Merger Arbitrage Mondays – July 11, 2011

Expected to close in the third quarter of 2011 in an all-stock deal. Upon completion of the merger, Bank of Granite shareholders will receive 3.375 shares of FNB's common stock in exchange for each share of Bank of Granite common stock they own.

As part of this transaction, The Carlyle Group and Oak Hill Capital Partners, have each entered into definitive agreements with FNB United to invest $77.5 million in the common stock of FNB United subject to the conditions set forth in the agreements as part of a $310 million private placement of FNB United's common stock.

The Carlyle Group and Oak Hill Capital Partners will each receive approximately 484 million shares of common stock at the closing not to exceed 24.9 percent of the then-outstanding shares of common stock, valued at $0.16 a share.

Expected to close in the fourth quarter of 2011. Upon completion of the merger, Harbin Electric shareholders will receive $24.00 per share in cash.

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.

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 by November 15, 2011 for a closing value of $265.5 million. Upon completion of the merger, China Fire and Security Group shareholders will receive $9.00 per share in cash.

Expected to close in the third 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.

June 17, 2011: CSR agreed to reduced price of $484 million to buy Zoran Corporation. Under the Revised Terms, Zoran shareholders will receive US$6.26 in cash and 0.589 ordinary shares of CSR in the form of American Depositary Shares (each an “ADS”, and each ADS representing four ordinary shares) for each share of Zoran common stock held.

Expected to close in the third quarter of 2011 for a closing value of $443 million. Upon completion of the merger, Funtalk China Holdings shareholders will receive $7.20 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $281.3 million in an all-stock deal. Upon comlpletion of the merger, Crude Carriers shareholders will receive 1.56 CPLP common units for each Crude Carriers share.

Expected to close in the second half of 2011 for a closing value of $2.5 billion. Upon completion of the merger, SAVVIS shareholders will receive in exchange for each Savvis share $30 in cash and $10 in CenturyLink shares.

The number of CenturyLink shares issued will be based upon the volume-weighted average price of CenturyLink stock during the thirty trading day period ending three trading days prior to the closing, provided that if this average price is less than or equal to $34.42, each Savvis share will receive $30 in cash and 0.2905 of a CenturyLink share.

Expected to close in early 2012 for a closing value of $7.9 billion in an all-stock deal. Upon completion of the merger, Constellation shareholders will receive 0.93 shares of Exelon for each Constellation share.

Expected to close in the third calendar quarter of 2011 for a closing value of $416 million in a cash plus stock deal, where shareholders of Continucare will receive $6.25 per share in cash, and 0.0414 of a share of Metropolitan common stock f0r each share of Continucare common stock. The exact value of the consideration per share will depend on Metropolitan's share price at closing. Metropolitan expects to issue approximately 2.7 million shares in connection with the transaction.

Expected to close in the fourth quarter of 2011 for a closing value of $130 million in an all stock deal. Upon completion of the merger, Parkvale Financial Corporation's shareholders will receive 2.178 shares of F.N.B. Corporation common stock for each share of Parkvale Financial Corporation stock. 

Expected to close in the third quarter of 2011 for a closing value of $4.9 billion. Upon completion of the merger, Varian shareholders will receive $63 in cash for each share of Varian stock they hold. 

The closing of the acquisition is subject to customary conditions, including approval by Varian's shareholders and review by U.S. and international regulators. 

Expected to close in Servidyne's second fiscal quarter ending October 31, 2011 for a closing value of $13 million. Upon completion of the merger, Servidyne's shareholders will receive $3.50 per share in cash.

Expected to close in the second 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.

Update June 3, 2011: The Committee on Foreign Investment in the United States (CFIUS) has launched a 45 day investigation that is expected is expected to complete on or before July 18 as discused in this article. We have updated the closing date to 7/31/2011.

Expected to close in the first quarter of 2012 for a closing value of $343 million in a cash or stock transaction, where Tower Bancorp shareholders will receive either 3.4696 shares of Susquehanna Bancshares common stock or $28.00 in cash per share held with $88 million of the aggregate consideration being paid in cash. Since a majority of the consideration will be paid out as stock, we have classified this deal as an all stock deal in our Merger Arbitrage Tool.

Expected to close in the fourth quarter of 2011 for a closing value of $3.2 billion in an all stock deal. Upon completion of the merger, Transatlantic Holdings shareholders will receive 0.88 of Allied share for each Transatlantic share to form TransAllied Group Holdings AG.

Expected to close early in the fourth quarter of 2011 for a closing value of $222 million in an all-stock deal. Upon completion of the merger, State Bancorp shareholders will receive 1 share of Valley National Bancorp common stock per State Bancorp share held.

Expected to close in the fourth quarter of 2011 for a closing value of $1.64 billion. Upon completion of the merger, Blackboard's shareholders will receive $45.00 per share in cash.

Expected to close by the end of the year in a cash plus stock deal. Upon completion of the merger,  LoopNet shareholders will receive $16.50 in cash and 0.03702 shares of CoStar Group common stock per share held.

Expected to close in the third quarter of 2011 for a closing value of $6.8 billion. Upon completion of the merger, Cephalon's shareholders will receive $81.50 per share in cash.

Expected to close in the fourth quarter of 2011 for a closing value of $2.8 billion. Upon completion of the merger, BJ's Wholesale Club's shareholders will receive $51.25 per share in cash.

Expected to close in the fourth quarter of 2011 for a closing value of $470 million. Upon completion of the merger, APAC Customer Services shareholders will receive $8.55 per share in cash.

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 within the next six months for a closing value of $149 million. Upon completion of the merger, Nobel Learning Communities shareholders will receive $11.75 per share in cash.

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 next three to six months for a closing value of $307 million. Upon completion of the merger, Ness Technologies shareholders will receive $7.75 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 third calendar quarter of 2011 for a closing value of $645 million. Upon completion of the merger, SMART Modular Technologies shareholders will receive $9.25 per share in cash.

Expected to close in the second quarter of 2011 for a closing value of $108 million. On the completion of the merger, Legacy Bancorp shareholders will receive 0.56385 Berkshire common shares plus $1.30 in cash in a cash plus stock deal.

Upon completion of the merger, Duncan Energy Partners shareholders will receive 0.9545 Enterprise common units for each issued and outstanding publicly-held Duncan Energy Partners common unit.

Update(s)

April 29, 2011: Enterprise Products Partners L.P. and Duncan Energy Partners L.P. Announce Merger Agreement

On June 17, 2011, Graham Packaging Company terminated its merger agreement with Silgan Holdings (SLGN) and agreed to be acquired by Reynolds Group Holdings. The deal is expected to close in the second half of this year for a closing value of $4.5 billion. Upon completion of the merger, Graham Packaging Company's shareholders will receive $25.50 per share in cash. The deal is expected to close in the second half of this year.

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 fourth quarter of 2011 for a closing value of $362 million. Upon completion of the merger, FPIC Group shareholders will receive $42.00 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 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.

Expected to close in the third quarter of 2011 for a closing value of $2.02 billion. Upon completion of the merger, Telvent's shareholders will receive $40.00 per share in cash.

Expected to close in the second half of 2011 for a closing value of $1.973 billion. Upon completion of the merger, Immucor shareholders will receive $27.00 per share in cash.

Expected to close in the third calendar quarter of 2011 for a closing value of $3.3 billion. Upon completion of the merger, Warner Music Group's shareholders will receive $8.25 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 enterprise value of $414 million. Upon completion of the merger, MediaMind's shareholders will receive $22.00 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $266 million in a cash plus stock deal, where each Integral Systems share will be converted into $5.00 in cash and 0.588 of a share of Kratos common stock.

Expected to close in the third quarter of 2011 for a closing value of $491 million. Upon completion of the merger, EMS Technologies shareholders will receive $33.00 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $525 million. Upon completion of the merger, PRIMEDIA shareholders will receive $7.10 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $232 million. Upon completion of the merger, Kendle International's shareholders will receive $15.25 per share in cash.

Expected to close in the third quarter of 2011 for a closing value of $2 billion. Upon completion of the merger, Timberland's shareholders will receive $43.00 per share in cash.

Expected to close as early as the fouth quarter of 2011 for a closing value of $772 million. Upon completion of the merger, Ameron International shareholders will receive $85.00 per share in cash.

Expected to close in the fourth quarter of 2011 for a closing value of $71.4 million. Upon completion of the merger, Herald National Bank shareholders will receive either cash or BankUnited common stock with a value of $1.35 in cash and 0.099 shares of BankUnited common stock, subject to proration.

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 in the second half of calendar 2011 for a closing value of $281.8 million. Upon completion of the merger, Gerber Scientific's shareholders will receive $11.00 per share in cash.

Shareholders will also receive a non-transferable right to receive contingent cash payments at future times, if recoveries are made pursuant to certain litigation claims in respect of U.S. Patent 5,537,135 (a computerized “print to cut” technology patent).

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 six to twelve months for a closing value of $700 million. Upon completion of the merger, Central Vermont Public Services shareholders will receive $35.10 per share in cash.

Expected to close in the first quarter of 2012 for a closing value of $7.9 billion. Upon completion of the merger, Southern Union Company's shareholders will receive $33.00 per share in series B units of ELMG. These series B units are expected to list on the NYSE and will have an annualized distribution yield of 8.25%. ETE has the option to redeem the Series B Units at any time after the closing of the transaction.

Update(s)

June 24, 2011: Southern Union Company SUG received a proposal by The Williams Companies, Inc. WMB to acquire all of the outstanding shares of Southern Union for $39.00 per share in cash.

July 05, 2011: Energy Transfer Equity, L.P. ETE and Southern Union Company SUG today announced that they have entered into an amended and restated merger agreement under which ETE will acquire SUG for $8.9 billion, including $5.1 billion in cash and ETE common units. 

Under the terms of the revised agreement, which has been unanimously approved by the boards of directors of both companies, SUG shareholders can elect to exchange their common shares for $40.00 of cash or 0.903 ETE common units. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration.

Expected to close in the third quarter of 2011 for a closing value of $258.6 million in an all stock deal. Upon completion of the merger, Advanced Analogic Technologies shareholders will receive $3.68 in cash and 0.08725 of Skyworks Solutions common stock for each Advanced Analogic Technologies share held.

The stock component of the price has a nominal value of $2.45 for a total value of $6.13. The cash portion will be adjusted higher or reduced at closing based on the stock portion to maintain a total value of $6.13. So for all practical purposes this could be considered an all cash deal.

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.

Update May 09, 2011: Hertz makes a new $2.24 billion bid for Dollar Thrifty that works out to $72/share.

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 third quarter of 2011 for a closing value of $960 million. Alkermes (ALKS) has agreed to merge with Elan Drug Technologies, the drug formulation and manufacturing business unit of Elan Corporation (ELN), in a $960 million cash plus stock deal that will lead to the creation of a new company called Alkermes plc incorporated in Ireland. Elan will receive $500 million in cash and 31.9 million shares of the new Alkermes plc common stock. Existing shareholders of Alkermes, Inc. will receive one ordinary share of Alkermes plc in exchange for each share of Alkermes, Inc. they own in a taxable transaction.