Yahoo Finance Apollo-The Fresh Market Transaction: What Are the Conditions?
Apollo Buys The Fresh Market in a Go-Private Transaction
Basics of the transaction
As we saw in the first part of this series, Apollo (APO) is buying The Fresh Market (TFM) in a cash tender offer worth $28.50 per share. The equity value is $1.3 billion.
The companies are guiding for a close in 2H16. As a general rule, tender offers are usually completed in 45 days or so—compared to the typical three or four-month timeline for a merger with a shareholder vote. Given the 21-day go-shop period, the best guess for a closing date will be mid to late May.
Conditions
The following conditions need to be satisfied for the merger to close:
minimum tender of 50%
Apollo’s filing of a premerger notification report to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976
any other regulatory approvals
Go-shop provision and breakup fees
The Fresh Market has a go-shop provision. It allows the company to solicit other bids for the first 21 days. After this period, it will be held to the customary no-shop provision with a fiduciary out. Given that The Fresh Market already ran an examination of strategic alternatives and also has a go-shop provision, it isn’t likely that any other bidder will come in after the go-shop period expires.
Other merger arbitrage resources
Other important merger spreads include the Cigna (CI)-Anthem (ANTM) deal. It’s slated to close in 2H16. The Apollo-ADT (ADT) merger is another important deal. For a primer on risk arbitrage investing, read Merger arbitrage must-knows: A key guide for investors.
Investors who are interested in trading in the retail sector should look at the S&P SPDR Retail ETF (XRT).
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