Biogen to acquire KPT-350 from Karyopharm

Karyopharm enters agreement for Biogen to acquire KPT-350

Karyopharm enters agreement for Biogen to acquire KPT-350, Stockwinners.com
Karyopharm enters agreement for Biogen to acquire KPT-350

Karyopharm Therapeutics (KPTI) announced its entry into an agreement for Biogen (BIIB) to acquire Karyopharm’s investigational oral SINE compound KPT-350 and other assets for the treatment of certain neurological and neurodegenerative conditions.

KPT-350 is a novel therapeutic candidate that works by inhibiting XPO1, resulting in reductions in inflammation and neurotoxicity, as well as increasing neuroprotective responses.

Under the terms of the agreement, Biogen is acquiring KPT-350 and other assets targeting certain neurological conditions, including amyotrophic lateral sclerosis.

In exchange, Karyopharm will receive a one-time upfront payment of $10M from Biogen and is eligible to receive additional payments of up to $207M based on the achievement by Biogen of future specified development and commercial milestones.

Karyopharm will also be eligible to receive tiered royalty payments from Biogen that reach low double digits based on future net sales of specified product candidates, including KPT-350.

KPTI closed at $10.45.


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Summit Therapeutics reports positive data on its DMD treatment

Treatment with ezutromid reduced muscle damage by 23%

Summit Therapeutics reports positive DMD data, Stockwinners.com
Summit Therapeutics reports positive DMD data

Summit Therapeutics plc (SMMT), the drug discovery and development company advancing therapies for rare diseases and infectious diseases, today announces positive 24-week interim results from the open-label Phase 2 proof of concept clinical trial, PhaseOut DMD.

PhaseOut DMD is evaluating the utrophin modulator ezutromid in patients with Duchenne muscular dystrophy (‘DMD’). The focus of the planned interim analysis was on biopsy measures that show:

  • Treatment with ezutromid resulted in a statistically significant and meaningful reduction in muscle damage as measured by a 23% decrease in mean developmental myosin in muscle biopsies at 24 weeks compared to baseline. Developmental myosin is a biomarker of muscle damage and is found in repairing fibres.
  • A total of 14 of 22 patients showed a decrease in developmental myosin, with five of those showing a greater than 40% reduction.
  • Increase in mean utrophin protein intensity levels of 7% in biopsies at 24 weeks compared to baseline.

The combination of reduced muscle fibre damage and increased levels of utrophin provides the first evidence of ezutromid target engagement and proof of mechanism.

DMD is caused by genetic faults that prevent muscle cells from making dystrophin, a protein that maintains the structure and healthy functioning of muscles.

The absence of dystrophin, as seen in patients with DMD, leads to a catastrophic cycle of muscle damage and repair.

Utrophin protein performs a similar role to dystrophin in developing and repairing muscle fibres.

As a muscle fibre matures, utrophin is switched off and replaced by dystrophin in the case of healthy individuals. During the early stages of natural muscle repair, utrophin and developmental myosin are expressed concurrently, and are then slowly switched off.

Ezutromid aims to maintain utrophin expression in patients with DMD so it can substitute for the lack of dystrophin and break this cycle.

SMMT closed at $12.21, it last traded at $15.25.


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United to increase capacity by 5 percent

United’s plan to increase capacity drags down airline stocks 

United plan to increase capacity by 5%. Stockwinners.com
United plan to increase capacity by 5%.

Shares of United Continental (UAL) are sliding after the company said in its earnings conference call that it plans to grow capacity by 4%-6% in 2018, likely threatening its profit margin.

This comes as United looks for a competitive edge in its fight against low-cost carriers such as Southwest Airlines (LUV) and JetBlue (JBLU).

This morning, Evercore ISI analyst Duane Pfennigwerth downgraded United to a neutral-equivalent rating.

RESULTS, OUTLOOK

Last night, United Continental reported fourth quarter adjusted earnings per share of $1.40 and revenue of $9.4B, with consensus at $1.34 and $9.42B, respectively.

The company also said Q4 2017 consolidated passenger revenue per available seat mile was up 0.2% compared to Q4 2016.

Additionally, the carrier noted it sees 2018 capacity growth of 4%-6%, and a similar growth rate in 2019 and 2020.

United expects 2018 EPS to be $6.50-$8.50 and sees 2018 capital expenditures of $3.6B-$3.8B.

CAPACITY CONCERNS

In a research note to investors this morning, Evercore ISI’s #Pfennigwerth downgraded United Continental to In Line from Outperform, with a $75 price target, following its quarterly report.

The analyst noted that while United’s belief appears as high as ever in the view that restoring domestic share in its hubs is the shortest path to margin expansion, the “biggest missing ingredient” from its presentation was any evidence that the strategy is working.

The company’s higher growth pitch likely plays well with labor ahead of another round of contract negotiations in 2019 but limits broader participation from longer term investors seeking confidence at this point in the cycle, he contended.

Furthermore, the analyst argued that growth acceleration following poor pricing execution in 2017 and in the face of a significantly higher fuel curve is “surprising.”

Meanwhile, his peer at Stephens also voiced concern over the company’s capacity growth plans. While analyst Jack #Atkins acknowledged that he was encouraged that United issued both 2018 and long-term EPS guidance, he believes its plan to grow its system capacity by 4%-6% for each of the next three years is “concerning” as it implies about 6%-8% growth in the domestic market.

This level of capacity growth risks muting unit revenue growth in the market as well as potentially sparking a competitive response from one of United’s network peers, Atkins added.

The analyst told investors he expects the group to come under pressure as investors work to determine who has the most exposure to its incremental capacity growth and what it means for domestic revenue trends for the industry. He reiterated and Equal Weight rating and $78 price target on United Continental shares.

REMAINS TOP PICK

In a note of his own, UBS analyst Darryl #Genovesi told investors he expects estimates for United Continental to move higher over the next few days and that he came away from the company’s guidance meeting more positive on the fundamental go-forward strategy.

The analyst pointed out that he believes the capacity concerns will likely get swept under the rug if industry RASM continues to be strong. Genovesi reiterated a Buy rating and $90 price target on United shares.

PRICE ACTION

UAL is down 10.5% to $69.80.


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Europe fines Qualcomm $1.2B

Europe fines Qualcomm $1.2B over chip payments to Apple

Europe fines Qualcomm $1.2B

The European Commission has fined Qualcomm (QCOM) EUR 997M, or $1.2B, for “abusing its market dominance in LTE baseband chipsets.”

Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals, the agency said in a statement.

This is illegal under European Union antitrust rules.

Commissioner Margrethe Vestager, in charge of competition policy, said:

“Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance.

Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm’s baseband chipsets in all its iPhones and iPads.

This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were.

Qualcomm’s behaviour denied consumers and other companies more choice and innovation – and this in a sector with a huge demand and potential for innovative technologies.

This is illegal under EU antitrust rules and why we have taken today’s decision.”

QCOM closed at $68.34.


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EMA rejects Puma’s neratinib, Shares tumble

Puma says EMA communicates negative trend vote over MAA for neratinib

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EMA rejects Breast Cancer Drug!
Puma Biotechnology (PBYI) announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency has communicated a negative trend vote after meeting with the company today to discuss the Marketing Authorisation Application for neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer.

 

A negative trend vote means it is unlikely that CHMP will provide a positive opinion related to the Company’s MAA at the formal CHMP decision vote scheduled in February 2018, and that additional steps would need to be taken to gain marketing approval in Europe.

 

CHMP indicated that, in its opinion, the benefit risk assessment is negative as the study results are based on evidence from a single pivotal trial and the 2- and 5-year invasive disease free survival benefits observed to-date may lack sufficient clinical relevance.

 

CHMP’s opinion was based on the results from both the Phase III ExteNET trial in extended adjuvant early stage HER2-positive breast cancer and the Phase II CONTROL trial in extended adjuvant early stage HER2-positive breast cancer.

BACKGROUND

 On July 17, 2017, the company announced that the U.S. FDA has approved #NERLYNX (neratinib), formerly known as #PB272, a once-daily oral tyrosine kinase inhibitor for the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer, following adjuvant trastuzumab-based therapy. The drug became commercially available in September of 2017 under the trade name as NERLYNX.

EUROPEAN  DATA 

Last September, Puma Biotechnology (PBYI) presented positive results from the Phase III clinical trial of Puma’s drug neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer following trastuzumab-based therapy in a proffered paper oral session at the European Society of Medical Oncology 2017 Congress in Madrid, Spain.

PRICE ACTION

Today’s EMA decision was a surprise to the market. PBYI closed at $90.90. Shares last traded at $66.00 in extended trading.

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Nasdaq to trade bitcoin futures

Nasdaq assessing bitcoin futures that are different to rivals

Bitcoin hits $8000. See Stockwinners.com for details
Nasdaq assessing bitcoin futures that are different to rivals

Nasdaq (NDAQ) is reviewing ways to offer cryptocurrency futures that operate differently from those offered by Cboe (CBOE) and CME Group (CME), CNBC reports, citing CEO Adena Friedman.

“We are continuing to investigate the idea of a cryptocurrency futures with a partner and we continue to look at the risk management around that, making sure we are putting the right protocols in place, making sure there’s proper demand, and that the contract is different from what’s already out there,” Friedman told CNBC.

“What we might look at is more of a total return futures, so it’s a little bit of a different construct,” adding that it meant it was “more of an investment than a tracking stock.”


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Qualcomm urges shareholders to re-elect board 

Qualcomm urges shareholders to re-elect board

Qualcomm urges shareholders to re-elect board 

“Dear Qualcomm Stockholder, Last week we released a presentation and a video that we believe clearly demonstrate why Broadcom’s hostile takeover proposal dramatically undervalues your Company and is not in the best interests of all Qualcomm’s stockholders.

In this letter, we highlight the significant regulatory issues with Broadcom’s (AVGO) proposal that Qualcomm (QCOM) stockholders must consider.

In summary: Even if Broadcom were to make a proposal that delivered fair value to Qualcomm stockholders, the complex regulatory challenges mean that Broadcom would not deliver that value to Qualcomm stockholders for what is likely to be 18 months or more – if ever.

Broadcom’s claim that it can deliver immediate cash to Qualcomm stockholders through its proposal is completely false.

Broadcom launched a proxy fight to replace Qualcomm’s world-class Board with nominees selected by it and its private equity backer, Silver Lake Partners.

If elected, these nominees – who lack significant large-cap technology Board experience – would be given control of one of the largest, most complex technology companies in the world.

In over two months since making their hostile proposal, Broadcom hasn’t taken the necessary steps to start the regulatory approval process in most countries around the world.

This is the largest proposed technology transaction in history and will require thorough reviews from both antitrust regulators and national security groups in multiple countries around the world.

Regulators in many countries may call for conflicting remedies based on their specific concerns. The regulatory process will be very long and complicated, and we believe it is highly doubtful that the proposed transaction will ultimately be approved.

In short, the Broadcom proposal raises significant regulatory and national security risks which will be compounded by the public and private customer opposition.

With these facts in mind, we believe electing Broadcom’s nominees makes no sense for Qualcomm stockholders and puts your Company at risk of significant value loss in the likely case the deal is not approved.”


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BioCryst and Idera Pharmaceuticals merge

BioCryst, Idera Pharmaceuticals enter merger agreement

BioCryst and Idera Pharmaceuticals merge Stockwinners.com
BioCryst and Idera Pharmaceuticals merge 

BioCryst Pharmaceuticals (BCRX), and Idera Pharmaceuticals (IDRA) announced that they have signed a definitive merger agreement to form a new enterprise focused on the development and commercialization of medicines to serve more patients suffering from rare diseases.

The combined company will be renamed upon closing and will be led by Vincent Milano, CEO of Idera, who will also serve as a member of the Board.

BioCryst Chairman, Robert Ingram, will be Chairman of the Board of the combined company and BioCryst CEO Jon P. Stonehouse will serve as a member of the Board of Directors.

BioCryst and Idera Pharmaceuticals merge Stockwinners.com
BioCryst and Idera Pharmaceuticals merge 

Under the terms of the merger agreement, each share of BioCryst common stock will be exchanged for 0.50 shares of the new company stock and each share of Idera common stock will be exchanged for 0.20 shares of the new company stock.

The exchange ratio reflects an “at market” combination based upon the approximate 30-day average volume weighted trading prices for each company.

On a proforma, fully diluted basis, giving effect to all dilutive stock options, units and warrants, BioCryst stockholders will own 51.6 percent of the stock of the combined company and Idera stockholders will own 48.4 percent.

The stock issuance in the merger is expected to be tax-free to stockholders.

The merger agreement has been unanimously approved by the boards of directors of both companies.

The transaction is subject to approval by the stockholders of both companies, as well as regulatory approvals and satisfaction of other customary closing conditions.

A significant stockholder of each company has agreed to enter into a voting and support agreement and has agreed to vote in favor of the transaction.

This stockholder owns approximately 9% of Idera shares outstanding and approximately 14% of BioCryst shares outstanding.

The transaction is expected to be completed by the end of the second quarter of 2018.

The combined company, which will be renamed post-closing, will be headquartered in Exton, PA, at the current Idera headquarters, with a consolidated research center in Birmingham, AL.

In addition to Mr. Milano’s role as CEO of the combined company, Dan Soland will join the combined company and will serve in the role of Chief Operating Officer.

BCRX closed at $5.59.  IDRA closed at $2.55.


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Juno Therapeutics sold for $87 per share in cash

Celgene to buy Juno Therapeutics for $87 per share in cash

Celgene to buy Juno Therapeutics for $87 per share in cash

Celgene Corporation (CELG) and Juno Therapeutics (JUNO) announced the signing of a definitive merger agreement in which Celgene has agreed to acquire Juno.

Under the terms of the merger agreement, Celgene will pay $87 per share in cash, or a total of approximately $9B, net of cash and marketable securities acquired and Juno shares already owned by Celgene.

The transaction was approved by the boards of directors of both companies. The transaction is anticipated to close in Q1:18.

Celgene expects to fund the transaction through a combination of existing cash and new debt.

The resulting capital structure will be consistent with Celgene’s historical financial strategy and strong investment grade profile providing the financial flexibility to pursue Celgene’s strategic priorities and take actions to drive post 2020 growth.

The acquisition is expected to be dilutive to adjusted EPS in 2018 by approximately 50c and is expected to be incrementally additive to net product sales in 2020.

There is no change to the previously disclosed 2020 financial targets of total net product sales of $19B-$20B and adjusted EPS greater than $12.50.

J.P. Morgan Securities LLC is acting as financial advisor to Celgene on the transaction. Morgan Stanley & Co. LLC is acting as financial advisor to Juno.

Legal counsel for Celgene is Proskauer Rose LLP and Hogan Lovells, and Juno’s legal counsel is Skadden, Arps, Slate, Meagher and Flom, LLP.


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Validus sold for $5.56B, or $68 per share

AIG to acquire Validus for $5.56B, or $68 per share, in cash

AIG to acquire Validus for $5.56B, or $68 per share. Stockwinners.com
AIG to acquire Validus for $5.56B, or $68 per share.

American International Group (AIG) announced it has entered into a definitive agreement to acquire all outstanding common shares of Validus Holdings (VR), a provider of reinsurance, primary insurance, and asset management services.

The transaction enhances AIG’s General Insurance business, adding a leading reinsurance platform, an insurance-linked securities asset manager, a meaningful presence at Lloyd’s and complementary capabilities in the U.S. crop and excess and surplus markets.

Holders of Validus common shares will receive cash consideration of $68.00 per share, for an aggregate transaction value of $5.56 billion, funded by cash on hand.

The transaction is expected to be immediately accretive to AIG’s earnings per share and return on equity.

Validus brings complementary, market-leading capabilities to AIG, enhancing AIG’s platform and long-term growth opportunities for both companies.

The diversification benefits of the transaction also provide significant additional capital efficiencies over time.

The transaction has been unanimously recommended by the boards of directors of AIG and Validus.

The transaction is expected to close mid-2018, subject to approval by Validus shareholders and other customary closing conditions, including regulatory approvals in relevant jurisdictions and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.


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Barron’s is bullish on Netflix and Boeing

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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Stockwinners offers Barron’s review of stocks to buy

BULLISH MENTIONS:

Boeing not a sell just yet – Boeing  (BA) stock has come quite far, quite fast and the pace has only accelerated in 2018, but such a rapid rise could reflect an overly optimistic outlook for the airplane manufacturer that could be difficult to meet, Ben Levisohn writes in this week’s edition of Barron’s. Nonetheless, Boeing is not a sell just yet, he argues. While at first glance, betting on Boeing now seems like a risk, the stock can remain extended for a long time, Levisohn adds.

Netflix among likely candidates for an Apple purchase – Especially for tech companies, tax cuts will boost dividends, buybacks, and mergers and acquisitions, but tech usually has a hard time putting vast amounts of cash to work as it requires little R&D to produce huge amounts of revenue, Tiernan Ray writes in this week’s edition of Barron’s. For example, Apple (AAPL) does not have many places to invest that will demonstrably boost financial results. Without the excuse that the cash is stuck overseas, pressure may grow for Apple to do something big, with Netflix (NFLX) as the most likely candidate for a purchase, he contends.

Still time to shop Walmart shares as company makes changes – In a follow-up story, Barron’s notes that some Walmart’s experiments, like curbside pickup for groceries, are getting solid results, and points out that late-year shopping was robust and corporate tax cuts have warmed investors to retailers. While high-income taxpayers will get larger cuts amid the new tax reform than low- and middle-income ones, those are more likely to spend the extra money, which bodes wells for Walmart, publication said, adding that Walmart continues making changes, such as paying one-time bonuses and closing 63 underperforming Sam’s Club locations.


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Kohl’s shares higher on Amazon partnership

Kohl’s shares could rally 50% from ‘win-win’ partnership with Amazon

Kohl's shares could rally 50% from 'win-win' partnership with Amazon. Stockwinners.com
Kohl’s shares could rally 50% from ‘win-win’ partnership with Amazon

Shares of Kohl’s Corp (KSS) rallied in morning trading after an analyst called the retailer’s partnership with Amazon (AMZN) a “win for both companies” and said Kohl’s stock could rise another 50% or more.

JEFFERIES ANALYST EXPRESSES OPTIMISM

Jefferies analyst Randal Konik raised his price target for Kohl’s stock to $100 from $66 and said the stock could rally at least another 50%.

In a note to clients, Konik asid Kohl’s is “addressing the digital revolution head on” and beating rivals with its emphasis on proprietary brands, rightsizing its square footage and its partnership with Amazon.

Konik said Kohl’s partnership with Amazon is “sleeping with the enemy,” but believes their agreement is a “win for both companies.”

He expects the pilot to roll out nationally, allowing Kohl’s stores to see stronger traffic and “a nice added convenience” for Amazon customers. Konik also said he expects Kohl’s sales growth to accelerate and margins to rise, and views current consensus estimates as “way too low.”

The company’s off-mall real estate is an additional positive, as is the closing of peer stores, Konik added.

WHAT’S NOTABLE

In order to combat weakness stemming from the increasing popularity of fast-fashion retailers and an increase in online shopping on sites like Amazon Kohl’s is currently offering free Amazon returns in 82 stores.

The retailer previously announced plans to roll out a “smart home experience” in 10 stores across the Los Angeles and Chicago areas.

Shoppers at these stories are able to purchase Amazon devices, accessories and smart home devices and services directly from Amazon.

Kohl’s said 1,000-square-foot “zones” within its stores will be dedicated to Amazon products, including the Echo, Echo Dot, Fire TV and Fire tablets.

Kohl’s has also partnered with Under Armour (UA, UAA), Nike (NKE) and adidas (ADDYY) to sell the companies’ shoes and apparel in Kohl’s stores.

Earlier this month, Kohl’s CEO told CNBC at ICR’s conference that the retailer plans to lease portions of its bigger stores to other retailers like grocery stores. The retailer is also testing smaller store formats of about 35,000 square feet.

PRICE ACTION:

Kohl’s is up 2.8% to $66.66 in morning trading.


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HSBC to pay more than $100M to resolve fraud charges

HSBC agrees to pay more than $100M to resolve fraud charges 

HSBC to pay more than $100M to resolve fraud charges. Stockwinners.com
HSBC to pay more than $100M to resolve fraud charges

HSBC Holdings (HSBC) has entered into a deferred prosecution agreement and agreed to pay a $63.1M criminal penalty and $38.4M in disgorgement and restitution to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar scheme commonly referred to as “front-running,” the DOJ confirmed.

The DPA, which was filed in connection with a two-count criminal information charging wire fraud in the United States District Court for the Eastern District of New York, is pending review by the Court.

According to HSBC’s admissions, on two separate occasions in 2010 and 2011, traders on its foreign exchange desk misused confidential information provided to them by clients that hired HSBC to execute multi-billion dollar foreign exchange transactions involving the British Pound Sterling.

After executing confidentiality agreements with its clients that required the bank to keep the details of their planned transactions confidential, traders on HSBC’s foreign exchange desk transacted in the Pound Sterling for the traders and HSBC’s own benefit in their HSBC “proprietary” accounts.

In total, HSBC admitted to making profits of approximately $38.4M on the first transaction in March 2010, and approximately $8M on the Cairn Energy transaction in December 2011.

HSBC did not receive credit for voluntarily disclosing the misconduct.

HSBC received substantial cooperation credit because, although as detailed in the DPA, the bank’s initial cooperation with the government’s investigation was deficient in certain respects, after being notified of the Department’s concerns, HSBC changed course and its cooperation improved substantially.


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Amazon names 20 finalists in race for second headquarters

Amazon names 20 finalists in race for second headquarters

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Amazon names 20 finalists in race for second headquarters

Shares of Amazon.com (AMZN) are in focus in morning trading after the company shortlisted 20 metropolitan areas for its new headquarters.

Among the candidates are New York City, Boston, Toronto, and Atlanta.

AMAZON NARROWS CHOICES FOR NEW HQ

Amazon on Thursday announced a narrowed down list of 20 metropolitan cities for its planned second headquarters.

The finalists, whittled down from 283 places that applied in October, include New York City, Boston, Atlanta and Chicago, which all have access to airports and mass transportation.

Other candidates include Dallas, Columbus, Denver, Newark, Philadelphia, Miami, Washington D.C., Toronto, Chicago, Los Angeles, Nashville and Indianapolis.

Amazon said it expects to create as many as 50,000 jobs that will be “high-paying” and generate more than $5B in investments over the next 10-15 years.

In addition to Amazon’s direct hiring and investment, construction and ongoing operation of Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community, Amazon said.

In a statement, Holly Sullivan of Amazon Public Policy, said that “getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity. Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

WHAT’S NOTABLE

Amazon solicited proposals in September for its second corporate headquarters.

In its request for proposals, Amazon said it was looking for a metro area with at least 1M residents, proximity to an international airport, mass transit and amenities that give it the “potential to attract and retain strong technical talent.”

The company plans to make a decision this year and will continue discussions with the 20 finalists, it said.

Amazon is also planning to grow in Seattle. In an interview with The Wall Street Journal in late 2017, Jeff Wilke, Amazon’s CEO of Worldwide Consumer, said the company planned to add 2M square feet and 6,000 people over 12 months to the Seattle headquarters.

RECENT TRUMP COMMENTS

President Donald Trump tweeted critically about the company on December 29, calling on the U.S. Postal Service to charge the online retailing giant “much more” for shipping.

Trump tweeted, “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!”

Stockwinners.com believers Toronto will be the winning city, given Trump’s hostile immigration policy. Amazon hires a large number of technical staff from other countries and an immigration-friendly policy of Canada makes a lot of sense for the company. The company already has a huge presence in that city.


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Wyndham acquires La Quinta hotel for $1.95B

Wyndham acquires La Quinta hotel for $1.95B

Wyndham acquires La Quinta hotel for $1.95B. Stockwinners.com
Wyndham acquires La Quinta hotel for $1.95B.

Wyndham Worldwide (WYN) and La Quinta (LQ) announced that they have entered into a definitive agreement under which Wyndham Worldwide will acquire La Quinta’s hotel franchise and hotel management businesses for $1.95B in cash.

The acquisition is expected to close in Q2 of 2018.

Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash, approximately $1.0 billion in aggregate, and Wyndham Worldwide will repay approximately $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging Inc.

Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging. Wyndham’s Hotel Group is the world’s largest and most diverse hotel business based on number of properties.

With the acquisition of La Quinta’s asset-light, fee-for-service business consisting of nearly 900 managed and franchised hotels, Wyndham Hotel Group will span 21 brands and over 9,000 hotels across more than 75 countries.

The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong midscale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests.

The La Quinta Returns loyalty program, with its 13 million enrolled members, will be combined with the award-winning Wyndham Rewards program, with its 53 million enrolled members.

The transaction, which has been approved by the boards of directors of both companies, is expected to close upon the completion of the planned spin-off of La Quinta’s owned real estate assets into the separate entity.

Closing is subject to approval by La Quinta stockholders, regulatory and government approval and the satisfaction of other customary closing conditions.

La Quinta also announced today that Keith A. Cline has been appointed President and Chief Executive Officer of CorePoint Lodging effective upon completion of the planned spin-off.

Wyndham Worldwide’s planned spin-off of Wyndham Hotel Group remains on track for an expected distribution in the second quarter of 2018.

LQ closed at $19.45. WYN closed at $117.13.


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