Michael Kors Buys Jimmy Choo for $1.35B

Michael Kors to acquire Jimmy Choo PLC for $1.35B

Michael Kors to acquire Jimmy Choo PLC for $1.35B. See Stockwinners.com for stocks to buy, stocks to watch, stocks to follow

Michael Kors (KORS) announced that it has reached an agreement to acquire Jimmy Choo PLC, a global luxury footwear and accessories brand.

Under the terms of the transaction, Jimmy Choo shareholders will receive 230 pence per share, with an enterprise value of approximately $1.35B.

The transaction has been approved by the boards of both Michael Kors and Jimmy Choo.

The transaction is not subject to a financing condition. Michael Kors has committed bridge financing from JPMorgan Chase Bank and Goldman Sachs Bank USA to satisfy the certain funds requirement of the U.K. Takeover Code to complete the transaction.

The transaction is intended to be effected by a U.K. court-approved Scheme of Arrangement and is expected to close in Q4, subject to customary closing conditions, including the receipt of required regulatory approvals as well as the approval of the Scheme by Jimmy Choo shareholders, who together hold at least 75% of the issued share capital of Jimmy Choo and represent a majority of the shareholders voting at the meeting.

Michael Kors has received irrevocable undertakings from JAB Luxury GmbH, Jimmy Choo directors and Sandra Choi, who collectively represent 69.21% of the issued and outstanding Jimmy Choo shares in support of the transaction.

Michael Kors Holdings Limited believes that the acquisition enhances the company’s economic value and will drive improved long-term shareholder value. The acquisition is expected to be accretive on a GAAP basis in fiscal 2020.

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India Approves Anika Therapeutics’ Treatment for Osteoarthritis Pain

Anika Therapeutics says Monovisc approved in India

Anika Therapeutics says Monovisc approved in India. See Stockwinners.com Market Radar for Stock Upgrades, stock downgrades, stock earnings, stocks to watch

Anika Therapeutics (ANIK) announced that regulatory authorities in India granted approval to MONOVISC, its single injection viscosupplement for the treatment of pain associated with osteoarthritis of all human synovial joints.

#MONOVISC is commercially available in the United States, Canada and Europe, and Anika plans to expand into India, Australia, New Zealand and additional international markets over the next six to nine months.

“Expanding our global commercial footprint is one of our key strategic pillars of growth, and the approval of MONOVISC in India is a proof point for our ability to execute against the benchmarks we define each year,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer of Anika Therapeutics.

“There is a growing demand for non-invasive, long-acting treatments for osteoarthritis in emerging countries such as India where knee replacement surgery is often the last option or not an option at all, due to limited medical resources outside major cities and high costs of surgery and postsurgical care.

With its ability to safely relieve pain for up to six months with fewer office visits, lower treatment costs and no downtime after treatment, MONOVISC is poised to be well-received by physicians and patients in India.”

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Hibbett Sports Brings the Sector Down!

Foot Locker, Under Armour slide following Hibbett Sports profit warning

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Shares of Foot Locker (FL) and Under Armour (UA) are sliding after Hibbett Sports (HIBB) provided negative preliminary results for the second quarter.

Commenting on the news, Raymond James analyst Dan #Wewer added that the read through is negative not only for Hibbett’s vendors but also appears negative for Dick’s Sporting Goods (DKS).

PRELIMINARY RESULTS

Hibbett Sports has provided preliminary results for the second quarter ended July 29, stating that based on “very challenging sales trends,” comparable store sales are expected to decrease approximately 10% for the second quarter.

The company, which also and announced the launch of its new e-commerce site this morning, added that the decline in sales, along with significant pressure on gross margin, is expected to result in a loss of (19c) to (22c) per diluted share for the quarter.

NEGATIVE READ-THROUGH

In a research note to investors, Raymond James’ Wewer noted that Hibbett’s same-store sales warning follows Finish Line’s (FINL) first quarter release on June 23 that May sales suffered from weak consumer traffic and difficult product launch comparisons. The read through is negative for Hibbett’s vendors, including Under Armour (UAA), said Wewer.

While the analyst acknowledged that he is not sure if Hibbett’s sales trends were company specific or reflective of the industry, he said the preannouncement also appears negative for Dick’s.

Meanwhile, Stifel analyst Jim #Duffy told investors in a research note of his own that Hibbett’s release is symptomatic of difficult retail trends in North America. While the analyst noted he sees negative comparable sales as a structural challenge to the retail business, he does expect poor second quarter performance to set up for an easy compare in the second quarter of 2018.

Nonetheless, Duffy pointed out that the e-commerce launch timing is welcome ahead of back-to-school, providing a revenue benefit at lower operating margins near-term. He reiterated a Hold rating on Hibbett’s shares.

Voicing a similar opinion, his peer at #SunTrust noted that Hibbett’s profit warning was just the latest data point showing a lack of sector vitality right now.

Fashion shifts, macro sluggishness and e-commerce shifts are all playing a role, analyst David #Magee contended.

Furthermore, the analyst pointed out that he does not think the sector weakness is confined to the company in what is usually a seasonally challenging period. Magee also reiterated a Hold rating on Hibbett.

PRICE ACTION

In Monday afternoon trading, shares of Hibbett have dropped about 31% to $13.52, while Foot Locker and Under Armour have slipped about 4% and 2%, respectively. Dicks Sporting Goods has also slid almost 6% to $35 per share.

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Goldman Sachs Shares Continue to Decline due to Weak FICC Revenue

Goldman Sachs gets second downgrade after earnings

Goldman get second downgrade following earnings. See Stockwinners.com Market Radar

Shares of Goldman Sachs (GS) are sliding after UBS analyst Brennan #Hawken downgraded the stock to Neutral as he has “limited confidence” in a revenue recovery.

Last week, his peer at Keefe Bruyette also cut the stock’s rating to Market Perform, citing his view of its weakening revenue outlook following the investment bank’s second quarter results.

MOVING TO THE SIDELINES

In a research note to investors this morning, UBS’ Hawken downgraded Goldman Sachs to Neutral from Buy and cut his price target on the shares to $230 from $255 as the market seems to be pricing an inflection in their FICC revenues despite the recent weakness, suggesting a recovery is needed to justify 2018 consensus.

#FICC – the group within an investment bank that handles fixed income instruments, currencies, and commodities.

While the analyst recognized recent weak results could rebound, he believes a recovery in trading revenues would need to be substantial as he estimates a roughly 25% rebound in FICC revenues is implied in 2018 consensus estimates.

Further, trading could rebound but that has not happened over the past year for Goldman Sachs absent a surprise event such as #Brexit or the Trump election, Hawken argued, adding that he has difficulty relying on such an event to justify a bullish thesis.

The analyst told investors there are “better opportunities,” such as Morgan Stanley (MS).

On July 19, Keefe Bruyette analyst Brian #Kleinhanzl had also downgraded Goldman Sachs to Market Perform from Outperform, while lowering his price target on the shares to $230 from $260.

The analyst told investors in a research note of his own that he does not expect his previous Outperform thesis for a materially better revenue outlook to emerge near-term, partially due to market activity and partially due to weak performance by the company. Kleinhanzl pointed out that Goldman Sachs has become a “show-me stock,” and it would need to consistently outperform in FICC trading for more than one quarter in order for the analyst to become more constructive.

EARNINGS 

Last week, Goldman Sachs reported second quarter earnings per share of $3.95 and revenue of $7.89B, both above consensus of $3.39 and $7.52B. The company also said that net revenues in Fixed Income, Currency and Commodities Client Execution were $1.16B for the second quarter, 40% lower than the second quarter of 2016, due to significantly lower net revenues in interest rate products, commodities, credit products and currencies, partially offset by higher net revenues in mortgages.

PRICE ACTION

In Monday’s trading, shares of Goldman Sachs dropped 0.5% to $219 per share. Since the morning of its earnings report on July 18, Goldman shares have slid over 4%.

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Nektar Gets $150 Million from Eli Lilly

Eli Lilly and Nektar announce collaboration to develop NKTR-358

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Eli Lilly and Company (LLY) and Nektar Therapeutics (NKTR) have announced a strategic collaboration to co-develop NKTR-358, a novel immunological therapy discovered by Nektar.

NKTR-358, which achieved first human dose in Phase 1 clinical development in March, has the potential to treat a number of autoimmune and other chronic inflammatory conditions.

Under the terms of the agreement, Nektar will receive an initial payment of $150M and is eligible for up to $250M in additional development and regulatory milestones.

The parties will share Phase 2 development costs 75% Lilly and 25% Nektar.

Nektar will have the option to participate in Phase 3 development on an indication-by-indication basis.

Nektar has the opportunity to receive double-digit royalties that increase commensurate with their Phase 3 investment and product sales. Lilly will be responsible for all costs of global commercialization.

Nektar will have an option to co-promote in the U.S. under certain conditions. This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Lilly expects to incur an acquired in-process research and development charge to earnings in 2017 of approximately 9c per share. The company’s reported EPS guidance in 2017 is expected to be reduced by the amount of the charge. There will be no change to the company’s non-GAAP EPS guidance as a result of this transaction.

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WebMD Sold for $2.8 Billion in Cash

WebMD to be acquired by KKR in $2.8B deal for $66.50 per share

 

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WebMD Health (WBMD) and Internet Brands, a KKR (KKR) portfolio company, announced that Internet Brands has entered into a definitive agreement to acquire WebMD in a transaction valued at approximately $2.8B.

WebMD Health Corp. provides health information services to consumers, physicians and other healthcare professionals, employers, and health plans through its Websites, mobile platforms, and health-focused publications in the United States. Its primary portal, WebMD.com enables consumers to obtain information on health and wellness topics or on a particular disease or condition; assess personal health status; use online trackers, tools, and quizzes; locate physicians; receive periodic e-mailed newsletters and alerts on topics of individual interest; and participate in online communities with peers and experts.

Under the terms of the agreement, a subsidiary of Internet Brands will commence a tender offer in the next 10 business days to acquire all of the issued and outstanding shares of WebMD common stock for $66.50 per share to be paid in cash upon completion of the transaction.

This valuation represents a premium of approximately 30% to WebMD’s share price on February 15, the day before WebMD announced that it was commencing a process to explore and evaluate potential strategic alternatives, as well as a premium of approximately 20% over WebMD’s closing share price on July 21.

The financing for the transaction is fully committed.

The WebMD Board of Directors approved the merger agreement. The acquisition is expected to close during the fourth quarter of 2017, subject to the satisfaction of customary closing conditions.

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NeuroDerm Sold for $1.1 Billion Cash

NeuroDerm agrees to be acquired by Mitsubishi Tanabe Pharma for $39 a share

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NeuroDerm (NDRM) announced that it has signed a definitive agreement under which Mitsubishi Tanabe Pharma will acquire NeuroDerm for $39 per share in cash.

The transaction has received unanimous approval by NeuroDerm’s board and implies an equity value of approximately $1.1B.

NeuroDerm Ltd. engages in developing drug-device combinations for the treatment of central nervous system (CNS) disorders. The company’s levodopa and carbidopa (LD/CD) product candidates, which have completed Phase IIa clinical trial, include ND0612L and ND0612H for the treatment of patients with moderate and advanced Parkinson’s disease.

The offer of $39 per share in cash represents a premium of 79%over the unaffected price on June 9 of NeuroDerm’s ordinary shares on the Nasdaq Stock Market and a 17% premium over the closing stock price on July 21.

A special meeting of shareholders to approve the transaction is expected to be held this fall. Assuming typical regulatory and shareholder approval timeframes, NeuroDerm currently anticipates the transaction will close in Q4.

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British Open Should Bode Well for Under Armour

Watch Under Armour after Spieth wins British open

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Jordan #Spieth beat fellow American Matt #Kuchar by three strokes in a thrilling duel at Royal Birkdale on Sunday.

This was his third major title, with the 23-year-old going to the U.S. #PGA Championship needing only that title to complete the Grand Slam.

Spieth, who won the Masters and the U.S. Open in 2015, will turn 24 on Thursday, and therefore has become the second player to win three legs of golf’s Grand Slam before turning 24.

UNDER ARMOUR

Jordan Spieth is sponsored by Under Armour (UA, UAA), having first signed with the company in January 2013.

Two years later, the golf phenom and the sports apparel and footwear maker renegotiated a new, 10-year deal that assured no logos from Nike (NKE), Adidas (ADDYY) or any other competitor would appear on Spieth’s shoes or clothing until after the 2025 season, according to #ESPN.

The athlete’s Masters victory back in 2015 sent shares of Under Armour higher.

PRICE ACTION

Under Armour shares closed at $83.75 on April 10, 2015 and then closed at $85.11 on April 13, 2015, giving it a gain of $1.36, or 1.6%, on the day after that his Master’s win.

OTHERS TO WATCH

Golf goods retailers include Dick’s Sporting (DKS), which owns the Golf Galaxy brand, and Callaway Golf (ELY).

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Barron’s is Bullish on Leucadia, Sarepta and Flex, Bearish on Fiberoptic Makers, Retail

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue is bullish on several names. They include:

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Flex could rise 25% in a year – Flex (FLEX) is using robotics, machine learning, three-dimensional printing, and other next-generation technologies to transform itself into an everything factory, able to turn out not just consumer electronics but also medical equipment, sneakers, and car components, Jack Hough writes in this week’s edition of Barron’s. While the company’s business mix is changing, it still has ample exposure to PCs and smartphones, as well as companies like Apple (AAPL) and Lenovo (LNVGY), the report noted, adding that it expects Flex’s stock to rise another 25% or more over the coming year.

Leucadia shareholders to ‘finally’ see reward – Five years after Leucadia National (LUK) announced its merger with Jefferies Group, the combined company, and its shares, seem poised to prosper, Leslie Norton writes in this week’s edition of Barron’s. Despite an initial burst from $21 to $31 in the year following the deal, the shares succumbed shortly thereafter to the drop-in oil prices and oil-related junk bonds, which hurt Jefferies’ commodities and bond units, the publication noted, adding that both businesses have since revived, with some investors believing its shares could be worth $30 or more.

Aviation, defense stocks have ‘juicy yields – Some aerospace and defense stocks sport “nice yields,” not to mention impressive total returns in recent years, and “good opportunities” exist in companies that overlap like Boeing (BA), Lawrence Strauss writes in this week’s edition of Barron’s. Alongside Boeing, the report highlighted the yields of Lockheed Martin (LMT), United Technologies (UTX), Raytheon (RTN), L3 Technologies (LLL), General Dynamics (GD), Northrop Grumman (NOC) and Rockwell Collins (COL).

Upbeat sales news, guidance boost lift Sarepta shares – Sarepta’s (SPRT) shares surged last week after the company reported stronger than expected U.S. sales of its drug for Duchenne muscular dystrophy, or DMD, in the second quarter, while raising sales guidance for the year, Andrew Bary writes in this week’s edition of Barron’s. There could be more upside in the shares because of the significant sales potential for its DMD drug, Exondys 51, the report noted, adding that Sarepta looks like one of the “most promising smaller biotech companies.”

BEARISH NAMES

Amazon, others could be threat to fiberoptic markers – Amazon.com (AMZN), Alphabet (GOOGL;GOOG), Microsoft (MSFT), Apple (AAPL), and Facebook (FB) have all become the biggest and most important buyers of tech gear, with their influence changing the way fiberoptic components are being manufactured and distributed, Tiernan Ray writes in this week’s edition of Barron’s. The pace is so intense, and supplies have gotten so tight, that Amazon is bypassing traditional vendors and manufacturing the parts itself, the report note, adding that this could threaten companies like Applied Optoelectrics (AAOI), Lumentum (LITE) and Oclaro (OCLR) if other big techs follow. See Stockwinners’ blog about fiberoptic names.

Nothing is ‘Amazon-proof’  – Amazon’s (AMZN) deal with Sears (SHLD) to sell Kenmore appliances caused shares of Home Depot (HD), Lowe’s (LOW) and Best Buy (BBY) to tumble, Ben Levisohn writes in this week’s edition of Barron’s. Brick-and-mortar retailers like Macy’s (M) and Kohl’s (KSS) were the first victims of the rise of online shopping, while this year retailers once thought immune to the impact like O’Reilly Automotive (ORLY) and Advance Auto Parts (AAP) followed suit, the report noted, adding that when Amazon agreed to buy Whole Foods Market (WFM), it also caused shares of Kroger (KR) and Costco (COST) to sell off. “Nothing is Amazon-proof,” Levisohn argued.

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Humira Approved for Pediatric Patients with AU

AbbVie receives CHMP positive opinion for Humira for pediatric patients with AU

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AbbVie (ABBV) said that the European Committee for Medicinal Products for Human Use of the European Medicines Agency has granted a positive opinion for #HUMIRA for the treatment of chronic non-infectious anterior uveitis in pediatric patients from two years of age who have had an inadequate response to or are intolerant to conventional therapy, or in whom conventional therapy is inappropriate.

The #CHMP opinion is based on results from the SYCAMORE clinical trial, a randomized controlled study of the clinical effectiveness and safety of HUMIRA combined with methotrexate versus methotrexate plus placebo for the treatment of active JIA-associated uveitis.

It was sponsored by the University Hospitals Bristol NHS Foundation Trust and coordinated by the Clinical Trials Research Centre at the University of Liverpool.

The Independent Data Safety and Monitoring Committee recommended unmasking the trial early after 90 randomized patients with active JIA-associated uveitis showed that HUMIRA combined with methotrexate controlled ocular inflammation better and was associated with a significantly lower rate of treatment failure than placebo.

The review of the marketing authorization application is being conducted under the centralized licensing procedure.

A marketing authorization decision is anticipated by September.

If approved, the authorization will be valid in all 28 member states of the European Union, as well as Iceland, Liechtenstein and Norway.

HUMIRA was approved by the European Medicines Agency for the treatment of non-infectious intermediate, posterior and panuveitis in adults in June 2016.

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Amazon Investigated by FTC for Deceptive Pricing

FTC exploring possible deceptive discounting by Amazon

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The FTC is exploring allegations of potential deceptive discounting by Amazon (AMZN), Reuters reports, citing a source close to the investigation.

The FTC is investigating a complaint brought by Consumer Watchdog, an advocacy group which looked at around 1,000 products on Amazon’s website last month and found that Amazon put reference prices on about 46% of them; an analysis by Consumer Watchdog found that in more than half of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous three months, Reuters says.

The FTC is looking into the allegations as part of its review of Amazon’s proposed acquisition of Whole Foods (WFM).

Amazon said in a statement that Consumer Watchdog’s study was “deeply flawed,” calling the conclusions “flat out wrong.”

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RLJ Lodging Trust Says No to $3 Billion Purchase Offer

Blackstone made $3B offer to buy RLJ Lodging Trust, WSJ says

Blackstone Group (BX) made an approximately $3B offer to purchase RLJ Lodging Trust (RLH), which if successful would end the real estate investment trust’s plans to acquire FelCor Lodging Trust (FCH), the Wall Street Journal reports, citing people familiar with the matter.

RLJ disclosed that it had received an unsolicited proposal on June 12 from a private-equity firm but the company rejected the offer as “not reasonably likely” to be superior to its acquisition of FelCor, resulting in the private-equity firm twice raising its offer, which reached $25.50 a share on June 23, but then dropping its offer on July 6 to the original price of $24 following a review of RLJ, which rejected that offer.

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Zynerba is Worth Watching

Watch Zynerba ahead of trial data on its its ZYN002 for in adult epilepsy patients

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With #Zynerba Pharmaceuticals (ZYNE) expected to release data from a Phase 2 trial over the next several weeks,#Jefferies analyst Biren #Amin recently argued that a positive update could lead the shares north of $65-$75. However, a lack of treatment effect could drop the stock to $4-$5.

CANNABIDIOL GEL

Over the coming weeks, Zynerba is expected to announce data from its ZYN002 #cannabidiol, or #CBD, gel Phase 2 STAR 1 trial in adult epilepsy patients with refractory focal seizures.

ZYN002 is a synthetic CBD formulated as a permeation-enhanced gel for transdermal delivery.

BINARY EVENT

In a research note to investors, Jefferies’ Amin pointed out that the STAR-1 trial represents a “critical catalyst” for Zynerba as it provides the first proof of concept for transdermally delivered CBD.

Given investors naturally compare the program to GW Pharmaceuticals’ (GWPH) #Epidiolex, and oral CBD, the analyst believes a better comparison would be to therapies tested in patients with partial-onset seizures who are uncontrolled on their current therapy.

Additionally, Amin noted that while the study is designed for a 20% treatment effect over a placebo, an effect greater than 15% could be considered clinically relevant. A key question that remains unanswerable is the extent of activity observed with ZYN002 given this is the first study evaluating efficacy in epilepsy patients, he contended.

He told investors that positive data could lead to shares north of $65-$75, but a lack of treatment effect could drop shares to $4-$5. The analyst assumes ZYN002 is successfully developed and launched for refractory epilepsy in 2019.

Amin reiterated a Buy rating and a $32 price target on the shares.

PRICE ACTION

In Thursday’s trading, shares of Zynerba dropped 2% to $18.81. Over the last month the stock is up 10%, but over the last three months it has declined nearly 24%.

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