Merger Arbitrage Mondays – August 1, 2011

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

You can find all the active deals listed below in our Merger Arbitrage Tool that automatically updates itself during market hours.

Deal Statistics:

Total Number of Deals Closed in 2011 131
Total Number of Deals Not Completed in 2011 1
Total Number of Pending Deals
Cash Deals 36
Stock Deals 24
Stock & Cash Deals 11
Total Number of Pending Deals 71

New Deals:

  1. The acquisition of OceanFreight (OCNFD) by DryShips (DRYS) in a cash plus stock deal worth $19.85/share or $239 million where OceanFreight's shareholders will receive $11.25 in cash and 0.52326  of a share of common stock of Ocean Rig UDW Inc., a global provider of offshore ultra deepwater drilling services that is 78% owned by DryShips. Ocean Rig shares will be listed on the Nasdaq Global Select Market upon the closing of the merger.
  2. The acquisition of Alliance Bankshares Corporation (ABVA) by Eagle Bancorp (EGBN) for $31.2 million in an all stock deal, where Alliance shareholders will receive 0.4317 shares (the “Conversion Ratio”) of Eagle common stock for each share of Alliance common stock subject to adjustment based upon certain factors set forth in the Agreement. I have analyzed some complex deals in the past but the lengthy list of factors that could affect the conversion ratio of this deal takes the cake. It is therefore not surprising that the spread on the deal is so large. You can find additional information about the adjustment to the “conversion ratio” in this 8-K form filed with the SEC.
  3. The acquisition of Allied Healthcare International (AHCI) by Saga Group Limited for $175 million or $3.90 per share in cash.


Closed Deals:

  1. The acquisition of L-1 Identity Solutions (ID) by Safran on July 26, 2011
  2. The acquisition of Integral Systems (ISYS) by Kratos Defense & Security Solutions (KTOS) on July 28, 2011
  3. The acquisition of Sterling Bancshares (SBIB) by Comerica Incorporated (CMA) on July 28, 2011


Top 10 deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
GRAN 04/27/2011 FNB United Corp (FNBN) $1.49 $0.835 09/30/2011 77.84% 473.55%
HRBN 06/20/2011 Tech Full Electric Company Limited (N/A) $24.00 $16.43 12/31/2011 46.07% 110.64%
FNDT 06/27/2011 S1 Corporation (SONE) $25.57 $18.90 12/31/2011 35.28% 84.72%
TAM 01/19/2011 LAN Airlines S.A. (LFL) $23.56 $19.47 12/31/2011 21.02% 50.47%
MHS 07/21/2011 Express Scripts, Inc. (ESRX) $72.75 $62.88 06/30/2012 15.70% 17.15%
ABVA 07/27/2011 Eagle Bancorp, Inc. (EGBN) $5.82 $5.10 12/31/2011 14.19% 34.07%
CFSG 05/20/2011 Bain Capital Partners (N/A) $9.00 $7.89 11/15/2011 14.07% 48.44%
HYC 11/17/2010 Verifone Systems (PAY) $9.06 $8.11 09/30/2011 11.65% 70.89%
CSR 04/20/2011 Rightmark Holdings Limited (N/A) $6.50 $5.83 09/30/2011 11.49% 69.91%
CRU 05/05/2011 Capital Product Partners L.P. (CPLP) $12.59 $11.52 09/30/2011 9.28% 56.46%

List of all pending deals:

  Symbol Announced
Date
Acquiring
Company
Deal
Type
Closing
Value
Closing
Price
Last
Price
Volume Closing

Date

Profit Annu.
Profit
+ GRAN 04/27/2011 FNB United Corp (FNBN) All Stock N/A $1.49 $0.835 6,953 09/30/2011 77.84% 473.55%
+ HRBN 06/20/2011 Tech Full Electric Company Limited (N/A) All Cash N/A $24.00 $16.43 1,334,602 12/31/2011 46.07% 110.64%
+ FNDT 06/27/2011 S1 Corporation (SONE) All Stock $700 million $25.57 $18.90 51,410 12/31/2011 35.28% 84.72%
+ TAM 01/19/2011 LAN Airlines S.A. (LFL) All Stock N/A $23.56 $19.47 2,563,840 12/31/2011 21.02% 50.47%
+ MHS 07/21/2011 Express Scripts, Inc. (ESRX) Cash Plus Stock $29.1 billion $72.75 $62.88 5,976,242 06/30/2012 15.70% 17.15%
+ ABVA 07/27/2011 Eagle Bancorp, Inc. (EGBN) All Stock $31.2 million $5.82 $5.10 N/A 12/31/2011 14.19% 34.07%
+ CFSG 05/20/2011 Bain Capital Partners (N/A) All Cash $265.5 million $9.00 $7.89 76,520 11/15/2011 14.07% 48.44%
+ HYC 11/17/2010 Verifone Systems (PAY) All Stock $485 million $9.06 $8.11 1,136,978 09/30/2011 11.65% 70.89%
+ CSR 04/20/2011 Rightmark Holdings Limited (N/A) All Cash $583.2 million $6.50 $5.83 1,905,227 09/30/2011 11.49% 69.91%
+ CRU 05/05/2011 Capital Product Partners L.P. (CPLP) All Stock $281.3 million $12.59 $11.52 91,710 09/30/2011 9.28% 56.46%
+ ZRAN 02/21/2011 CSR PLC (CSR.L) Cash Plus Stock $484 million $8.96 $8.30 346,892 09/30/2011 7.99% 48.58%
+ CEG 04/28/2011 Exelon Corporation (EXC) All Stock $7.9 billion $40.99 $38.83 1,564,143 01/31/2012 5.55% 11.07%
+ ENP 07/11/2011 Vanguard Natural Resources (VNR) All Stock $545 million $22.90 $21.95 91,038 12/31/2011 4.32% 10.37%
+ PGN 01/10/2011 Duke Energy Corporation (DUK) All Stock $13.7 billion $48.59 $46.74 1,444,921 12/31/2011 3.96% 9.52%
+ VSEA 05/04/2011 Applied Materials Inc. (AMAT) All Cash $4.9 billion $63.00 $60.74 934,916 09/30/2011

3.72%

22.63%
+ BBBB 07/01/2011 Providence Equity Partners (N/A) All Cash $1.64 billion $45.00 $43.56 976,263 12/31/2011 3.31% 7.94%
+ FTLK 05/31/2011 Fortress Group Limited (N/A) All Cash $443 million $7.20 $7.00 36,787 09/30/2011 2.86% 17.38%
+ SMOD 04/26/2011 Silver Lake Partners and Silver Lake Sumeru (N/A) All Cash $645 million $9.25 $9.00 4,556,286 09/30/2011 2.78% 16.90%
+ CNU 06/27/2011 Metropolitan Health Networks (MDF) Cash Plus Stock $416 million $6.48 $6.32 534,760 09/30/2011 2.60% 15.82%
+ PVSA 06/15/2011 F.N.B. Corporation (FNB) All Stock $130 million $21.78 $21.24 24,108 12/31/2011 2.54% 6.11%
+ KCI 07/13/2011 Consortium of Funds (N/A) All Cash $6.3 billion $68.50 $66.94 2,221,595 12/31/2011 2.33% 5.60%
+ AHCI 07/29/2011 Saga Group Limited (N/A) All Cash $175 million $3.90 $3.82 24,657,576 12/31/2011 2.09% 5.03%
+ ALTH 07/20/2011 Amag Pharmaceuticals (AMAG) All Stock $686 million $1.90 $1.86 2,196,065 12/31/2011

2.08%

4.99%
+ CEPH 05/02/2011 Teva Pharmaceutical Industries Ltd. (TEVA) All Cash $6.8 billion $81.50 $79.94 4,050,090 09/30/2011 1.95% 11.87%
+ LOOP 04/27/2011 CoStar Group (CSGP) Cash Plus Stock $860 million $18.68 $18.32 208,665 12/31/2011 1.94% 4.66%
+ BLUD 07/05/2011 TPG Capital (N/A) All Cash $1.973 billion $27.00 $26.50 1,366,190 12/31/2011 1.89% 4.53%
+ CONM 07/12/2011 Ayelet Investments (N/A) All Cash $57.2 million $3.85 $3.78 44,801 09/30/2011 1.85% 11.27%
+ ORCH 04/06/2011 Laboratory Corporation of America Holdings (LH) All Cash $85.4 million $2.80 $2.75 69,596 07/31/2011 1.82% 0.00%
+ BJ 06/29/2011 affiliates of Leonard Green & Partners (N/A) All Cash $2.8 billion $51.25 $50.35 1,964,915 12/31/2011 1.79% 4.29%
+ CLFC 12/09/2010 Nara Bancorp Inc. (NARA) All Stock $285.7 million $6.27 $6.16 284,339 09/30/2011 1.73% 10.53%
+ APAC 07/07/2011 One Equity Partners (N/A) All Cash $470 million $8.55 $8.41 1,265,921 12/31/2011 1.66% 4.00%
+ PNNW 11/12/2010 City of Nashua (N/A) All Cash $138 million $29.00 $28.55 6,168 09/30/2011 1.58% 9.59%
+ HK 07/15/2011 BHP Billiton (BHP) All Cash $15.1 billion $38.75 $38.19 19,104,984 09/30/2011

1.47%

8.92%
+ SERV 06/27/2011 Scientific Conservation (N/A) All Cash $13 million $3.50 $3.45 17,600 10/31/2011 1.45% 5.81%
+ TGE 03/21/2011 Dawson Geophysical Company (DWSN) All Stock $157 million $7.46 $7.36 63,041 08/15/2011 1.38% 36.03%
+ GLBC 04/11/2011 Level 3 Communications (LVLT) All Stock $3.00 billion $34.88 $34.43 280,167 12/31/2011 1.31% 3.14%
+ GAS 12/07/2010 AGL Resources Inc. (AGL) Cash Plus Stock $2.4 billion $55.40 $54.70 394,267 09/30/2011 1.28% 7.77%
+ HNB 06/02/2011 BankUnited Inc. (BKU) Cash Plus Stock $71.4 million $3.82 $3.77 N/A 12/31/2011 1.22% 2.94%
+ STBC 04/28/2011 Valley National Bancorp (VLY) All Stock $222 million $13.15 $13.00 16,979 10/31/2011 1.15% 4.63%
+ NSM 04/05/2011 Texas Instruments Incorporated (TXN) All Cash $6.5 billion $25.00 $24.72 4,569,386 01/31/2012 1.13% 2.26%
+ NSTC 06/10/2011 affiliate of Citi Venture Capital International (CVCI) (N/A) All Cash $307 million $7.75 $7.67 219,341 10/31/2011 1.04% 4.18%
+ OXPS 03/21/2011 Charles Schwab Corp. (SCHW) All Stock $1 billion $15.23 $15.10 619,366 09/30/2011

0.85%

5.18%
+ FPIC 05/24/2011 The Doctors Company (N/A) All Cash $362 million $42.00 $41.72 34,017 12/31/2011 0.67% 1.61%
+ NST 10/18/2010 Northeast Utilities (NU) All Stock $4.17 billion $44.61 $44.33 291,214 09/30/2011 0.63% 3.81%
+ GRM 06/17/2011 Reynolds Group Holdings (N/A) All Cash $4.5 billion $25.50 $25.35 970,908 12/31/2011 0.59% 1.42%
+ SFN 07/21/2011 Randstad Holding (N/A) All Cash $770 million $14.00 $13.92 1,348,990 09/30/2011

0.57%

3.50%
+ TBL 06/13/2011 VF Corp (VFC) All Cash $2 billion $43.00 $42.79 1,701,622 09/30/2011 0.49% 2.99%
+ CV 07/12/2011 Gaz metro Limited Partnership (N/A) All Cash $702 million $35.25 $35.09 58,895 12/31/2011 0.46% 1.09%
+ NLCI 05/18/2011 Leeds Equity Partners (N/A) All Cash $149 million $11.75 $11.70 10,500 11/30/2011 0.43% 1.29%
+ DEP 02/23/2011 Enterprise Products Partners (EPD) All Stock N/A $42.01 $41.85 45,525 09/30/2011 0.37% 2.27%
+ ELMG 06/13/2011 Honeywell International (HON) All Cash $491 million $33.00 $32.88 507,141 09/30/2011

0.36%

2.22%
+ TLVT 06/01/2011 Schneider Electric (N/A) All Cash $2.02 billion $40.00 $39.88 319,615 09/30/2011 0.30% 1.83%
+ ABBC 01/26/2011 Susquehanna Bancshares, Inc. (SUSQ) All Stock $273 million $9.94 $9.91 24,218 09/30/2011 0.30% 1.82%
+ LZ 03/14/2011 Berkshire Hathaway (N/A) All Cash $9.7 billion $135.00 $134.60 1,527,245 09/30/2011 0.30% 1.81%
+ MDMD 06/16/2011 DG FastChannel (DGIT) All Cash $517 million $22.00 $21.94 N/A 09/30/2011

0.27%

1.66%
+ ARJ 07/11/2011 Lonza Group Ltd (N/A) All Cash $1.4 billion $47.20 $47.12 601,288 12/31/2011 0.17% 0.41%
+ ICGN 07/20/2011 Pfizer Inc. (PFE) All Cash $56 million $6.00 $6.00 381,937 12/31/2011 0.00% 0.00%
+ AMN 07/05/2011 National Oilwell Varco, Inc. (NOV) All Cash $772 million $85.00 $85.09 122,292 12/31/2011

-0.11%

-0.25%
+ GRB 06/13/2011 Vector Capital (N/A) All Cash $281.8 million $11.00 $11.02 224,969 11/15/2011 -0.18% -0.62%
+ RADS 07/11/2011 NCR Corporation (NCR) All Cash $1.2 billion $28.00 $28.19 212,361 09/30/2011

-0.67%

-4.10%
+ DPL 04/19/2011 AES Corporation (AES) All Cash $4.7 billion $30.00 $30.25 735,585 01/31/2012 -0.83% -1.65%
+ NLC 07/20/2011 Ecolab Inc. (ECL) All Stock $5.4 billion $35.03 $35.35 2,938,697 12/31/2011 -0.92% -2.21%
+ TOBC 06/20/2011 Susquehanna Bancshares (SUSQ) All Stock $343 million $26.13 $26.49 86,845 03/31/2012

-1.37%

-2.06%
+ AATI 05/26/2011 Skyworks Solutions, Inc. (SWKS) Cash Plus Stock $258.6 million $5.89 $6.05 371,548 09/30/2011 -2.67% -16.26%
+ TRH 06/12/2011 Allied World Assurance Company Holdings (AWH) All Stock $3.2 billion $47.92 $51.21 382,419 12/31/2011 -6.43% -15.45%
+ BARI 04/20/2011 Brookline Bancorp (BRKL) Cash Plus Stock $234 million $40.07 $43.87 9,941 12/31/2011 -8.67% -20.83%
+ SUG 06/16/2011 Energy Transfer Equity (ETE) All Stock $8.9 billion $37.32 $43.00 2,060,720 03/31/2012 -13.21% -19.84%
+ OCNFD 07/26/2011 DryShips, Inc. (DRYS) Cash Plus Stock $118 million $13.21 $16.86 N/A 12/31/2011 -21.64% -51.95%
+ DTG 04/26/2010 Avis (CAR) Cash Plus Stock $1.56 billion $55.68 $72.04 418,917 12/31/2011

-22.71%

-54.54%
+ NYX 02/15/2011 Deutsche Boerse (N/A) All Stock N/A $13.93 $33.46 1,742,884 12/31/2011 -58.38% -140.19%
+ ALKS 05/09/2011 Elan Corporation (ELAN) Cash Plus Stock $960 million N/A $17.24 586,670 09/30/2011 N/A N/A
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