The Special Situation Report #10: 3/27 Roundup

Summary of the Week in Special Situations

David Paolella

Mar 27, 2022

Welcome back to the Sunday edition of The Special Situation Report – your weekly update on event-driven investing opportunities. If you haven’t already, check out my latest Report on the Pearson / Apollo takeover situation. I hope to see you again next week; same time, same place.

Update on Developing M&A

HomeServe (LSE: HSV) surged as Brookfield Infrastructure (BIP) announced its considering a possible takeover offer (Press Release)
Kohl’s (KSS) continues to engage with select bidders (Press Release) with Hudson’s Bay the purported front runner (NY Post); Macellum continues proxy battle (Filing)
Nielsen (NLSN) rejected a $25.40 / share takeover offer and plans to commence share buyback (Press Release); Elliott and Brookfield Asset Management (BAM) are weighing an increased offer (Bloomberg)
Paramount Group (PGRE) rejected Monarch Alternative Capital’s $12 / share takeover proposal (Press Release)
Southwest Gas (SWX) investor Carl Icahn extended his tender offer deadline and removed the regulatory approval condition on the offer (Filing)
Switch (SWCH) has hired advisors and is reportedly considering a sale (Bloomberg)
Turtle Beach (HEAR) activist Donerail Group nominated a full slate of candidates in the proxy contest (Filing); Citron Research says a takeover is imminent (Twitter)
Xerox (XRX) deal speculation heightened as Chairman, Director step down (Press Release); Carl Icahn owns 17% and previously backed takeover of HP (HPQ)

Update on Shareholder Activism

Atento (ATTO) activist Kyma Capital issued a letter calling on the company to immediately explore strategic alternatives with the goal of selling the company (Filing)
Bed Bath & Beyond (BBBY) announced a cooperation agreement with Ryan Cohen; Company to add three new Directors to the Board and explore alternatives for buybuy BABY (Filing)
Constellation Energy (CEG) gained as Corvex Management disclosed ownership stake (Seeking Alpha)
GMS (GMS) 13D filer Coliseum Capital raised its stake to 12.8% (Filing)
Huntsman (HUN) defeated Starboard’s board challenge (Reuters)
Lazydays (LAZY) shareholder Kanen Wealth Management called for the Company to further evaluate M&A proposals (Press Release)
Republic First Bancorp (FRBK) beneficial owner George Norcross sent a letter to the Board expressing concern with the lack of dialogue (Filing)
Trecora Resources (TREC) activist Ortelius Advisors issued an open letter in proxy letter, calling for new directors and exploration of alternatives (Letter, Response)
Verisk Analytics (VRSK) provided an update on strategic review and planned separation of Energy business, with input from D.E. Shaw (Press Release)

Update on Other Special Situations

Alibaba (BABA) and Xiaomi (XIACY) announced massive buybacks; Tencent (TCEHY) may be next (Yahoo! Finance)
Change Healthcare (CHNG) may announce a buyer for its ClaimsXten business as soon as next week (Seeking Alpha)
Gulfport Energy (GPOR) has discussed a merger with Ascent Resources (Bloomberg)
Prologis (PLD) said to bid more than $23bn for Blackstone’s (BX) Mileway logistics warehouse company (Reuters)
Telecom Italia (MIL: TLIT) evaluates alternatives as KKR (KKR) confirmed interest; CVC and other PE firms are potentially interested as well (Reuters)
Toshiba (TOSYY) shareholders rejected both a plan to break up the conglomerate (from management) and a plan to solicit takeover bids (from activists) (Reuters, Reactions)
XPO Logistics (XPO) announced the divestiture of their North American intermodal business to STG Logistics for $710mm (Press Release)

Announced M&A

Target / Acquirer – Transaction Enterprise Value

Consumer / Retail

Columbia Care (CCHWF) / Cresco Labs (CRLBF) – $2bn (Press Release, Presentation)
Glacier Raft Company / Viad Corp (VVI) (Press Release)

Financials

Alleghany (Y) / Berkshire Hathaway (BRK.A) – $11.6bn (Press Release)
Emclaire Financial (EMCF) / Farmers National (FMNB) – $105mm (Press Release)

Gaming, Gambling, Lodging & Real Estate

Hibernia REIT (LSE: HBRN) / Brookfield Asset Management (BAM) – $1.2bn (Press Release)

Industrials

Huttig Building Products (HBP) / Woodgrain – $350mm (Press Release)

Technology, Media & Telecommunications

Anaplan (PLAN) / Thoma Bravo – $10.7bn (Press Release)
ArcaMax / Zeta Global (ZETA) (Press Release)
Knowmadics / WaveDancer (WAVD) – $90mm (Press Release)
The Wild / Autodesk (ADSK) (Press Release)

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