By Sarina Isaacs
Investing.com - Here are the hottest pieces of M&A news from the past week, as covered on InvestingPro+, amid spiking merger activity.
Adobe (NASDAQ:ADBE) announced it has inked a $20 billion cash-and-stock deal to buy Figma, a design platform, triggering a nearly 20% selloff in the shares over Thursday and Friday trading. Analysts foresee regulatory risks to the closing of the deal.
Vital Knowledge analysts see this move as evidence that Adobe is spending a lot of money to expand its annual recurring revenue, which now stands at only 3% of the overall revenue.
“Given that Figma is one of the more potent competitors facing Adobe, it will be interesting to see how regulators approach this deal,” analysts wrote.
Twitter (NYSE:TWTR) shareholders have approved Elon Musk's $44 billion takeover.
Store Capital (NYSE:STOR), a real estate investment trust headquartered in Arizona, is being taken private by GIC and funds managed by Oak Street in a deal valued at $14 billion. The deal is based on the price of $32.35 per share, which is a premium of 20% compared to STOR’s closing price on Wednesday. The involved sides expected the deal to close in Q1 2023.
The Justice Department is poised to block Sweden's Assa Abloy (OTC:ASAZY) from acquiring Spectrum Brands (NYSE:SPB), according to sources cited by Bloomberg. The deal would combine two of the three leading providers of residential door hardware, the DOJ will allege.
In light of Costar Group raising money for an acquisition, a Stephens analyst told Investing.com in an exclusive interview that Zillow would be a home run acquisition for the real-estate technology company. The analyst said that he sees four routes the company could go to build the residential side of its business.
First, it could target traffic scale, second, it could target content, next it could target cross-sell services, and finally, it could target software/services. The potential targets from those routes would be Realtor.com, Zillow, or Redfin (NASDAQ:RDFN) in the traffic segment; Nextdoor in the content segment; Porch in the cross-sell services sector, with Pacaso as a second option; and BlackKnight in the software category. BlackKnight has agreed to a deal with Intercontinental Exchange (NYSE:ICE), but as seen below, the spread on the deal remains wide.
And fresh produce giant Fresh Del Monte has picked up takeover interest from a second potential private equity buyer, according to a source cited by StreetInsider. The development follows reports from Bloomberg in July that Miami-based private equity firm I Squared Capital is evaluating an expanded partnership that could include a full takeover. The second private equity firm was not identified given the sensitivity of the matter. In addition to the new potential bidder, I Squared Capital continues to work with bankers on evaluating a takeover, the source added.
Top Merger Arbitrage Spreads
The volatile market environment continues to be reflected in merger arbitrage spreads, with several double-digit spreads out there.
Silicon Motion (NASDAQ:SIMO) tops out the list with a 52.9% spread, up quite a bit from its 30% average spread since MaxLinear (NYSE:MXL) agreed to acquire it in May:
Source: StreetInsider
Rounding out the list are Twitter, Terminix (NYSE:TMX), VMware (NYSE:VMW), Activision Blizzard (NASDAQ:ATVI), Black Knight (NYSE:BKI), Tower Semiconductor (NASDAQ:TSEM), TEGNA (NYSE:TGNA), First Horizon (NYSE:FHN), and South Jersey Industries (NYSE:SJI).
Source: StreetInsider
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