June 19, 2017 – Stock Market Research, Option Picks, Stock Picks,Financial News,Option Research

June 19, 2017

GrubHub Could be next Amazon target

The hypothetical merger would be a “nice complement” to the Whole Foods purchase

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Research firm #Wedbush hypothetized Monday that #Amazon (AMZN) could look to acquire food delivery company GrubHub (GRUB) following its Whole Foods (WFM) deal.

GrubHub Inc. provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company connects approximately 50,000 local restaurants with diners in approximately 1,100 cities.

POSSIBLE AMAZON TARGET

In an investor note Monday, Wedbush’s Aaron #Turner argued that #GrubHub “may be” Amazon’s next acquisition target after Whole Foods.

The ecommerce leader already tried an internally-developed delivery platform but achieved “minimal success.” Meanwhile, GrubHub has continued to successfully expand into new markets and an acquisition would allow Amazon to dominate food delivery, Turner argues.

The hypothetical merger would be a “nice complement” to the Whole Foods buy given their similar geographic and demographic overlap, the analyst contends, adding that Amazon could unlock synergies between GrubHub’s infrastructure and, for example, its own grocery delivery push.

Turner also believes it’s “not insignificant” that GrubHub is already fully integrated with Amazon’s #Echo device, arguing that that relationship could help “grease the pan” for a potential takeover.

Assuming a similar premium to Whole Foods, the analyst calls a deal price around $55 per share “well within the realm of possibility.” Turner reiterates an Outperform rating and $50 target on GrubHub.

PRICE ACTION:

Shares of GrubHub are up 5.3% to $45.62 in afternoon trading.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

June 19, 2017

Tegna to sell 85% of CareerBuilder to Apollo Global for $250 million

Apollo Global Management to buy CareerBuilder from Tegna

TEGNA (TGNA) announced it has entered into a definitive agreement, together with the other owners of CareerBuilder to sell CareerBuilder to an investor group led by investments funds managed by affiliates of Apollo Global Management, LLC (APO) and the Ontario Teachers’ Pension Plan Board.

TEGNA’s estimated cash proceeds from the sale are expected to be approximately $250M, which will be used to retire existing debt and for other general corporate purposes.

As part of the agreement, TEGNA will remain an ongoing partner in CareerBuilder, reducing its current 53% controlling interest to 12.5% on a fully-diluted basis once the proposed transaction is complete.

As a result, CareerBuilder will no longer be consolidated within TEGNA’s reported operating results and will instead be reflected as an equity investment within TEGNA’s financial statements.

Earlier this years, TEGNA sold Cars.com in an IPO. The parent of USA Today, previously known as Gannett is spinning off parts of its operation to pay down debt.

The proposed transaction is subject to receipt of customary regulatory approvals and satisfaction of other conditions and is expected to close in the third quarter of 2017.

TEGNA was advised by Morgan Stanley on the proposed transaction and was also assisted by Greenhill & Co. Wachtell, Lipton, Rosen & Katz acted as legal advisor.

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June 19, 2017

Novadaq sold for $701 million

Stryker to buy Novadaq for $701M

The transaction will be carried out by way of a court approved plan of arrangement under the Canada Business Corporations Act

PKI to buy NVDQ on Stockwinners blog

#Novadaq Technologies (NVDQ) announced that it has entered into a definitive arrangement with Stryker (SYK) pursuant to which Stryker has agreed to acquire all of the issued and outstanding shares of Novadaq for $11.75 per share in cash, implying a total equity value of approximately $701M.

Novadaq Technologies Inc. develops, manufactures, and markets fluorescence imaging products for use by surgeons in the operating room and other clinical settings in the United States and internationally. The company offers SPY Elite, a fluorescence imaging system that enables surgeons performing open procedures, such as breast and other reconstruction, gastrointestinal, and cardiothoracic surgery, to visualize microvascular blood flow and perfusion in tissue intraoperatively. It also provides PINPOINT endoscopic fluorescence imaging systems; LUNA fluorescence angiography system that provides clinicians with real-time visualization of tissue perfusion in patients.

Stryker Corporation (SYK) operates as a medical technology company.

The transaction will be carried out by way of a court approved plan of arrangement under the Canada Business Corporations Act and will require the approval of, among others, the holders of at least 66 2/3% of the Novadaq Shares present in person or represented by proxy at a special meeting of Novadaq shareholders to be called to consider the Arrangement.

The Special Meeting is expected to be held on or about August 4.

Novadaq’s board and the Special Committee have also received a fairness opinion from each of Piper Jaffray and Perella Weinberg Partners in connection with the Arrangement to the effect that, as of the date of such opinions, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Novadaq’s shareholders pursuant to the Arrangement is fair from a financial point of view.

In addition to shareholder and court approvals, the Arrangement is subject to applicable regulatory approvals, including Canadian Competition Act and U.S. Hart-Scott-Rodino approvals, and the satisfaction of certain other closing conditions customary in transactions of this nature. The transaction is not subject to a financing condition.

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June 19, 2017

PerkinElmer to buy EUROIMMUN for $1.3B in cash

PerkinElmer to buy Germany’s EuroImmun for $1.3B in cash

PerkinElmer reaffirms its 2017 revenue and EPS guidance

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PerkinElmer (PKI) announced that it has entered into a definitive agreement to acquire EUROIMMUN Medical Laboratory Diagnostics AG. The agreement provides that PerkinElmer will acquire up to a 100% stake in EUROIMMUN.

The total purchase price of the transaction based on all outstanding shares being acquired will be approximately $1.3B in cash.

EUROIMMUN is based in Lubeck, Germany, with approximately 2,400 employees. The company has extensive expertise and capabilities across immunology, cell biology, histology, biochemistry and molecular biology.

EUROIMMUN is expected to generate approximately $310M in revenue this year, and over the last five years, the company has averaged revenue growth of 19%.

In 2016, the company generated sales in more than 130 countries worldwide, with approximately 45% of revenues in China, 30% in Europe, Middle East & Africa, 5% in the Americas and 20% in Rest of World.

The transaction is subject to customary closing conditions and is currently anticipated to close in the fourth quarter of 2017 following the receipt of required standard regulatory approvals. The acquisition is expected to be accretive to PerkinElmer’s 2018 non-GAAP EPS results by approximately 28c-30c. Additionally, PerkinElmer is reaffirming its 2017 revenue and EPS guidance.

PerkinElmer is reaffirming its 2017 revenue and EPS guidance following the announcement of the EUROIMMUN acquisition.

PerkinElmer, Inc. provides products, services, and solutions to the diagnostics, research, environmental, industrial, food, and laboratory services markets worldwide. The company operates through two segments, Discovery and Analytical Solutions and Diagnostics.

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June 19, 2017June 19, 2017

Clovis Oncology reports positive ovarian cancer results, Shares Soars

Clovis Oncology announced topline data from the confirmatory phase 3 #ARIEL3 trial of rucaparib, which successfully achieved the primary endpoint for Ovarian Cancer.

Shares of competitor Tesaro (TSRO) tumble on the news

CLVS to submit NDA to FDA Shares of Clovis Oncology (CLVS) are surging after the company this morning announced topline data from the confirmatory phase 3 ARIEL3 trial of rucaparib, which successfully achieved the primary endpoint of improved progression-free survival, or PFS, by investigator review in each of the three populations studied.

Clovis Oncology (CLVS) announced topline data from the confirmatory phase 3 #ARIEL3 trial of rucaparib, which successfully achieved the primary endpoint of improved progression-free survival, or #PFS, by investigator review in each of the three populations studied. PFS was also improved in the rucaparib group compared with placebo by blinded independent central review, or #BICR, a key secondary endpoint.

Based on these findings, the company plans to submit a supplemental New Drug Application, or sNDA, within the next four months for a second-line and later maintenance treatment indication for all women with platinum-sensitive ovarian cancer who have responded to their most recent platinum therapy. #NDA

“We are very pleased with these positive #ARIEL3 topline results that strongly demonstrate the potential of rucaparib to help women with platinum-sensitive, advanced ovarian cancer,” said Patrick Mahaffy, President and CEO of Clovis Oncology.

“These results reinforce the potentially foundational role of #rucaparib in the management of advanced ovarian cancer, as demonstrated by both investigator review and the blinded independent central review. Most importantly, we are grateful to the patients, caregivers and investigators who participated in this study. We look forward to sharing these data in greater detail at a medical meeting later this year and submitting our sNDA as rapidly as possible, with the ultimate goal of making rucaparib available to more women battling ovarian cancer.”

Possible $40 Gain

Janney Capital’s analyst Debjit #Chattopadhyay previewed some potential outcomes for the release of topline data from Clovis’ (CLVS) ARIEL3 trial, which is expected over the next two weeks. If Hazard Ratios in g+sBRCA patients are in below 0.3, he sees Clovis shares potentially trading up to $85-$100 per share, which, at the high end, would be about $40 above Clovis’ Friday closing price of $60.

In such a scenario, he thinks competitor Tesaro (TSRO) sliding to $80-$90. With HRs in the range of 0.3-0.35, which he gives a 70% probability of occurring, he sees Clovis trading at $75-$85 and Tesaro falling to $90-$100. Tesaro has a competing drug for ovarian cancer.

PRICE ACTION

In pre-market trading on Monday, CLVS is up $26 to $86.00 in heavy trading. TSRO is down $16 to $128.

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June 19, 2017

Rice Energy Sold for $6.7B

EQT will acquire all of the outstanding shares of Rice common stock for total consideration of approximately $6.7B – consisting of 0.37 shares of EQT common stock and $5.30 in cash

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EQT Corporation (EQT) and Rice Energy (RICE) announce that they have entered into a definitive merger agreement under which EQT will acquire all of the outstanding shares of Rice common stock for total consideration of approximately $6.7B – consisting of 0.37 shares of EQT common stock and $5.30 in cash per share of Rice common stock. That is about $27 per share.

EQT will also assume or refinance approximately $1.5B of net debt and preferred equity.

The transaction is expected to close in Q4 subject to customary closing conditions. As the vast majority of the acquired acreage is contiguous with EQT’s existing acreage position, EQT anticipates a 50% increase in average lateral lengths for future wells located in Greene and Washington Counties in Pennsylvania.

This same land synergy also complements the infrastructure footprint of EQT Midstream Partners, (EQM), where growth opportunities are expected through drop-downs and additional organic projects.

Rice Energy Inc. engages in the acquisition, exploration, and development of natural gas, oil, and natural gas liquid (NGL) properties in the Appalachian Basin.

Already a leading producer in the Appalachian Basin, this acquisition will make EQT the largest natural gas producer in the United States.

EQT will also obtain Rice’s midstream assets, including a 92% interest in Rice Midstream GP Holdings LP, which owns 100% of the general partner incentive distribution rights and 28% of the limited partner interests in Rice Midstream Partners LP and the retained midstream assets currently held at Rice.

The retained midstream assets, which EQT intends to sell to EQM in the future through drop-down transactions, are expected to generate approximately $130M of EBITDA in 2018.

The boards of directors of both companies have unanimously approved the transaction. Completion of the transaction is subject to the approval of both EQT and Rice shareholders, as well as certain customary regulatory and other closing conditions.

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