Merck KGaA Takes Out Millipore

Who would have thought that Merck KGaA, the German pharma and chemicals company, would be the winning bidder for Millipore (Ticker: MIL)? I sure didn’t… Everyone on this planet thought that Thermo Fisher (Ticker: TMO) would be the winning bidder. Bloomberg is reporting the following: “Feb. 28 (Bloomberg) -- Merck KGaA said it has entered a definitive agreement to buy all the outstanding shares in Millipore Corp. for $107 a share in cash, valuing the deal at about $7.2 billion.” So I’m looking at a nice 18.98% gain in my Millipore position. It’s a relatively small position, but I’m not complaining at all…

IMS Health = Done Deal?

I may be jumping the gun here, but it looks like IMS Health (Ticker: RX) is a “Done Deal”. The stock appears to be halted pending news. This was a nice risk arb play with a net gain of 7.63% over a 3 month period (~ 30% annualized rate of return). I re-entered into IMS Health after the rediculous sell off in December. No complaints... Here are the trades:

12/11/09 1.0X @ $19.90
12/17/09 0.1X @ $20.58
12/18/09 0.2X @ $20.46
12/18/09 1.2X @ $20.49
12/22/09 0.6X @ $20.93
01/04/10 0.1X @ $21.03
01/05/10 0.2X @ $21.00

Edit:

It's official now... IMS Health=DONE DEAL

IMS Health Acquired By Affiliates Of TPG, CPP Investment Bd Last update: 2/26/2010 11:29:54 AM (MORE TO FOLLOW) Dow Jones Newswires (212-416-2400) February 26, 2010 11:29ET (16:29 GMT)

A Little Bit of Millipore

I’ve started to deploy some cash from the expected closure of IMS Health (Ticker: RX). Yesterday, I picked up some Millipore Corp. (Ticker: MIL) at $89.93. When you see a stock pop like that with huge volume, something is up. Today, Millipore issued a press release stating that they are “evaluating strategic alternatives.” This means the company is up for sale with Thermo Fisher (Ticker: TMO) and GE (Ticker: GE) the likely acquirers. I didn’t expect this much M&A action so early in the year, but I’ll take it…

IMS Health Closing Soooon

Well, Well... IMS Health (Ticker: RX) finally issued a press release (click: here) Friday night stating that they intend to close the merger with the private equity firms (TPG Capital and CPP Investment Board) by the end of February. So far the new year is starting out well with the closing of Sun Microsystems and now IMS Health.

Some Skill Soft and More 3Com

I initiated a position in Skill Soft Plc (Ticker: SKIL) today at $11.08 per share. This company has agreed to be purchased by a bunch of private-equity firms (Bain Capital, Berkshire Partners and Advent International) for $10.80 in cash. Hmm… What’s wrong with the math? I just paid $11.08 and they are offering $10.80!? The market is clearly saying that this company is worth much more than $10.80 per share and a higher bid is expected. These private equity firms are stealing this company from the shareholders. There’s no way this deal goes through at $10.80. Looking for a new bid in the $12.50 - $13 range or else no deal!

Oh, I also added to my 3Com (Ticker: COMS) position at $7.59 per share. I’m still looking at a ~ 20% annualized return with an end of April close. By the way… When are they going to close the IMS Health (Ticker: RX) deal??? Still waiting...

Icahn vs Genzyme

There’s no doubt in my mind now that Carl Icahn is going to wage a proxy fight against Genzyme (Ticker: GENZ). On CNBC today, Carl Icahn was asked about his 4.8 million share stake in Genzyme and he responded: “I wouldn’t be surprised if you see some action from us on it." That’s as clear as an answer you will get from him.

Note: I have a position in Genzyme.

The Whales Have Filed (13F-HR)

The three big whales, which I follow have posted their 13F-HR filings with the SEC. Here is John Paulson’s (click: here), Carl Icahn’s (click: here) and Ralph Whitworth’s (click: here). I follow John Paulson to check out his arb holdings. The only holding that caught my eye is his position in 3Com Corp. (Ticker: COMS). I’m considering increasing my holding in 3Com, but we’ll see. Now moving onto the activist investors: Icahn and Whitworth… They both backed up the truck in Genzyme Corp. (Ticker: GENZ). The big question is whether Icahn will put Genzyme into play with a proxy fight. It’s starting to look like a proxy fight is brewing with his ~ 4.8 million share stake in the company. Whitworth not to be outdone by Icahn increased his stake in the company to ~10.5 million shares from 6.9 million shares. This is some serious $$$. Genzyme reports tomorrow morning… I’m sure the whales will be listening in with their wallets.

Money Turtle Pic

Quiet Week

Last week was a busy week for M&A, but this week is very quiet. Well, there is a small bit of news regarding 3Com (Ticker: COMS). Today, the EU Competition approved HP’s (Ticker: HWP) purchase of 3Com, which was expected. Everyone is of course waiting for the ok from China’s Ministry of Commerce. This is expected by the end of April.

On my front, no trades this week at all, which was not by choice. I’ve decided to close my full service account with Merrill Lynch and consolidate it with my other stuff at TD Ameritrade. My account is currently frozen during the transfer process. Since I make all of my decisions, it didn’t make sense to pay the additional fees associated with a full service. The broker was actually pretty good, he didn’t try to sell me anything and in fact he was able to get me a full IPO allotment of VISA (Ticker: V). I thanked him for that by doing a bit of biz with him, but now it's time to move on.

So I still have small risk arb positions in IMS Health (Ticker: RX) (should close any day now), 3Com (end of April close?), Hardinge (Ticker: HDNG) (hostile take over play – looking at a higher bid), Air Gas (Ticker: ARG) (another very hostile take over play) and Archon ST (Ticker: STST) (selling itself to the highest bidder).

Hardinge and Air Gas

It’s been an interesting week for M&A activity despite the big sell off in the market. The first deal that comes to mind is Hardinge, Inc. (Ticker: HDNG), which is fighting a hostile takeover from Industrias Romi, a Brazilian toolmaker. Industrias Romi made an unsolicited bid of $8.00 in cash for Hardinge, Inc and the stock is currently trading above the bid price. I picked up a few shares of Hardinge, Inc at $8.09. I’m expecting a higher bid from Industrias Romi.

Another similar hostile takeover scenario taking place is with Air Gas (Ticker: ARG). Today Air Products (Ticker: AIR) made an unsolicited bid of $60 in cash for Air Gas. Air Gas is also trading above the $60 bid price. Guess what? I also bought a few shares of Air Gas at $60.38. It’s going to be interesting to see how this plays out...

Closing Soon For IMS Health?

It looks like we’re down to the wire in the closing of IMS Health (Ticker: RX), which is being acquired for $22 in cash. The EU Competition Commission gave their approval yesterday. The only step remaining is the shareholder vote scheduled for Monday, February 8th. In theory this deal could close 2 days after the shareholder vote and I believe the market is pricing in a February closing. The stock closed today at $21.78 (+0.13 in a big down market day). The spread is now only 1%, which is way too narrow for an end of March close. So, it's looking good...