. On the completion of the merger, AirTran Holdings Shareholders will receive $3.75 per share in cash and 0.321 share of Southwest stock for each share of AirTran held. Update Nov 2, 2010: The ratio of Southwest shares issued changes based on the price of Southwest's stock and the deal value also varies from $7.25 to $7.75. Specifically as stated in the press release,

“The number of shares to be issued by Southwest Airlines is subject to adjustment if the average of Southwest Airlines closing prices for the 20 trading days ending three trading days prior to closing is below $10.90 or above $12.46. This adjustment mechanism is intended to provide at least $7.25 in value and up to $7.75 in value per share of AirTran common stock. If the average closing price noted above exceeds $12.46, the value will be $7.75 with fewer shares of Southwest common stock issued. If the average closing price noted above is less than $10.90, the value will be $7.25 with additional shares of Southwest common stock issued. Additionally, Southwest Airlines has the option of substituting cash in lieu of issuing incremental shares if the average closing stock price is less than $10.90.”

Update(s)

March 23, 2011: AirTran Stockholders Approve Southwest Merger which is currently expected to close in the second quarter of 2011

4.31%

Expected to close for a closing value of $1.1 billion. Upon completion of the merger, Verigy shareholders will receive $15.00 per share in cash.

Expected to close in six to nine months for $6.5 billion. On the completion of the merger, National Semiconductor shareholders will receive $25.00 per share in cash.

Expected to close by late second quarter or early third quarter of 2011 for a closing value of $157 million in an all-stock deal.

Pursuant to the terms of the merger agreement, at the effective time of the merger, TGC shareholders will receive 0.188 shares of Dawson stock for every one share of TGC stock, provided that the average of the volume weighted average price of Dawson common stock on the NASDAQ during the ten consecutive trading days ending on the second business day prior to the date of the shareholders' meetings of Dawson and TGC to be called for the purpose of approving the transaction is equal to or greater than $32.54 but less than or equal to $52.54. In the event that the average of the volume weighted average price of Dawson's common stock is outside of that range, then the parties, at their respective option, shall be entitled to terminate the transaction following good faith negotiations to determine a modified, mutually acceptable exchange ratio.

Expected to close in the first quarter of 2011 for a closing value of $1.1 billion. On the completion of the merger, ID shareholders will receive $12 per share in cash.

Expected to close by April 14, 2010 for a closing value of $94 million. On the completion of the merger, Silverleaf Resorts shareholders will receive $2.50 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $26.2 million. Upon completion of the merger, GS Financial Corp shareholders will receive $21.00 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $2.9 billion. Upon completion of the merger, American Medical Systems shareholders will receive $30.00 per share in cash.

Expected to close later this year for a closing value of $2 billion. On the completion of the merger, Hughes Communications shareholders will receive $60.70 per share in cash.

Expected to close in the second quarter or the beginning of the third quarter of calendar 2011 for a closing value of $277 million in a cash plus stock deal. Upon completion of the merger, TomoTherapy shareholders will receive $3.15 in cash and 0.1648 shares of Accuray common stock per share of TomoTherapy common stock. 

Expected to close by June 30, 2011 for a closing value of $251 million. Upon completion of the merger, Animal Health International shareholders will receive $4.25 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $1 billion in an all-stock deal. Upon completion of the merger, optionsXpress stockholders will receive 1.02 shares of Schwab stock for each share of optionsXpress stock.

Expected to close in the third quarter of 2011 for a closing value of $270 million. Upon completion of the merger, Spectrum Control shareholders will receive $20.00 per share in cash.

Expected to close during the first quarter of the SRA 2012 fiscal year, which begins on July 1, 2011. Upon completion of the merger, SRA International shareholders will receive $31.25 per share in cash.

Expected to close in second quarter of 2011. On the completion of merger RAE Systems shareholders will receive $1.75 per share in cash. RAE also announced that, concurrent with entering into the Vector Agreement, RAE terminated its previously announced merger agreement with affiliates of Battery Ventures under the terms of the Prior Agreement, and paid a termination fee of $3.39 million to affiliates of Battery Ventures.

Update April 3, 2011: RAE Systems announced a revised higher offer of $1.88 per share by Vector Capital, a 7.4% increase from the previous offer of $1.75 per share. The revised offer was precipitated as a result of a competing offer of $1.90 per share by Battery Ventures, which was not determined to be a “superior offer”  by the board.

Expected to close in the second quarter of 2011 for a closing value of $250 million. Upon completion of the merger, America Service Group shareholders will receive $26.00 per share in cash.

Expected to close in late June 2011 for a closing value of $340 million. Upon completion of the merger, LaBarge shareholders will receive $19.25 per share in cash.

Expected to close by the end of June 2011. Upon completion of the merger, Rural/Metro shareholders will receive $17.25 per share in cash.

Expected to close by mid-year 2011 for a closing value of $1.027 billion. According to the terms of the deal, each outstanding share of Sterling common stock will be exchanged for 0.2365 shares of Comerica common stock upon closing.

Expected to close in the third quarter of 2011 for a closing value of $4.17 billion. On the completion of the merger, NSTAR shareholders will receive 1.312 Northeast Utilities common shares for each NSTAR held.

Expected to close in the second half of this year for a closing value of $4.1 billion. Upon completion of the merger, Graham Packaging shareholders will receive $19.56 per share in a cash plus stock deal. Graham shareholders will receive $4.75 in cash and 0.402 shares of Silgan common stock.

Expected to close by the end of July for a closing value of $411 million. Upon completion of the merger, TradeStation shareholders will receive $9.75 per share in cash.

Expected to close in May 2011 for a closing value of $430 million. Upon completion of the merger, Inspire Pharmaceutical shareholders will receive $5.00 per share in cash.

Expected to close by the end of the second quarter of 2011. Upon completion of the merger, CNA Surety Corp shareholders will receive $26.55 per share in cash.

Expected to close in the fourth quarter of 2010 for a closing value of $3.7 billion. On the completion of the merger, Albert Culver shareholders will receive $37.50 per share in cash.

0.56%

Expected to close by the end of June, 2011 for a closing value of $409 million. Upon completion of the merger, Drugstore.com shareholders will receive $3.80 per share in cash.

Expected to close by the end of May 2011 for a total value of $51.5 million. Coleman Cable will initiate a tender offer on April 11 to acquire outstanding shares of Technology Research Corp for $7.20 in cash. The transaction will be funded with cash on hand and existing borrowing facilities.

Expected to close in the second quarter of 2011 for a closing value of $137 million. Upon completion of the merger, Tollgrade Communications shareholders will receive $10.10 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $9.7 billion. Upon completion of the merger, Lubrizol Corporation shareholders will receive $135 per share in cash.

0.36%

Expected to close in the second quarter of 2011 for a closing value of $85.4 million. Upon completion of the merger, Orchid Cellmark shareholders will receive $2.80 per share in cash.

Expected to close in the first quarter of 2011 for a closing value of $2.2 billion. On the completion of the merger, Novell shareholders will receive $6.10 per share in cash.
Update: Feb 17, 2011 – Novell and CPTN received a request for additional information from the Antitrust Division of the United States Department of Justice regarding the patent sale. The requests have the effect of extending the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 until 30 days after both parties have substantially complied with the requests, unless the waiting period is earlier terminated. Novell is in the process of gathering information to respond to this request and is continuing to cooperate fully with the Department of Justice in connection with its review. Novell continues to work toward completing the merger as quickly as possible and currently anticipates that the closing of the merger will occur following the completion of the waiting period and the satisfaction of other closing conditions.

Expected to close in early 2011 for a closing value of $778 million. On the completion of the merger, Ladish Co shareholders will receive $24 in cash and 0.4556 share of Allegheny stock for each share held.

Expected to close in the second quarter of the year for a closing value of $165 million. Upon completion of the merger Tasty Baking Company shareholders will receive $4 per share in cash.

Expected to close in second quarter of 2011 for $214 million. On the completion of merger NovaMed Inc. shareholders will receive 13.25 per share in cash.

Expected to close in the second quarter of 2011 for a closing value of $3 billion. On the completion of the merger, Emergency Medical Services shareholders will receive $64.00 per share in cash.

Expected to close in the first quarter of 2011 for a closing value of $2.1 billion. On the completion of the merger, Dionex shareholders will receive $118.50 per share in cash.

Update(s)

February 15, 2011: Thermo Fisher Scientific Extends Cash Tender Offer for Dionex Corporation. This process is likely to take the closing to early in the second quarter of 2011.

Expected to close in the second quarter of 2011 for a closing value of $640 million. Upon completion of the merger, RC2 shareholders will receive $27.90 per share in cash.

Expected to close by the end of April 2011 for a closing value of $344 million. Upon completion of the merger, Celera shareholders will receive $8.00 per share in cash.

Expected to close in the second quarter of 2011 for a closing value of $976 million. Upon completion of the merger, Epicor shareholders will receive $12.50 per share in cash.

-0.10%

Expected to close in the second quarter of 2011 for a closing value of $315 million. Upon completion of the merger, Bronco Drilling shareholders will receive $11.00 per share in cash.

Expected to close in six to nine months for a closing value of $4.7 billion. Upon completion of the merger, DPL Inc. shareholders will receive $30.00 per share in cash.

Expected to close by the end of the year for a closing value of $234 million. Upon completion of the merger, Bancorp Rhode Island shareholders will receive either $48.25 in cash, or 4.686 shares of Brookline Bancorp common stock or a combination thereof, with total cash consideration of approximately $121 million and total stock consideration of approximately 11.0 million shares of Brookline Bancorp common stock. 

Elections will be subject to allocation procedures that are intended to ensure that approximately 50% of the outstanding shares of Bancorp Rhode Island common stock will be converted into Brookline Bancorp common stock.

To stay on the conservative side we are treating this transaction as an all stock deal in our Merger Arbitrage tool.

Expected to close in the third quarter of 2011 for a closing value of $2.4 billion. Upon completion of the merger, GSI Commerce shareholders will receive $29.25 per share in cash.

Details about the original Hertz offer with updates below: Expected to close by the end of the year for a value of $1.3 billion. The transaction values Dollar Thrifty stock at approximately $41.00 per share. the $41.00 per share purchase price is comprised of 80% cash consideration and 20% stock consideration. The cash portion will be paid in two components; (1) a $200 million special cash dividend representing approximately $6.88 per share, to be paid by Dollar Thrifty immediately prior to the transaction closing and (2) $25.92 per share to be paid by Hertz at the closing. The stock is at a fixed exchange ratio of 0.6366 per share, based upon a Hertz common stock closing price of $12.88 per share on April 23, 2010.

Revision on 09/13/2010: Hertz raised its offer for Dollar Thrifty Automotive Group Inc. to $50 a share, or about $1.56 billion, topping a proposal from Avis Budget Group Inc.

Update 10/1/2010: Dollar Thrifty shareholders rejected the Hertz deal yesterday. DTG has indicated its willingness to work with Avis's offer of nearly $53 per share ($45.79 in cash plus 0.6543 shares of Avis) but has asked the company to hold off on making a formal offer.

Expected to close in the second or third calendar quarter of 2011 for a closing value of $335.3 million. Upon completion of the merger, K-Sea's common unitholders will have the right to elect to receive either (a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of Kirby's common stock for each common unit. K-Sea's preferred unitholders will receive $4.075 in cash and 0.0734 of a share of Kirby's common stock for each preferred unit. K-Sea's general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for K-Sea's incentive distribution rights.

Expected to close by the end of the year in an all stock deal. On the completion of the merger NYSE Euronext shareholders will receive 0.4700 of a share of Deutsche Boerse common stock per share held.

Update April 1, 2011: The Nasdaq (NDAQ) and ICE have made a joint offer for NYSE Euronext (NYX) that is worth $43 as of April 1, 2011.

Expected to close in the second quarter of 2011 for a closing value of $679 million. Upon completion of the merger, Zoran shareholders will receive ADRs equivalent to 1.85 shares of CSR common stock per Zoran share held.

Update(s): 

March 01, 2011:  Zoran Corporation (ZRAN) issued an open letter to its stockholders.