Welcome to The Special Situation Report! A free weekly newsletter covering the latest in mergers and acquisitions, activist campaigns and the takeover rumor mill.

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Overview of Announced M&A Transactions

Chesapeake Energy (CHK) announces acquisition of Chief E&D Holdings; sale of Powder River Basin assets to Continental Resources (CLR) [Press Release, Investor Presentation] | Sector: Energy

Biogen (BIIB) announces sale of Bioepis Stake to Samsung Biologics (207940.KS) for $2.3bn [Biogen Press Release, Samsung Biologics Press Release] | Sector: Pharmaceuticals

Accell Group (ACCEL.AS) to be acquired by KKR for $1.8bn [Press Release, Reuters] | Sector: Consumer

Enerflex (EFX.TO) announces merger with Exterran (EXTN) in all-stock transaction; implied combined enterprise value of $1.5bn [Press Release, Investor Presentation, Webcast] | Sector: Energy

UBS Group (UBS) announces acquisition of Wealthfront for $1.4bn [Press Release] | Sector: Financials

Others

• Swedencare (SECARE.ST) announces the acquisitions of NaturVet and Innovet for ~$500MM [Investor Presentation, Video] | Sector: Healthcare (Pet)

• IHS Towers (IHS) expands Brazilian operations with $315mm acquisition [Press Release, Investor Presentation] | Sector: Telecommunications

• ConvaTec Group (CTEC.L) announces acquisition of Triad Life Sciences for $125mm [Press Release] | Sector: Healthcare

• Wheels Up (UP) announces acquisition of Air Partner (AIR.L) for $107mm [Press Release] | Sector: Industrials (Transportation)

• Cazoo (CZOO) announces acquisition of brumbrum for $90mm [Press Release] | Sector: Retail / Industrials (Transportation)

• CBM Bancorp (CBMB) announces sale to Rosedale Federal for $64mm [Press Release] | Sector: Financials (Banking)

• Victoria’s Secret (VSCO) sells stake in China business to Regina Miracle (2199.HK) for $45mm [Press Release] | Sector: Retail

• The National Security Group (NSEC) announces sale to VR Holdings for $41mm [Press Release] | Sector: Financials (Insurance)

• J.P. Morgan (JPM) to acquire a stake in Viva Wallet [Press Release, Reuters] | Sector: Financials

• SAP (SAP) announces acquisition of Taulia [Press Release] | Sector: Technology (Software)

• BJ’s Wholesale (BJ) to bring end-to-end perishable supply chain in-house with acquisition [Press Release] | Sector: Retail / Industrials (Transportation)

• WeWork (WE) announces acquisition of Common Desk [Press Release] | Sector: Real Estate

• Utz Brands (UTZ) expands New York delivery capabilities with two acquisitions [Press Release] | Sector: Consumer

• NEC Corp (6701.T) announces acquisition of Blue Danube Systems [Press Release] | Sector: Technology / Telecommunications

Developments in Shareholder Activism

Quick hitters:

• We previously noted that Trian was building a stake in Unilever (UL). Per the New York Post, changes are already being made (Article)

• Maguire Investment delivers open letter to shareholders of Yatra Online (YTRA) criticizing governance and performance (Press Release)

• Previously rebuked, Alden nominates its own candidates to the board of Lee Enterprises (LEE) (Press Release, Letter)

• Catalyst Biosciences (CBIO) receives a letter from Julian Singer urging Board and governance changes (Filing)

• Hedge fund Driver Management delivers another letter to Codorus Valley Bancorp (CVLY) after previously pushing a sale

• Edenbrook Capital increased its position in ServiceSource (SREV) to 21% (Filing)

• VOSS Capital continues to tango with Griffon Corp. (GFF)

Peloton’s (PTON) recent poor performance has awoken an activist:

Takeover Tango @InvestedComms

$PTON activist Blackwells Capital suggests a sale and management shakeup. Suggested buyers: $AAPL, $NKE. Very low probability of a deal happening at these levels. Stock would need to season for a year+ before the Board considered selling. Activist investor Blackwells calls on Peloton to fire CEO, explore saleActivist Blackwells Capital is pushing Peloton to fire its chief executive officer and consider a sale as its share price has plummeted.cnbc.com

January 24th 2022

The Takeover Rumor Mill

Quick hitters:

• Ecovyst (ECVT) is working with Goldman Sachs (GS) to explore a sale, Dealreporter says (The Fly)

• Centene (CNC) fielded potential takeover interest from Cigna (CI) in recent months (Bloomberg)

• Lionsgate (LGF-A) exploring a deal for STX Entertainment (Variety)

• Some Playtech (PTEC.L) investors support Aristocrat (ALL.AX) takeover, JPMorgan (JPM) forecasts deal collapse (Article)

• Walgreens (WBA) is said to kick off Boots sale as Sycamore joins fray (Bloomberg)

• Icahn acts to remove regulatory roadblocks in Southwest Gas (SWX) offer (Bloomberg)

• Kering (KER.PA) is shedding its watch division – could it finally be time for a tie-up with Richemont (CFR.SW)?

• Shipper MSC wants lead role in deal for ITA Airways (Reuters)

• Tencent (0700.HK) plans to take DouYu (DOYU) private, sources say (Reuters)

• Rumblings on Robinhood (HOOD) percolate after recent poor performance

Bally’s received an unsolicited proposal from Standard General:

As you know, Standard General is the largest stockholder of Bally’s with an equity interest representing more than 20% of the outstanding shares. As a result of our long-term involvement with the Company and its predecessor, we have a detailed understanding of Bally’s, its business and assets, which will enable us to move quickly to finalize a transaction. We intend to fund the transaction through sale and lease back and other long-term financing arrangements.

Here is more on the proposed takeover via CNBC: Bally’s chairman on proposed takeover.

Last week we discussed Kohl’s (KSS) and the involvement of Macellum Advisors and Starboard Value. Subsequently Sycamore Partners emerged as an interested party:

Takeover Tango @InvestedComms

$KSS Kohl's fields an offer from retail-focused PE shop Sycamore Partners (previously: Staples, Belk). Head Stefan Kaluzny is a shrewd retail operator. Good chance a deal gets done here and + I think Sycamore has a few extra $ per share in their pocket Kohl’s shares surge on takeover interest from Sycamore, AcaciaKohl’s Corp shares soared 36% on Monday after a Reuters report that private equity firm Sycamore Partners had approached the department store chain with a potential takeover offer of $9 billion.reuters.com

January 24th 2022

The discussion continues on gaming M&A:

Takeover Tango @InvestedComms

$SONY deal for $EA would be too big a bite to handle, IMO ( $MSFT is 20x the size of Sony). Game development will not be winner take all. If Sony doubles down on ecosystem quality (user experience + developer experience), they will remain competitive in console w/ no acquisition https://t.co/aKKExUM8m8

Hunter 🎮 @NextGenPlayer

Sony’s favorite acquisition target is likely EA, says analysts. PlayStation could also be looking to buy Ubisoft or Take-Two 👀🔥 https://t.co/NjXFNGvmaJ https://t.co/wZAhYB0RCF

January 31st 2022

That’s all for this week - we will be back next Sunday. As mentioned from the jump, please sign up. Feedback is welcome in the comments, or on Twitter @InvestedComms.