February 2018 – Equity Research, Option Picks, Stock Picks,Stockwinners, breaking news

February 28, 2018

FDA rejects Celgene’s application for ozanimod

Celgene receives Refusal to File letter from FDA regarding ozanimod NDA

Celgene tumbles — FDA rejects Celgene’s application for ozanimod

Celgene Corporation (CELG) announced that it has received a Refusal to File letter from the United States Food and Drug Administration regarding its New Drug Application for ozanimod in development for the treatment of patients with relapsing forms of multiple sclerosis.

Ozanimod is a novel, oral, selective sphingosine 1-phosphate 1 and 5 receptor modulator. Upon its preliminary review, the FDA determined that the nonclinical and clinical pharmacology sections in the NDA were insufficient to permit a complete review.

Celgene intends to seek immediate guidance, including requesting a Type A meeting with the FDA, to ascertain what additional information will be required to resubmit the NDA.

ANALYSTS REACTION

UBS analyst Carter Gould noted Celgene disclosed the FDA issued a Refusal to File regarding the NDA for ozanimod in multiple sclerosis.

He believes this will likely delay its approval until at least 2019 and raise another round of questions on Celgene’s execution as the last six months have brought clinical, regulatory, and commercial setbacks. Gould maintained his Buy rating, but lowered his price target to $106 from $120.

SunTrust analyst Yatin Suneja downgraded Celgene to Hold from Buy and lowered his price target to $106 from $139. Suneja cites the FDA refusal letter on ozanimod for relapsing forms of multiple sclerosis after its determination that the nonclinical and clinical pharmacology sections in the NDA were “insufficient” to permit a complete review.

The analyst says ozanimod was “central to our bull thesis to re-accelerate growth in the I&I franchise”, lowering his projected peak sales estimate for the treatment to $3.5B from $5.0B following this latest setback.

Piper Jaffray analyst Christopher Raymond says Celgene’s diversification story “takes another hit” following receipt of a refusal to file letter from FDA for ozanimod’s multiple sclerosis new drug application submission.

Investors may now have to contemplate a multiple sclerosis launch that potentially coincides with Gilenya’s loss of exclusivity “unless a more aggressive timetable can somehow be salvaged,” Raymond tells investors in a research note. The analyst cut his estimates for ozanimod “dramatically” and prefers to remain on the sidelines with respect to Celgene shares. He keeps a Neutral rating on the name with a $95 price target.

PRICE ACTION

CELG is down over 6.5% to $89.50 in pre-market trading.

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This 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.

February 28, 2018

Student Transportation sold for $7.50 a share

Student Transportation to be acquired by investors led by CDPQ

Student Transportation (STB) announced that it entered into a definitive agreement with a company sponsored by Caisse de depot et placement du Quebec and Ullico Inc. pursuant to which the Purchaser Group will acquire all of the company’s outstanding common shares by way of a plan of arrangement under the Business Corporations Act.

Student Transportation Inc. (STB) provides school bus transportation and management services to public and private schools in North America. The company offers contracted, managed, special needs transportation, direct-to-parent, and charter services. It operates approximately 290 contracts with a fleet of 13,000 vehicles.

Shareholders of STI will receive $7.50 per common share in cash, representing a 27% premium to the 20-day volume weighted average price per common share on the Toronto Stock Exchange for the period ending February 27, 2018, based on an exchange rate of $1.2776 Canadian dollars per U.S. dollars as of February 27, 2018.

Holders of STI’s 6.25% Convertible Unsecured Subordinated Debentures will receive the product of $7.50 and the number of Common Shares that the holders would be entitled to receive upon the conversion of their 2013 Debentures in accordance with their terms immediately following the closing date of the Arrangement, including those issuable upon a “Cash Change of Control”, plus the sum of accrued and unpaid interest on such debentures up to but excluding the Closing Date and the interest that would have otherwise accrued from and including the Closing Date to but excluding 32 days thereafter.

Holders of STI’s 5.25% Convertible Unsecured Subordinated Debentures will receive the product of $7.50 and the number of Common Shares that the holders would be entitled to receive upon the conversion of their 2016 Debentures in accordance with their terms immediately following the Closing Date, including those issuable upon a “Cash Change of Control”, plus the sum of accrued and unpaid interest on such debentures up to but excluding the Closing Date and the interest that would have otherwise accrued from and including the Closing Date to but excluding 32 days thereafter.

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February 27, 2018

Macy’s rises on strong earnings

Macy’s rises as turnaround plan fuels better-than-expected earnings

Shares of Macy’s (M) rallied after the company reported better-than-expected earnings, including a surprise increase in same-store sales, and offered 2018 guidance.

EARNINGS AND GUIDANCE

Macy’s reported fourth quarter adjusted earnings per share of $2.82, beating analysts’ estimates of $2.71, on revenue of $8.67B, essentially in line with the $8.68B consensus but up 1.8% from the year-ago period.

Comparable sales on an owned basis were up 1.3% and up 1.4% on an owned plus licensed basis. Macy’s also offered guidance for 2018, including EPS of $3.55-$3.75, excluding anticipated settlement charges related to the company’s defined benefit plans, which compares to analyst estimates of $3.66. The retailer sees comp sales on both an owned and an owned plus licensed basis flat to up 1% and expects total sales to decline 0.5% to 2%.

EXECUTIVE COMMENTARY

In a statement, Chairman and CEO Jeff Gennette said, “We are committed to returning Macy’s to comparable sales growth in 2018 and will build on the momentum we created in the fourth quarter of 2017… We head into 2018 with an improved base business, healthy inventories, a focused and engaged organization and a clear path to return Macy’s to growth.”

On the company’s quarterly earnings call, CFO Karen Houget said Macy’s expects stronger sales in the second half of 2018 than the first half and that first half owned plus licensed comp sales are expected to be “approximately flat to slightly down.”

UPDATE ON BROOKFIELD ALLIANCE

Macy’s this morning also provided an update on its agreement with Brookfield Asset Management (BAM), noting that it recently agreed to sell seven floors of its State Street store in Chicago to a private real estate fund sponsored by Brookfield.

As part of the transaction, Macy’s will receive a total of $30M as well as upside participation in the ultimate value creation associated with the conversion of the upper floors to office space. The company anticipates closing this transaction in the first half of fiscal 2018.

The company is also exploring opportunities to sell the approximately 240,000 gross square footI. Magnin portion of the main Union Square building in San Francisco.

The companies have also agreed to certain terms on nine assets, which Brookfield will redevelop once it has received approval. Macy’s said it hopes to reach a deal on the nine assets in 2019. Macy’s said it “continues to opportunistically evaluate its real estate portfolio to identify opportunities where the redevelopment value of its real estate exceeds that of non-strategic operating locations.”

PEERS

Macy’s and other mall-based retailers and department stores have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping on sites such as Amazon (AMZN).

Additionally, in January, Macy’s reported that its comparable sales on an owned basis increased 1% in the months of November and December 2017 combined, which lagged rivals J.C. Penney (JCP) and Kohl’s (KSS). J.C. Penney posted same-store sales growth of 3.4% during the November-December holiday period, while Kohl’s reported that total and comparable sales were up 6.9% for the period over the last year. Kohl’s , J.C. Penney, and Nordstrom (JWN) are expected to report later this week.

PRICE ACTION

Shares of Macy’s are off earlier highs and are now up about 4% to $28.51 in Tuesday’s trading.

OTHERS TO WATCH

J.C. Penney is up 2.3%, Nordstrom is down about 2% and Kohl’s is down 1.5%.

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February 27, 2018

CVB Financial, Community Bank to merge in $878.3M deal

CVB Financial, Community Bank to merge. Stockwinners.com — CVB Financial, Community Bank to merge.

CVB Financial (CVBF) and Community Bank announced that they have entered into an agreement and plan of reorganization and merger, pursuant to which Community will merge with and into Citizens in a stock and cash transaction valued at approximately $878.3M, based on CVBF’s closing stock price of $23.37 on February 23, 2018.

The merger will increase Citizens’ total assets to approximately $12B on a pro forma basis as of December 31, 2017.

CVBF expects the merger to result in approximately 12% earnings per share accretion in 2019, excluding one-time transaction costs. CVBF anticipates the merger to be approximately 11% dilutive to tangible book value per share at closing with an earn back period of approximately 4.9 years and an internal rate of return of greater than 15%.

Additionally, at closing, Marshall V. Laitsch, Chairman of the Board of Community, will join the Board of CVBF. Community Bank, headquartered in Pasadena, California, had approximately $3.7B in total assets, $2.7B in gross loans and $2.9B in total deposits as of December 31, 2017.

Community has sixteen branch locations throughout the greater Los Angeles and Orange County areas. Pursuant to the Agreement, each share of Community common stock, including unvested restricted stock units, will receive a fixed consideration consisting of 9.4595 shares of CVBF common stock and $56.00 per share in cash.

CVBF will pay aggregate consideration of approximately 30.0 million shares of CVBF common stock and $177.5M in cash, subject to purchase price adjustment provisions and other terms set forth in the Agreement.

Giving effect to the merger, Community shareholders would hold, in aggregate, approximately 21.4% of CVBF’s outstanding common stock following the merger. Upon completion of the merger, Community will operate as Citizens Business Bank and will continue to deliver the high-touch level of service that its customers expect, with an expanded branch and ATM network and a broad range of products and services, including expertise in personal, small business, private and corporate banking, as well as treasury management and trust services.

The boards of directors of Community, CVBF and Citizens have approved the proposed merger.

The closing of the merger is subject to customary regulatory approvals and the approval of CVBF and Community shareholders, and is anticipated to occur in the third quarter of 2018.

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February 27, 2018

Comcast tops Fox offer for Sky

Comcast tops Fox offer for Sky with $31B acquisition proposal

Comcast (CMCSA) announced a possible offer which it says is a “superior cash proposal” to acquire Sky (SKYAY).

Comcast’s announcement of a superior cash proposal of GBP 12.50 per share represents a 16% increase in value over the existing 21st Century Fox offer (FOXA) for Sky.

Comcast’s superior cash proposal implies an equity value of $31B for Sky.

“A combination would bring attractive financial benefits to Comcast shareholders, and is expected to be accretive to Comcast’s free cash flow per share in year one…The acquisition would enhance the entertainment, distribution, and technology leadership of Comcast, and importantly expand Comcast’s international footprint to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape.

The combined business would create compelling opportunities for growth and innovation,” Comcast said in a statement.

“We think Sky is an outstanding company. It has 23 million customers and leading positions in the UK, Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.

Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky’s UK headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of Company revenues,” said Brian Roberts, CEO of Comcast.

SKYAYA closed at $61.60.

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February 25, 2018

Barron’s in bullish on Dropbox IPO

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

Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH MENTIONS:

Advertising companies cheaper than usual – After a tumble last year, shares of advertising companies such as Interpublic Group (IPG), Omnicom Group (OMC), Publicis Group (PUBGY), and WPP (WPP) are cheaper than usual relative to earnings, and business appears to be picking up, Jack Hough writes in this week’s edition of Barron’s. That is an opportunity for value investors, the report adds.

Quantum computing soon to be reality – Microsoft (MSFT) predicts that in five years there will be practical quantum computers, Tiernan Ray writes in this week’s edition of Barron’s. But there may be implications worth pondering, the report notes. As quantum computing grows nearer, it could ripple through technology and the race for innovative chips, software and cloud computing could be affected, Ray contends, adding that the companies that shoulder risk and reward include Intel (INTC), Nvidia (NVDA), Micron Technology (MU), Microsoft, Alphabet (GOOG; GOOGL) and Amazon (AMZN).

Dropbox IPO bodes well – In a follow-up article after Dropbox (DBX) filed a prospectus with the Securities and Exchange Commission for an initial public offering that could raise as much as $500M, Barron’s notes that the company has a private-market value of about $10B, making it one of the most valuable unicorns. A successful deal could invigorate the tech IPO market after Snap’s (SNAP) disappointing offering last year, the report adds.

May be time to consider Time Warner – Time Warner (TWX) shares look increasingly attractive as the company’s profit outlook should limit the downside if its merger deal with AT&T (T) is blocked on antitrust reasons, Andrew Bary writes in this week’s edition of Barron’s.

Many downsides when Amazon’s HQ2 comes to town – As Amazon decides on the location for its second corporate headquarters in North America, many have cautioned the 20 finalists to “be careful what you wish for,” Jon Swartz writes in this week’s edition of Barron’s. There are several downsides and prospective bidders should look no further than Silicon Valley, with workers still struggling to find affordable housing while enduring hellacious traffic and escalating costs in the area, the report noted.

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February 23, 2018February 23, 2018

Gun stocks fall as pressure mounts on NRA

Gun stocks fall as corporate pressure mounts on NRA

The National Rifle Association, or #NRA, an American organization that advocates for gun rights, is seeing public pressure mount from corporations that it has partnered with in the wake of the Parkland, Florida school shooting, which resulted in 17 deaths.

PARTNERSHIPS DROPPED

The nation’s largest privately owned bank, First National Bank of Omaha, said on Thursday that it will not renew its contract with the NRA for a branded Visa card.

A spokesman for the bank said in a statement, “Customer feedback has caused us to review our relationship with the NRA. As a result, First National Bank of Omaha will not renew its contract with the National Rifle Association to issue the NRA Visa Card.”

Additionally on Thursday, privately held Enterprise Holdings, which owns the Enterprise, Alamo, and National car rental brands, said it will end its partnership with the NRA — which gave NRA members discounts — next month.

FORMER PARTNERS DISTANCING THEMSELVES

Hotel companies Best Western and Wyndham Hotels, which were previously targeted for boycotts following the Newton, Connecticut elementary school shooting in 2012, have posted dozens of tweets each, letting customers know they are no longer affiliated with the NRA.

Wyndham tweeted repeatedly, “Please know, Wyndham is no longer affiliated with the NRA,” while Best Western tweeted a similar message, “Best Western Hotels & Resorts does not have an affiliation with and is not a partner of the National Rifle Association.”

MORE PARTNERSHIPS DROPPED

Over the course of the day, more companies joined the growing chorus, including Hertz (HTZ), which ended its rental car discount program with the NRA, Symantec (SYMC), which stopped its discount program with the NRA, Metlife (MET), which ended its insurance discount program with the NRA, and Chubb (CB), which will stop underwriting a NRA-branded insurance policy for gun owners.

PRICE ACTION

Publicly traded gunmakers are down in Friday’s trading on a day the broader markets are rising. American Outdoor Brands Corp (AOBC), formerly known as Smith & Wesson, is down 5.5% to $9.56, while Sturm Ruger & Company (RGR) is down 3.67% to $47.20.

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February 23, 2018

CHMP recommends against use of Pfizer’s SUTENT

Pfizer says CHMP recommends against expanding use of SUTENT

Pfizer (PFE) announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency has recommended against expanding use of SUTENT to include the adjuvant treatment of adult patients at a high risk of recurrent renal cell carcinoma following nephrectomy.

The #CHMP’s recommendation is not binding but will now be taken into consideration by the European Commission.

There is currently no approved adjuvant treatment option available for patients with non-metastatic RCC at high risk for recurrence in the European Union.

In the U.S., #SUTENT is approved for the adjuvant treatment of adult patients at high risk of recurrent RCC following nephrectomy. On November 16, 2017, the U.S. Food and Drug Administration approved an expanded indication for SUTENT as the first treatment for adult patients at high risk of recurrence following nephrectomy.

The FDA expanded indication was based on results from the S-TRAC trial, a multicenter, international, randomized, double-blind, placebo-controlled Phase 3 trial of SUTENT versus placebo in 615 patients with clear cell histology and high risk of recurrence following nephrectomy.

The results were published by The New England Journal of Medicine in October 2016.

PFE closed at $35.74.

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February 23, 2018February 23, 2018

Blue Buffalo sold for $8 billion

General Mills acquires Blue Buffalo Pet Products for $40.00 a share in cash

General Mills (GIS) and Blue Buffalo Pet Products (BUFF) announced that they have entered into a definitive agreement under which General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8B.

The transaction establishes General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market, and accelerates its portfolio reshaping strategy.

The $30 billion U.S. pet food market is generating consistent 3-4% growth and is highly attractive for retailers based on continued market growth, premiumization and subscription-like purchase patterns that drive traffic and repeat purchases.

Blue Buffalo is the leader in the fastest-growing Wholesome Natural category with double-digit growth over each of the last three years. The Wholesome Natural market represents approximately 10% of the pet food market in volume and approximately 20% in value.

Based on the strong consumer tailwinds, the Wholesome Natural market is poised to continue to grow, propelling BLUE’s growth.

General Mills’ scale and decades of experience will support greater effectiveness and efficiency for Blue Buffalo across key business areas, including: sales, marketing, advertising, supply chain, R&D, innovation, and environmental stewardship.

These capabilities are expected to contribute to meaningful revenue synergies over time, in addition to $50 million in anticipated cost savings opportunities.

The transaction will be immediately accretive to General Mills (GIS) net sales growth and operating margin profile, and is expected to be neutral to cash EPS in fiscal 2019 and accretive in fiscal 2020.

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February 22, 2018

Workhorse to build UPS electric delivery trucks

UPS partners with Workhorse to build electric delivery trucks

UPS (UPS) announced it plans to deploy 50 plug-in electric delivery trucks that will be comparable in acquisition cost to conventional-fueled trucks without any subsidies – an industry first that is breaking a key barrier to large scale fleet adoption.

The company is collaborating with Workhorse Group (WKHS) to design the vehicles from the ground up, with zero tailpipe emissions. Workhorse claims these vehicles provide nearly 400% fuel efficiency improvement as well as optimum energy efficiency, vehicle performance and a better driver experience.

Each truck will have a range of approximately 100 miles between charges, ideal for delivery routes in and around cities.

The class 5, zero emission delivery trucks will rely on a cab forward design, which optimizes the driver compartment and cargo area, increasing efficiency and reducing vehicle weight.

The new trucks will join the company’s Rolling Lab, a growing fleet of more than 9,000 alternative fuel and advanced technology vehicles. UPS will test the vehicles primarily on urban routes across the country, including Atlanta, Dallas and Los Angeles.

With zero emissions and lower noise, the electric delivery trucks will help UPS make its fleet cleaner and quieter, a significant benefit in urban areas.

Following real-world test deployments, UPS and Workhorse will fine-tune the design in time to deploy a larger fleet in 2019 and beyond. Since most of the maintenance costs of a vehicle are associated with the engine and related components, UPS expects the operating cost of the new plug-in electric vehicle to be less than a similarly equipped diesel or gasoline vehicle.

UPS’s goal is to make the new electric vehicles a standard selection, where appropriate, in its fleet of the future. UPS has approximately 35,000 diesel or gasoline trucks in its fleet that are comparable in size and are used in routes with duty cycles, or daily miles traveled similar to the new electric vehicles.

The initiative will help UPS attain its goal of one in four new vehicles purchased by 2020 being an alternative fuel or advanced technology vehicle.

The company also has pledged to obtain 25% of the electricity it consumes from renewable energy sources by 2025 and replace 40% of all ground fuel with sources other than conventional gasoline and diesel, an increase from 19.6% in 2016.

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February 22, 2018February 22, 2018

Kite and Sangamo to develop engineered cell therapies

Kite, Sangamo announce collaboration to develop engineered cell therapies

Kite, Sangamo to develop engineered cell therapies. Stockwinners.com — Kite, Sangamo to develop engineered cell therapies

Kite, a Gilead Company (GILD) and Sangamo Therapeutics (SGMO) announced the companies have entered into a worldwide collaboration using Sangamo’s zinc finger nuclease technology platform for the development of next-generation ex vivo cell therapies in oncology.

Ex vivo cell therapy is in essence gene therapy delivered by transfer of therapeutic genes to cells in culture, which are then given to the patient to treat fatal infections such as AIDS, or other conditions such as cancer or genetic diseases.

These manipulations include the purification and culture of therapeutic cell subtypes, as well as elimination of cells which cause disease (cancer cells or immune cells reacting to the body itself). Gene therapy can be delivered by transfer of therapeutic genes to cells in culture, which are then given to the patient to treat fatal infections such as AIDS, cancer or genetic diseases.

Kite will use Sangamo’s ZFN technology to modify genes to develop next-generation cell therapies for autologous and allogeneic use in treating different cancers.

Allogeneic cell therapies from healthy donor cells or from renewable stem cells would provide a potential treatment option that can be accessed directly within the oncology infusion center, thus reducing the time to infusion for patients.

Under the terms of the agreement, Sangamo will receive an upfront payment of $150M and is eligible to receive up to $3.01B in potential payments, aggregated across 10 or more products utilizing Sangamo’s technology, based on the achievement of certain research, development, regulatory and successful commercialization milestones.

Sangamo would also receive tiered royalties on sales of potential future products resulting from the collaboration. Kite will be responsible for all development, manufacturing and commercialization of products under the collaboration, and will be responsible for agreed upon expenses incurred by Sangamo.

This transaction is subject to clearance under the Hart-Scott Rodino Antitrust Improvements Act and other customary closing conditions.

A Current Report on Form 8-K describing the proposed transaction in more detail will be filed by Sangamo, and this press release is subject to further detail provided in Sangamo’s 8-K.

Separately, Sangamo reported Q4 EPS (15c) vs consensus (18c) – Reported Q4 revenue $13.1M, consensus $11.43M.

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February 21, 2018

Lionsgate slides on downgrade

Lionsgate slides as analyst cuts rating on competitive, cost concerns

Lionsgate falls on downgrade. Stockwinners.com — Lionsgate falls on downgrade.

Bernstein analyst Todd Juenger downgraded Lionsgate (LGF.B) to Market Perform this morning, putting some pressure on the shares.

The analyst argued that competitive investment from rival premium and Subscription Video On Demand, or SVOD, services has gotten much more intense, while also pointing to increased programming investment at Starz.

MOVING TO THE SIDELINES

In a research note this morning, Bernstein’s Juenger downgraded Lionsgate to Market Perform from Outperform and lowered his price target on Class B shares to $30 from $35.

The analyst told investors that he believes competitive investment from rival premium and SVOD services has gotten much more intense, and noted that increased programming investment at Starz is a necessary but recurring cost of doing business, which means the normalized growth rate for Starz has to be lower.

#Juenger added that while Lionsgate likes to tell investors they offer higher-than-average growth at lower-than-average risk, he sees, at best, average growth, with higher-than-average risk.

Further, M&A is always possible, but if discussions were on-going or imminent, the company would not choose to increase investment, lower guidance, and reinstate a dividend, the analyst contended.

NEAR-TERM UPSIDE MUTED

Last week, Barrington analyst James Goss lowered his price target for Lionsgate to $34 from $40, while reiterating an Outperform rating on the stock.

The analyst noted that with the company’s repositioning its film slate under new leadership, and increasing its investment in programming for Starz, Lionsgate sees more muted growth in 2019, with a significant ramp in 2020. While Goss expects near-term upside to be muted, he believes the Starz service will be a more attractive offering in the “shifting media landscape,” which should provide further opportunities for long-term growth.

INDUSTRY CONSOLIDATION

According to a report by CNBC earlier this month, Comcast (CMCSA) could consider topping Disney’s (DIS) bid for 21st Century Fox (FOXA) if regulators approve AT&T’s (T) acquisition of Time Warner (TWX).

While no decision has been made by Comcast, Disney is already considering responses in case Comcast makes a run at Fox, the report added.

On December 14, Disney and 21st Century Fox announced they had entered into a definitive pact under which Disney will acquire 21st Century Fox, including the company’s Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock.

As part of the deal, Fox will spin off Fox Broadcasting network and stations, Fox News, Fox Business, FS1, FS2, and Big Ten Network to its shareholders.

PRICE ACTION

In Wednesday’s trading, Class B shares of Lionsgate had dropped over 1% to $26.90.

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February 21, 2018

Aegean Marine to acquire H.E.C. Europe for $367M

Aegean Marine to acquire H.E.C. Europe for approximately $367M

Aegean Marine (ANW) is pleased to announce that today it has entered into a definitive agreement to acquire all of the outstanding share capital of H.E.C. Europe Limited, the parent company of Hellenic Environmental Center S.A. and a group of companies that together provide global port reception facilities services, from the shareholders of H.E.C., for aggregate consideration of approximately $367M, including the assumption of certain indebtedness, which consideration is payable in the form of a combination of debt, the assignment of certain accounts receivables, cash and shares of Aegean common stock, which will represent approximately 33% of the issued and outstanding common stock of Aegean after giving effect to the issuance.

The Sellers are companies owned and controlled by Dimitris Melisanidis and certain members of his family, and members of the Agiostratitis family.

Aegean expects the acquisition, which results from several months of negotiations, to be immediately accretive to adjusted earnings per share in year one.

The acquisition was unanimously approved by the Aegean Board upon the recommendation of a special committee of independent directors. In making its recommendation, the Special Independent Committee consulted with its independent financial advisor, Clarksons Platou Securities and outside legal counsel.

The acquisition does not require the approval of Aegean’s shareholders. Aegean expects the acquisition to be immediately accretive to adjusted EPS in year one. Post-closing of the transaction, expected additional 2018E Revenues will amount to approximately $60M-$65M and 2018E EBITDA will amount to approximately $35M-$40M, which assumes timely closing of the transaction and completion of targeted acquisitions in 2018.

In addition, Aegean expects to appoint one additional independent director to the Aegean Board, effective as of the closing of the acquisition, creating an eight member Board of Directors.

ANW closed at $4.45.

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February 21, 2018

Broadcom lowers its offer for Qualcomm

Broadcom adjusts offer for Qualcomm to $79.00 per Qualcomm share

Broadcom proposes to buy Qualcomm for $79 per share.

Broadcom (AVGO) reaffirms its commitment to acquiring Qualcomm (QCOM), and is adjusting its offer following the Qualcomm board’s decision to transfer $4.10 per Qualcomm share (or $6.2B of value) from Qualcomm stockholders to NXP (NXPI) stockholders.

Broadcom is prepared to acquire Qualcomm for $79 per Qualcomm share, consisting of $57 in cash and $22 in Broadcom shares (premised on Qualcomm’s revised agreement to acquire NXP at $127.50 per NXP share).

In addition, Broadcom’s proposed merger agreement for Qualcomm would provide for an automatic increase of $3 in cash per Qualcomm share, or a total of $82 per Qualcomm share, consisting of $60 in cash and $22 in Broadcom shares, in the event that Qualcomm is unable to complete the NXP (NXPI) acquisition.

Broadcom’s proposed merger agreement otherwise remains unchanged, including the $8 billion regulatory reverse termination fee and 6% per annum (net of dividends) ticking fee accruing from and after the 12-month anniversary of the date of the merger agreement.

Broadcom believes that a responsible Qualcomm board could have preserved value by following ISS’s clear recommendation to work with Broadcom on the NXP transaction and negotiate the sale of Qualcomm to Broadcom.

Instead Qualcomm’s board acted against the best interests of its stockholders by unilaterally transferring excessive value to NXP’s activist stockholders.

Despite this direct value transfer, Broadcom remains committed to delivering a value-maximizing offer to Qualcomm stockholders.

Broadcom remains confident that Qualcomm’s stockholders will continue to support its proposal to acquire Qualcomm, and looks forward to concluding a transaction with this Qualcomm board of directors, or the newly elected Qualcomm board following its annual meeting on March 6, 2018.

Broadcom continues to urge Qualcomm stockholders to vote the entire BLUE proxy card “FOR” ALL SIX Broadcom nominees to show support for the Broadcom proposal.

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February 21, 2018

Positive data reported on uterine fibroids

Phase 3 ELARIS UF-I study of elagolix met primary endpoint

AbbVie (ABBV) in cooperation with Neurocrine Biosciences (NBIX), announced that the Phase 3 ELARIS UF-I study of elagolix met its primary endpoint.

Results from the first of two pivotal Phase 3 studies demonstrated at month six that elagolix, in combination with low-dose hormone (add-back) therapy, reduced heavy menstrual bleeding with 68.5 percent (pless than 0.001) of women with uterine fibroids achieving clinical response compared to placebo (8.7 percent), as measured by the alkaline hematin method.

Uterine fibroids are noncancerous growths of the uterus that often appear during childbearing years. Also called leiomyomas (lie-o-my-O-muhs) or myomas, uterine fibroids aren’t associated with an increased risk of uterine cancer and almost never develop into cancer.

Fibroids range in size from seedlings, undetectable by the human eye, to bulky masses that can distort and enlarge the uterus. You can have a single fibroid or multiple ones. In extreme cases, multiple fibroids can expand the uterus so much that it reaches the rib cage. Many women have uterine fibroids sometime during their lives. But most women don’t know they have uterine fibroids because they often cause no symptoms.

Clinical response was defined as menstrual blood loss volume of less than 80 mL during month six and a 50 percent or greater reduction in menstrual blood loss volume from baseline to month six.

The study also met all ranked secondary endpoints (pless than 0.001) at month six.

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