Coverage List

Stock

Ticker

Date Published

Market Price on Publication Date

Recommendation

FirstGroup

FGP LN

03/06/2022

1.37

We believe the bidder might need to further increase its bid to secure board support.

VMWare

VMW US

01/06/2022

129

The deal spread does not appear to be attractive at this point given the long deal timeline.

ManTech International

MANT US

31/05/2022

95.4

Deal risk is limited. We wouldn’t expect a counterbid as there might have been a sale process before the agreement with Carlyle.

Siemens Gamesa

SGRE SM

31/05/2022

17.85

Given the actual market conditions and the outlook for Gamesa, we do not expect a bump in the offer price as the substantial downside for the standalone company increases the probability of the shareholders tendering into the offer

Cerner

CERN US

27/05/2022

94.68

Removed from best ideas list in Deal Digest May 27, 2022

HomeServe

HSV LN

27/05/2022

1163

The deal spread appears to be somewhat wide given the upside optionality to the deal timeline and the limited deal risk. We note the significant downside.

Swedish Match

SWMA SS

24/05/2022

101.85

We expect the deal to go through as we see no major competition issues. We also see some upside, as PM could raise the offer price under SWMA shareholder pressure.

Black Knight

BKI US

23/05/2022

71.81

The current spread reflects the lengthy deal timeline and the probability of the deal falling apart. We
also note that there is no litigation obligation and divestiture obligation is limited to BKI assets.

Tower Semiconductor

TSEM US

20/05/2022

45.69

Added to best ideas list in Deal Digest May 20, 2022

Tegna

TGNA US

20/05/2022

20.99

Added to best ideas list in Deal Digest May 20, 2022

Columbia Care

CCHW CN

20/05/2022

2.69

Added to best ideas list in Deal Digest May 20, 2022

Silicon Motion Technology Corp

SIMO US

20/05/2022

90.67

We would not take a position long SIMO at this point given the lengthy timeline. The Chinese approval poses substantial risk to the deal, in our view.

Alliance Aviation

AQZ AU

19/05/2022

4.01

We believe that the antitrust risk is high. The ACCC’s comments after its 3-year review of Qantas’ original minority stake purchase, the limited number of competitors in the target’s key markets and Alliance’s collaboration agreement with Virgin make us cautious.

Zynga

ZNGA US

20/05/2022

8.18

Removed from best ideas list in Americas Best Ideas May 16, 2022

Biohaven

BHVN US

16/05/2022

141

Deal risks appear to be limited. We note that product related adverse events are not carved out of MAE.

Twitter

TWTR US

11/05/2022

47.26

The deal spread appears to be somewhat wide. Assuming a $30 downside and an early August deal close deal closing probability is around 72%.

Shaw Communications

SJR/B CN

09/05/2022

34.87

The key question is whether Rogers believes that deal benefits (larger cable business, 5G spectrum) outweigh the competitive threat posed by a stronger Quebecor. We are less convinced, that Rogers would vigorously pursue the deal in case Quebecor is not approved as a buyer before the extended Outside date, July 31.

Activision

ATVI US

06/05/2022

77.84

Added to best ideas list in Deal Digest May 6, 2022

Accel Group

ACCEL NA

06/05/2022

57

Added to best ideas list in Deal Digest May 6, 2022

Atlantia

ATL IM

06/05/2022

22.85

Added to best ideas list in Deal Digest May 6, 2022

Meggitt

MGGT LN

06/05/2022

778

Added to best ideas list in Deal Digest May 6, 2022

Link

LNK AU

06/05/2022

4.96

We would take a long position on Link as we think the Woodford issue will not materialize in any public finding from the FCA in the upcoming months, but we would wait the next merger update to assess the possible timeline delay to mitigate the downside risk.

Ubisoft Entertainment

UBI FP

04/05/2022

43.01

We believe Ubisoft is likely to receive indicative proposals from either PEs or strategic buyers.

Datto

MSP US

04/05/2022

34.61

The deal spread appears to be wide given the limited deal risk. The number of competitors makes a rigorous antitrust review unlikely. Further, in case of an extended review, the divestiture obligation makes a successful deal close likely.

South Jersey Industries

SJI US

29/04/2022

34.42

The long timeframe and potential regulatory risks do not justify a position long SJI for now. However, the deal will ultimately be approved in our view, after a thorough review.

Autogrill Spa

AGL IM

27/04/2022

6.9

The deal has a good chance of approval in our view, given the complementary nature (both in terms of geographic and product category exposure) of the businesses and factors that highlight the competitiveness of the travel retail market and the bidding for concessions:

Ramsay Health

RHC AU

25/04/2022

84.27

We expect a firm deal to be struck most likely under these conditions, however we cannot rule out a slightly higher offer, as Ramsay’s books may forecast a brighter than expected future as covid restrictions are almost completely gone

Citrix

CTXS US

22/04/2022

101.5

Added to best ideas list in Deal Digest April 22, 2022

Ferro

FOE US

22/04/2022

22.01

Removed from best ideas list in Deal Digest April 22, 2022

Twitter

TWTR US

22/04/2022

47.08

Given Musk’s commitment to the deal and the potential upside to the current proposal one may consider a position long TWTR. We note the substantial downside which could be even lower once Musk becomes a seller of TWTR shares.

Atlantia

ATL IM

20/04/2022

22.79

A counter bid or a higher offer appear unlikely. The deal could close in 3Q2022.

Intersect ENT

XENT US

14/04/2022

27.96

Removed from best ideas list in Deal Digest April 14, 2022

Euronav

EURN BB

14/04/2022

11.82

Update - We are altering our view laid out in our April 13 initiation report. As a successful deal close without CMB’s support is unlikely, there is a risk that parties reconsider their intention to combine or in case they push forward with a firm deal, it might fail on shareholder opposition. We no longer recommend setting up the deal spread.

Nielsen Holdings

NLSN US

14/04/2022

27.24

Despite WindAcre’s opposition, bidders have a good shot to succeed with takeover offer, in our view. The key question is whether WindAcre manages to convince enough Nielsen shareholders to oppose the transaction.

Euronav

EURN BB

13/04/2022

11.82

Given the high probability of a firm deal and a tighter spread post announcement, one may consider a long position on the deal spread.

Neenah

NP US

08/04/2022

38.23

Regulatory risk is limited. Shareholder opposition might arise as the value of SWM’s all-share offer is lower than NP’s current share price.

Pendal

PDL AU

08/04/2022

5.27

We expect the Pendal Board to reject the offer under these terms, as it is opportunistic and undervalues PDL. As the Fund Management sector needs to consolidate, we expect PPT to sweeten its bid.

Spirit Airlines

SAVE US

07/04/2022

26.28

We see the SAVE/ULCC merger more viable from a regulatory perspective than a SAVE/JBLU combination. The SAVE board, however might find it hard to turn down JBLU’s offer.

Columbia Care

CCHW CN

05/04/2022

3.59

The deal spread appears to be wide given the limited downside, therefore would recommend a position long the deal spread.

Western Areas

WSA AU

01/04/2022

3.65

We think that the bullish outlook of nickel and the pressure put on IGO by the Indepent Expert’s report and WSA shareholders will result in a sweetend offer price. Downside risk seems limited based on WSA valuation.

LHC Group

LHCG US

31/03/2022

168

We would not be surprised if the deal received a second request given UNH’s size and its acquisition of Landmark Health.

Anaplan

PLAN US

29/03/2022

65.13

Deal risk is limited. We attach low chance to a counterbid given the fair premium and the support of activist shareholders.

Neles

NELES FH

25/03/2022

9.11

Removed from best ideas list in Deal Digest March 25, 2022

Pearson

PSON LN

25/03/2022

767

A 30%-50% probability of an improved and agreed offer around 900p-950p makes us believe that the current PSON share price offers a favorable risk/reward to enter a position long PSON below ~770p.

Turquoise Hill Resources

TRQ CN

23/03/2022

38.24

We believe Rio Tinto needs to improve its offer materially to succeed.

Mediaset Espana

TL5 SM

22/03/2022

4.59

We expect MES shareholders to reject the offer and MFE to return with a sweetened bid to pursue its European expansion plans. TL5 downside appears to be limited at these levels.

Mandiant

MNDT US

18/03/2022

22.15

We would take a position long MNDT at current stage.

Avast

AVST LN

18/03/2022

568

Our main concern is that remedies might be difficult to structure.

CareTech

CTH LN

11/03/2022

670

We see likely that a firm deal announcement will happen before the April 4 deadline with an offer price around GBp725-775.

Houghton Mifflin Harcourt

HMHC US

08/03/2022

20.88

We believe the limited downside, the short timeframe, and the substantial upside offer a favorable risk-reward for a position long HMHC.

Nuance

NUAN US

04/03/2022

55.99

Removed from best ideas list in Deal Digest March 4, 2022

Z Energy

ZEL NZ

04/03/2022

3.68

Removed from best ideas list in Deal Digest March 4, 2022

Oxford Instruments

OXIG LN

04/03/2022

23

We believe a firm deal has strong strategic rationale, as the product portfolios are rather complementary. We see no upside to the offer price; however downside is significant in a no-deal situation. The Ukrainian war might also affect the chances of a firm deal.

AGL Energy

AGL AU

04/03/2022

7.42

We expect the bidder to come back with an improved offer. We expect a lengthy regulatory review in case a firm deal is reached.

Tegna

TGNA US

02/03/2022

22.84

The deal spread appears to be somewhat wide however the lengthy deal timeline makes us cautious recommending a position long TGNA this time.

Z Energy

ZEL NZ

02/03/2022

3.64

The key risk is timing, as the NZCC in our view is likely to require upfront divestiture of the Gull business.

MoneyGram International

MGI US

25/02/2022

10.75

Deal risk appears to be limited. We recommend a position long MGI going into the go-shop period, as the current deal spread offers a cheap bet on a low probability counterbid.

Tower Semiconductor

TSEM US

23/02/2022

46.87

We expect the deal to receive regulatory approvals given the complementary nature and the limited market share in the foundry business. The key question appears to be timing of the SAMR decision.

US Ecology

ECOL US

22/02/2022

47.2

Considering a mid 2Q 2022 deal close the deal spread is at the upper end of a plain vanilla transaction. However we cannot completely rule out a rigorous review and some delay in the deal timeline. This makes us refrain from recommending a position long ECOL at current stage. Ultimately we see the
deal being closed.

John Menzies

MNZS LN

18/02/2022

5.83

We believe there is a good chance for a firm deal either at 605p or more

BioDelivery Sciences

BDSI US

16/02/2022

5.56

The deal spread does not appear to be attractive. An extended review appears unlikely, therefore the deal could close in line with the 1Q guidance.

Link Net TBK

LINK IJ

15/02/2022

4330

Added to best ideas list in APAC Best Ideas February 15, 2022

Zynga

ZNGA US

15/02/2022

9.05

Added to best ideas list in Americas Best Ideas February 15, 2022

Cerner

CERN US

15/02/2022

92.03

Added to best ideas list in Americas Best Ideas February 15, 2022

Vivo Energy

VVO LN

15/02/2022

133

Added to best ideas list in Euro Best Ideas February 15, 2022

VIB Vermoegen

VIH1 GR

11/02/2022

52.8

We don’t see significant chance for a higher offer from DIC. The effective minimum acceptance condition of 18.5% is quite low and waivable. VIB appears to be overvalued compared to its peers and DIC faces constraints to improve its bid (leverage, FFO accretion).

Cedar Fair

FUN US

11/02/2022

59.71

Reaching a firm deal might be difficult and a hostile offer seems unlikely given FUN’s strong takeover defenses. We note the substantial upside above $75. Downside in a no deal situation is around $50.

Spirit Airlines

SAVE US

11/02/2022

27.3

The merger is likely to face antitrust scrutiny in the US. The merging parties compete in several overlapping city-pairs, where they would have ability and incentive to raise prices after the combination.

Citrix

CTXS US

04/02/2022

102.9

Deal risks appear to be limited, however we find the current spread unattractive.

Link Net TBK

LINK IJ

02/02/2022

4430

We believe the transaction will receive the necessary approvals in the expected timeline, offering attractive upside potential.

Neo Lithium

NLC CN

28/02/2022

6.49

Removed from best ideas list in Best Ideas January 28, 2022

Accel Group

ACCEL NA

22/01/2022

57.5

Given that deal risks are limited, one may consider a position long ACCEL on a possible counterbid. However we see this as a wild card scenario.

Bluerock Residential Growth REIT

BRG US

27/01/2022

26.64

We believe deal risks are limited. As per our valuation, the share consideration from the spin-off may be worth more than what is implied in the current market price of BRG. 

Zogenix

ZGNX US

25/01/2022

25.93

We expect that the regulatory review will be short given we see no serious antitrust issues. The current market price appears to offer a cheap option on the $2 CVR, which seems to have a high likelihood to be paid out.

Activision

ATVI US

21/01/2022

82.15

We would not take a position at this time as the deal review will drag into 2023

Clinigen

CLIN LN

21/01/2022

907

The probability of an improved offer or a counterbid is low. However, considering the limited deal risk the deal spread appears to be somewhat wide. We recommend a position long CLIN.

Aspire Global

ASPIRE SS

20/01/2022

107.8

The deal seems to be sealed as there is major cross-ownership between the companies. Due to the minimal deal risk, the deal spread appears to be attractive, but we note that Aspire Global was not very liquid prior to deal announcement.

Ferro

FOE US

18/01/2022

21.65

Added to best ideas list in Best Ideas January 18, 2022

Siltronic

WAF GY

18/01/2022

127

Removed from best ideas list in Best Ideas January 18, 2022

Link

LNK AU

18/01/2022

5.54

We see upside potential in the offer price, as Link’s PEXA stake appreciated since deal announcement. On the other hand, Link has been in sale talks for more than a year and has not traded at the offer price for almost 2 years.

Apria

APR US

14/01/2022

37.29

We expect the deal to close in April / early May 2022.

Zynga

ZNGA US

14/01/2022

9.06

The deal spread appears to be wide. We recommend a position long ZNGA going into the go-shop period as a cheap bet on a low probability counterbid.

Drilling Co of 1972

DRLCO DC

07/01/2022

267.8

Added to best ideas list in Deal Digest January 7, 2022

Neo Lithium

NLC CN

07/01/2022

6.32

Added to best ideas list in Deal Digest January 7, 2022

Ferro

FOE US

07/01/2022

21.8

Removed from best ideas list in Deal Digest January 7, 2022

IHS Markit

INFO US

07/01/2022

126

Removed from best ideas list in Deal Digest January 7, 2022

Ortho Clinical Diagnostics

OCDX US

07/01/2022

20.21

Despite the low-ball offer, target shareholder support seems to be secured as Carlyle irrevocably undertaken to vote in favour of the deal.

Verso

VRS US

07/01/2022

26.86

Deal risk is limited. We see a low probability of a counterbid and we do not recommend a position long VRS at current stage.

Mapletree North Asia Commercial Trust

MAGIC SP

06/01/2022

1.09

While there might be long term rationale in broadening MCT’s investment mandate, we see risks to shareholder approval on both sides

Terminix

TMX US

23/12/2021

44.01

We see risks to the deal given the lack of competition on the national level post-merger. The divestiture cap might not be sufficient and finding a viable buyer for divestitures might prove difficult.

Nobina

NOBINA SS

22/12/2021

106.1

The key risk appears to be the 90% minimum acceptance which can be waived, but as the bidder intends to delist Nobina, it might not be satisfied with a smaller acceptance rate. We note that the SEK 108 price represents a more than 20% premium to Nobina’s all-time high price.

Cerner

CERN US

22/12/2021

90.67

We expect the deal to receive approvals and close in late 1H2022 or early 2H2022.

Akka Technologies

AKA FP

17/12/2021

48.38

Removed from best ideas list in Deal Digest December 17, 2021

GCP Applied Technologies

GCP US

17/12/2021

31.82

The deal spread is tight. Given the several product overlaps, we expect extended antitrust reviews, especially in the US.

Soliton

SOLY US

15/12/2021

22.58

Removed from best ideas list in Best Ideas December 15, 2021

Intertrust NV

INTER NA

15/12/2021

19.62

We see no major issues regarding regulatory approvals, but the process will take time. One might, however go long Intertrust with a view of a wild-card offer from the party that has offered EU22 during the process.

Mimecast

MIME US

15/12/2021

79.46

Currently we see a superior offer as a wild card scenario however the spread and the low deal risk make us recommend a position long MIME on counterbid optionality.

Arena Pharmaceuticals

ARNA US

14/12/2021

91.6

We would not take a position at this time given the likely extended regulatory review and the significant downside. 

Z Energy

ZEL NZ

10/12/2021

3.49

Added to best ideas list in Deal Digest December 10, 2021

Intersect ENT

XENT US

10/12/2021

27.04

Added to best ideas list in Deal Digest December 10, 2021

Momentive Global

MNTV US

08/12/2021

21.6

The deal is likely to fail. Given our standalone estimations and current share price we recommend a position long ZEN however we would not, or not fully hedge with MNTV short given the counterbid probability.

True Corp

TRUE TB

07/12/2021

43.75

Despite the obvious antitrust issues, the deal might be approved after positive comments from Thai regulators.

Sportsman's Warehouse

SPWH US

03/12/2021

13.61

Removed from best ideas list in Deal Digest December 3, 2021

Aareal Bank

ARL GR

01/12/2021

28.96

The deal spread is tight. Given the shareholder opposition, one might speculate on a better offer, however, downside is significant in our view.

Distell

DGH SJ

01/12/2021

160.96

The deal spread appears to be somewhat wide however the lengthy deal review, potential shareholder opposition and antitrust hurdles (no clear visibility on divestiture commitments) makes us refrain recommending a position long Distell.

Vivo Energy

VVO LN

30/11/2021

131.6

We expect the deal to close in late 2Q or early 3Q.

Vonage

VG US

24/11/2021

20.655

The deal spread does not appear to be attractive.

Drilling Co of 1972

DRLCO DC

23/11/2021

261.2

We believe regulators will approve the deal given the fragmented nature of the offshore drilling industry. We expect shareholders to support the transaction as well.

Ferro

FOE US

19/11/2021

21.38

Added to best ideas list in Deal Digest November 19, 2021

Nuance Communications

NUAN US

19/11/2021

55.25

Added to best ideas list in Deal Digest November 19, 2021

Praemium

PPS AU

18/11/2021

1.53

We expect NWL to make an improved offer and see up to 20% upside, and and 15-20% downside in case no firm deal materializes.

McAfee

MCFE US

17/11/2021

25.59

There is a 45 day go-shop period. As deal risk and downside is limited we recommend a position long MCFE. However, we note that counterbid probability is low given the lack of strategic bidders and PE bidders facing leverage hurdles.

Afterpay

APT AU

12/11/2021

116.42

Removed from best ideas list in Deal Digest November 12, 2021

NeoPhotonics

NPTN US

11/11/2021

15.6

The deal spread appears to be tight given the long timeline. A counter bid appears less likely after both IIVI and MKSI made acquisitions over the year.

Rogers Corp

ROG US

11/11/2021

269.19

We expect an extended antitrust review given the complex nature of the overlapping products.

Daily Mail

DMGT LN

10/11/2021

1130

The deal spread of 7.6% appears to be wide given the limited downside around 1000p.

Ausnutria

1717 HK

09/11/2021

9.42

We believe that the deal will receive regulatory approvals, however there are risks to the new share issue which is a condition to the stake purchase and the mandatory offer.

RR Donnelley & Sons

RRD US

03/11/2021

9.11

We believe that Chatham’s improved proposal is likely to be superior. We cannot rule out multiple rounds of bids given the ample of upside based on our LBO calculation

PAE

PAE US

29/10/2021

9.91

We would not rule out a refiling requirement or a second request given parties are close competitors. Most peers have limited room to make an all cash counter bid.

Senex

SXY AU

29/10/2021

4.44

The possible upside on a firm deal announcement appears to be attractive

Playtech

Ptech LN

27/10/2021

6.74

We believe shareholders will approve the deal given the fair offer

Siltronic

WAF GY

25/21/2021

133.95

We continue to recommend a position long WAF on the tendered line, given that the downside is limited in a standalone case and any other scenario (end date extension with or without compensation, deal close before the end date) offers substantial upside.

Sportsman's Warehouse

SPWH US

22/10/2021

17.66

Added to best ideas list in Deal Digest October 22, 2021

Entra ASA

ENTRA NO

20/10/2021

210.2

We believe there is a good chance that sooner or later Castellum will make a move for Entra. 

Z Energy

ZEL NZ

20/10/2021

3.63

We believe that the deal will receive regulatory approvals, however there are risks to timing.

Neo Lithium

NLC CN

19/10/2021

6.26

The deal spread appears to be somewhat wide given the limited downside and a low probability of the deal being blocked. 

Sportsman's Warehouse

SPWH US

15/10/2021

17.75

Removed from best ideas list in Deal Digest October 15, 2021

Tronox

TROX US

12/10/2021

24.89

The possible upside on a firm deal announcement appears to be attractive.

Forterra

FRTA US

08/10/2021

23.74

Removed from best ideas list in Deal Digest October 8, 2021

Acceleron

XLRN US

08/10/2021

175.29

The deal spread appears to be somewhat wide. Although delays cannot completely be ruled out we see some upside optionality in a counterbid situation. One may consider a position long XLRN.

Blue Prism Group

PRSM LN

08/10/2021

11.33

Despite the low-ball offer and shareholder revolt, we see limited chance for a bump as the standalone prospect of the company seems not too bright.

Shaw Communications

SJR/B CN

06/10/2021

38.14

We believe that the deal will receive approval, however remedies might be required (behavioral and/or local divestitures to reduce BDU market share)

Kirkland Lake Gold

KL CN

01/10/2021

52.76

We don’t expect a counterbid, therefore we believe shareholders will vote in favour of the deal

Smartgroup

SIG AU

30/09/2021

9.5

The possible upside on a firm deal announcement appears to be attractive at the current market price.

Forterra

FRTA US

24/09/2021

23.51

Added to best ideas list in Deal Digest September 24, 2021

Stagecoach

SGC LN

24/09/2021

84.05

We see risk of a longer regulatory review and possible remedies in case a firm deal is agreed.

AusNet Services

AST AU

24/09/2021

2.55

The deal spread is tight. In case of a firm bid, we believe the key risk is the shareholder approval. However, regulatory scrutiny or antitrust concerns will pose a risk to the deal as well.

Itamar Medical

ITMR IT

24/09/2021

322.3

The deal spread appears to be somewhat wide but substantial downside makes us refrain from recommending a position long IMTR

Kadmon

KDMN US

17/09/2021

8.8

Given that Belumonsudil study data is expected before deal close and any issues around the product are not carved out of MAE and the risk of a longer timeline (second request or standard form letter form the FTC), we would not recommend any position at this stage.

Oil Search

OSH AU

16/09/2021

3.9

We believe the key risk is the possible regulatory scrutiny in Papua New Guinea. Santos and Oil Search will likely have to make serious commitments to PNG.

Afterpay

APT AU

15/09/2021

123.62

Added to best ideas list in APAC Best Ideas September 15, 2021

Neles

NELES FH

15/09/2021

12.545

Added to best ideas list in Euro Best Ideas September 15, 2021

Siltronic

WAF1 GY

15/09/2021

138

Added to best ideas list in Euro Best Ideas September 15, 2021

Cerved

CERV IM

10/09/2021

10.2

Added to best ideas list in Deal Digest September 10, 2021

Hill-Rom

HRC US

10/09/2021

151,68

The deal spread appears to be somewhat wide, however we note that the China review might take a while. A refiling for HSR approval cannot be ruled out; however a second request has a very limited chance in our view.

Swedish Orphan Biovitrum

SOBI SS

10/09/2021

242,1

Support from the board and anchor shareholders, the decent premium and recent regulatory setbacks decrease the likelihood of an upside scenario. However given the high acceptance condition, the lack of alternative transaction structures to get to 100% and comments from AP4 , a position long SOBI slightly above the offer price might be attractive in our view.

Ferro Corp

FOE US

08/09/2021

21.05

We believe regulators will approve the deal after a thorough review with a high possibility of remedies in some niche segments.

Enable Midstream Partners

ENBL US

03/09/2021

8.16

Added to best ideas list in Deal Digest September 3, 2021

Forterra

FRTA US

03/09/2021

23.69

Added to best ideas list in Deal Digest September 3, 2021

Shaw Communications

SJR/B CN

03/09/2021

37.25

Added to best ideas list in Deal Digest September 3, 2021

Akka Technologies

AKA FP

03/09/2021

47.2

Added to best ideas list in Deal Digest September 3, 2021

Translate Bio

TBIO US

03/09/2021

37.65

We don’t expect a second request, however the deal spread appears to be too tight at this point for a long TBIO. One might, however bet on an unlikely second request with a position short in the target going into the expiry of the HSR waiting period.

Five9

FIVN US

03/09/2021

167.5

At current stage we recommend a position long FIVN going into the shareholder vote, given the limited downside and some optionality for an improved offer.

Kansas City Southern

KSU US

01/09/2021

280.67

A long position KSU appears to be a safe bet until at least September 12 (the expiry of CP’s offer), at the current 2.7% spread.

Trillium Therapeutics

TRIL CN

31/08/2021

17.29

We see limited risk regarding antitrust scrutiny despite Pfizer’s overlapping development asset. Based on that, we would go long TRIL.

Maxim

MXIM US

27/08/2021

103.14

Removed from best ideas list in Deal Digest August 27, 2021

Soliton

SOLY US

27/08/2021

20.72

Added to best ideas list in Deal Digest August 27, 2021

Soliton

SOLY US

27/08/2021

20.72

We estimate limited downside of around $19.50 and a deal close in early 2022. The implied deal closing probability is approximately 40%. Based on that, we believe that the current spread of 8.3% is somewhat wide thus, we recommend a SOLY long.

Hella

HLE GR

23/08/2021

60.84

We believe there is no upside to the deal terms as there is no minimum acceptance and counterbid is unlikely. Given the complementary nature of the product portfolios, we don’t see antitrust issues.

Sportsman's Warehouse

SPWH US

20/08/2021

17.65

Added to best ideas list in Deal Digest August 20, 2021

Ultra Electronics

ULE LN

20/08/2021

3,372

Parties’ 1Q deal close expectation might be optimistic though as the Ultra deal might get more scrutiny compared to earlier acquisitions of UK defense companies

Sanderson Farms

SAFM US

16/08/2021

195.25

The deal spread is not attractive in our view given the long regulatory timeline.

Afterpay

APT AU

13/08/2021

132.01

We believe that shareholders will vote in favour of the merger as the deal rationale to merge appears to be strong.

Intersect Ent

XENT US

10/08/2021

27.83

We don’t see serious regulatory risks with regard to the transaction.

Inter Pipeline

IPL CN

06/08/2021

19.96

Removed from best ideas list in Deal Digest August 6, 2021

Meggitt

MGGT LN

06/08/2021

7.25

The deal spread appears to be somewhat wide, but the lengthy deal review makes us reluctant to enter a position long MGGT at this point.

Akka Technologies

AKA FP

29/07/2021

47.02

We expect no extended antitrust reviews and a deal timeline of around 10 months.

Veoneer

VNE US

27/07/2021

31.36

We attach low probability to a counter bid given VNE said it had been in discussion with other parties before the agreement with MGA.

PPD

PPD US

23/07/2021

46.16

Added to best ideas list in Deal Digest July 23, 2021

Slack Technologies

WORK US

23/07/2021

45.2

Removed from best ideas list in Deal Digest July 23, 2021

Sumo Group

SUMO LN

23/07/2021

4.99

We believe the key risk is the CFIUS approval. Regulatory scrutiny might emerge from the handling of American users’ data, however if needed, the US business can be divested in order to close the deal.

Five9

FIVN US

22/07/2021

189.80

The current spread does not compensate for the lengthy deal timeline.

Avast

AVST LN

20/07/2021

598.00

As per our valuation, a deal appears to be feasible even at around GBP6.50

Stamps.com

STMP US

16/07/2021

5,908

We would recommend a position long going into the go-shop period as a cheap bet on a counterbid. Based on our LBO valuation, we see room for a higher offer.

Willis Towers Watson

WLTW US

15/07/2021

221.91

Removed from best ideas list in Americas Best Ideas July 15, 2021

Cerved

CERV IM

15/07/2021

9.9

Added to best ideas list in Euro Best Ideas July 15, 2021

Alexion

ALXN US

15/07/2021

180.51

Removed from best ideas list in Euro/Americas Best Ideas July 15, 2021

Sydney Airport

SYD AU

15/07/2021

7.81

Given that standpoints on valuation appear to be far away and considering the substantial downside we do not recommend taking a position long SYD at current stage.

Neles

NELES FH

12/07/2021

13.49

We believe there is no upside to the deal terms. Given Valmet’s ~30% stake in Neles, counterbid is very unlikely.

WM Morrison

MRW LN

09/07/2021

266

We see limited upside for counterbidders up to 260p-270p. Based on that we do not recommend long MRW above 250p

Grandvision

GVNV NA

02/07/2021

28.25

Removed from best ideas list in Deal Digest July 2, 2021

UDG Healthcare

UDG LN

02/07/2021

1068

Removed from best ideas list in Deal Digest July 2, 2021

QAD

QADA

02/07/2021

86.44

We believe shareholders will vote in favour of the merger given the fair offer. A counter bid is unlikely as the Lopker family has a huge influence on the company and Pamela Lopker will retain a significant ownership interest after the deal and will continue to serve on the QAD Board.

Kindred Biosciences

KIN US

30/06/2021

9.16

We expect the deal to close in September 2021. An extended review appears to be unlikely.

Lydall

LDL US

29/06/2021

60.9

We believe an extended antitrust review is unlikely. Other than a few overlaps, the product portfolios can be seen complementary, in our view.

Grandvision

GVNV NA

25/06/2021

24.85

Added to best ideas list in Deal Digest June 25, 2021

WM Morrison

MRW LN

25/06/2021

234

We believe that probability of a firm deal and potential upside compensates the downside risk.

Raven Industries

RAVN US

25/06/2021

57.65

The deal spread does not appear to be attractive given the long deal timeline and possible vertical issues with the merger. Also, as per the merger call there was a competitive sale process before deal announcement.

Solarpack SA

SPK SM

21/06/2021

26.2

The deal spread is tight. Given EQT can waive the 75%+1 minimum acceptance and has 50%+1 by the irrevocable undertakings, we see no upside to the deal terms.

Willis Towers Watson

WLTW US

18/06/2021

225.2

Added to best ideas list in Deal Digest June 18, 2021

Deutsche Wohnen

DWNI GY

18/06/2021

51.48

Removed from best ideas list in Deal Digest June 18, 2021

Cloudera

CLDR US

18/06/2021

15.78

The deal spread and an improved bid opportunity favor a position long CLDR.

Altium

ALU AU

18/06/2021

34.71

Autodesk’s proposal shows their intention to expand their manufacturing software segment, which is highly competitive. Altium perfectly fits in Autodesk’s portfolio.
The key risk of the transaction is the board and shareholder support from Altium’s side. Based on the current announcements, they are open to sell the company, in case Autodesk offers an acceptable price. In our view Altium has to increase the offer, if they would like to proceed with the deal.

Magnachip Semiconductor

MX US

17/06/2021

24.07

We believe that the CFIUS interim order and a possible block might offer Korea the chance to avoid having to make a decision on this delicate deal.

UDG Healthcare

UDG LN

15/06/2021

1044

Added to best ideas list in Euro Best Ideas June 15, 2021

Deutsche Wohnen

DWNI GY

15/06/2021

51.8

Removed from best ideas list in Euro Best Ideas June 15, 2021

Great Canadian Gaming

GC CN

11/06/2021

44.65

Removed from best ideas list in Deal Digest June 11, 2021

Spire Healthcare

SPI LN

09/06/2021

2.45

Based on deal valuation and Mediclinic’s support (as long as there is no counter bid more than 10% higher than the current one) we believe that the deal will go through as it is.

Welbilt Update

WBT US

09/06/2021

24.34

We would not take a position as WBT is already trading above Ali’s proposal and a counterbid from MIDD might be limited to around $24-$26.

Grandvision

GVNV NA

04/06/2021

27.25

Removed from best ideas list in Deal Digest June 4, 2021

Inter Pipeline

IPL CN

04/06/2021

20.27

Brookfield’s proposal appears to be superior at this moment as it is worth more, has a significant cash component and could close imminently. We don’t expect that this is Pembina’s best offer. They probably expected Brookfield to improve their bid, so we see at least one more improvement from Pembina.

UDG Healthcare

UDG LN

03/06/2021

1058

We believe that the strong deal rationale favors an improved offer, thus we would recommend a position long UDG.

Recticel

REC BB

02/06/2021

14.66

We believe Greiner needs to improve its bid to reach the 50%+1 threshold. Antitrust concerns might arise around the combined market share in the EU. Therefore, a lengthy regulatory review might not be ruled out.

Alexion

ALXN US

28/05/2021

176.55

Added to best ideas list in Deal Digest May 28, 2021

Deutsche Wohnen

DWNI GY

28/05/2021

52.24

Added to best ideas list in Deal Digest May 28, 2021

IHS Markit

INFO US

28/05/2021

105.31

Added to best ideas list in Deal Digest May 28, 2021

Deutsche Wohnen

DWNI GY

28/05/2021

52.26

The deal spread appears to be favorable to take a position long DWNI.

Crown Resorts

CWN AU

28/05/2021

12.94

We would not take a position in CWN at this time due to its valuation and the ongoing regulatory processes.

Core-Mark

CORE US

26/05/2021

45.11

We don’t see nationwide issues and the divestiture cap is sizeable enough to tackle local issues if they arise.

Monmouth Real Estate

MNR US

25/05/2021

19

We believe shareholders will approve the deal if no superior offer emerges. Blackwells failed to make an improved offer in recent months and the board explored strategic alternatives, which appears to limit upside potential.

Welbilt

WBT US

25/05/2021

19.59

We would not take a position at this time given the long deal timeline and the risk of a counter bid for either party before the shareholder votes.

Klovern

KLOVB SS

21/05/2021

16.37

Removed from best ideas list in Deal Digest May 1, 2021

Enable Midstream Partners

ENBL US

19/05/2021

8.54

We don’t expect significant divestitures to be required by regulators. We expect the deal to close in 4Q2021.

PRA Health

PRAH US

17/05/2021

171.9

Removed from best ideas list in Americas Best Ideas May 17, 2021

Meggitt

MGGT LN

14/05/2021

480.4

We would not take a position as there has not been any official announcement about the approach. However, if the deal materializes, we believe regulatory risk is manageable.

KPN NV

KPN NA

13/05/2021

2.781

It appears that price is not the only concern and given the lack of willingness to sell both from KPN board/management and the Dutch government the probability of a firm deal is low. We would not recommend a position long KPN above its fair value.

IHH Healthcare

IHH MK

13/05/2021

5.45

N/A

At Home Group

HOME US

11/05/2021

36.3

We would not go long HOME as we see little upside based on our LBO calculations.

Tilt Renewables

TLT NZ

07/05/2021

8

Removed from best ideas list in Deal Digest May 7, 2021

Equiniti Group

EQN LN

06/05/2021

1.74

We believe there is a good chance for a firm deal. Based on our LBO model we see upside to the deal price.

Intouch Holdings

INTUCH TB

04/05/2021

63.75

We would not take a position at this point as we see limited upside potential

Cerved

CERV IM

04/05/2021

9.7

We recommend a position long CERV close to the ION offer price as cheap option for a bump to the offer.

 

 

 

 

 

Please note that every week Chain Bridge publishes a list of their top ideas (Deal Digest).  As noted in the table above, companies are added or removed to that list to communicate conviction level.

 

All materials published by Chain Bridge Research, f/k/a Independent European Research, LLC, are intended for use only by professional, institutional, buy-side investors. Use by the general investing public is prohibited. The information and analysis contained in these publications are copyrighted and may not be duplicated or redistributed for any reason. Chain Bridge Research reserves the right to refuse any subscription request based upon the above criteria. Companies and individuals residing in Hungary, and affiliates of firms based in Hungary are prohibited from subscribing to the services of Chain Bridge Research.

Neither the information, nor any opinion expressed, in a Chain Bridge report constitutes a solicitation by Chain Bridge for the purchase or the sale of securities. Chain Bridge reports do not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. The information set forth in the reports was obtained from publicly available sources that we believe to be reliable. While due care is taken by Chain Bridge in compiling the data and in forming its opinions, Chain Bridge gives no warranty, express or implied, and it does not guarantee the accuracy or completeness of the information provided.

The reports published by Chain Bridge intend to provide professional, institutional, buy-side investors with a view regarding the various risks and critical factors impacting the completion of certain mergers and acquisitions. Therefore, the opinions expressed do not fit with traditional buy, sell, and hold ratings.