Praxair to merge with Linde

Linde and Praxair produce and distribute industrial gases

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions

 

 

Linde (LNEGY) has signed a legally binding business combination agreement with Praxair (PX) governing the terms and conditions of a merger of equals between the two companies.

The agreement provides for a combination of the businesses of the Linde group and the Praxair group under a publicly traded new holding company, which will bear the Linde name.

The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the United Kingdom.

Group corporate functions will be appropriately split between Danbury, Connecticut and Munich, Germany.

The company will apply for an admission for the trading of its shares on the New York Stock Exchange and on the Frankfurt Stock Exchange and will seek inclusion in the S&P 500 and the DAX 30 indices.

Praxair will become a subsidiary of “New Holdco” through a merger and Linde will become a subsidiary of New Holdco through a public exchange offer to all shareholders of Linde.

Linde shareholders will be offered 1.54 shares in New Holdco for each Linde share and Praxair shareholders will receive one share in New Holdco for each Praxair share.

Upon completion, former Praxair shareholders and former Linde shareholders will each own approximately 50% of the outstanding shares of New Holdco. The membership in the board of directors of New Holdco will also be split 50:50.

Linde’s current Chairman of the Supervisory Board, Wolfgang Reitzle, will become Chairman of the new holding company’s board. Praxair’s current Chairman and CEO, Steve Angel, will become CEO and a member of the board of #NewHoldco.

The management team of New Holdco will also be appropriately split between #Linde and #Praxair executives.

The combined company is expected to benefit from approximately $1.2B in annual synergies and cost reductions, targeted to be achieved in approximately three years following closing. The figures include existing cost reduction programs already initiated by the two companies, including an amount of approximately $310 million from Linde’s existing LIFT program.

“Linde understands that the combined company intends to achieve the total amount of synergy and efficiency savings irrespective of the allocation to the respective underlying drivers,” the company noted.

The expected one-time costs of achieving these cost reductions and synergies are estimated to be approximately $1B including transaction costs. The consummation of the business combination is subject to certain conditions, including the acceptance of the exchange offer to Linde shareholders by a minimum of 75% of the outstanding Linde shares. Closing of the transaction is expected to occur in the second half of 2018.

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Palo Alto Results Lift Cyber Security Stocks

The company’s revenue came in at $432M, versus the consensus outlook of $412M

The company provided Q4 EPS guidance of 78c-80c, versus expectations of 74c

 

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The shares of Palo Alto (PANW) are climbing, and lending a boost to some peers, after the IT security company last night reported stronger than expected third quarter results and provided fourth quarter profit guidance that exceeded expectations.

A number of analysts were more upbeat about Palo Alto in the wake of its results.

RESULTS:

Palo Alto reported third quarter earnings per share, excluding certain items, of 61c, versus the consensus outlook of 55c. The company’s revenue came in at $432M, versus the consensus outlook of $412M.

“We reported record revenue…in our fiscal third quarter and added the second highest number of new customers in the company’s history,” said Palo Alto CEO Mark McLaughlin.

The company $PANW provided fourth quarter EPS guidance, excluding some items, of 78c-80c, versus the consensus outlook of 74c.

ANALYST REACTION:

Palo Alto’s business metrics “improved modestly” last quarter compared with the previous quarter, wrote #Jefferies analyst John #DiFucci. The company’s recent slowdown was primarily caused by the stage of its product cycle, the analyst stated. He thinks that the company’s Q4 guidance is “likely prudent” and could be conservative. DiFucci raised his price target on the name to $155 from $150 and kept a Buy rating on the stock.

#Gabelli analyst Hendi #Susanto upgraded Palo Alto Networks to Buy, saying the positive Q3 report increased confidence of its sales reorganization execution trajectory.

Palo Alto’s results were “just what it needed to turn the tide…after a rough couple of quarters,” wrote #JPMorgan analyst Sterling Auty. The fact that the company’s Q3 product revenue beat expectations by about $18M makes it Q4 guidance look more realistic, #Auty believes. The results should be a relief to investors who were worried that the company’s slowdown did not bode well for others in the space, the analyst added. Yesterday’s results indicate that Palo Alto’s previous troubles were caused by sales execution and were “company specific, ” he stated. However, Auty kept a Neutral rating on the stock.

OTHERS TO WATCH:

Other publicly traded companies in the space include Barracuda (CUDA), Check Point (CHKP), F5 Networks (FFIV), FireEye (FEYE), Fortinet (FTNT), Imperva (IMPV), Proofpoint (PFPT), Qualys (QLYS) and Symantec (SYMC).

PRICE ACTION: In Thursday’s trading, Palo Alto jumped 15.6% to $137.09.

Short Squeeze In Progress

Note that some of the price increase in PANW is due its high #short ratio. As of last May 15th, a total of 7,988,200 shares have been sold short which give the stock a short ratio of about 4 days.

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Dakota Access Pipeline Begins Carrying Oil

The “Bakken Pipeline” begins carrying oil

The Bakken Pipeline is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

 

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Bakken Pipeline is a 1872 mile, 30-inch diameter line

Energy Transfer Partners (ETP) announced that the #DakotaAccess Pipeline and the Energy Transfer Crude Oil Pipeline, collectively the “Bakken Pipeline,” are in commercial service under the Committed Transportation Service Agreements through their respective pipeline systems.

The #Bakken Pipeline, owned by Dakota Access, LLC and Energy Transfer Crude Oil Company LLC, respectively, is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

The Bakken Pipeline is a joint venture between Energy Transfer Partners with a 38.25 percent interest, MarEn Bakken Company LLC with a 36.75 percent interest, and Phillips 66 (PSX) with a 25 percent interest.

MarEn is an entity owned by MPLX LP (MPLX) and Enbridge Energy Partners L.P. (EEP).

Dakota Access and ETCO, developed at a combined cost of approximately $4.78 billion have commitments, including shipper flexibility and walk-up, for approximately 520,000 barrels per day. This is up from 470,000 barrels per day due to the successful Supplemental Open Season held earlier this year that committed an additional 50,000 barrels per day.

The combined system is expandable to a capacity of approximately 570,000 barrels per day. The pipeline will transport light, sweet crude oil from North Dakota to major refining markets in a more direct, cost-effective, safer and more environmentally responsible manner than other modes of transportation, including rail or truck.

Energy Transfer Partners approved and announced the pipeline project on June 25, 2014. In October 2014, Phillips 66 acquired 25% stake in the project. Since then, the project has been controversial. The firm had to fight several lawsuits to secure right-of-way for the project. The company was sued by Indian tribes, Iowa farmers, and environmental groups. The U.S. Army Corp of Engineers ( #USACE ) got involved and the entire project became a political issue. On November 1, 2016, President #Obama announced his administration was monitoring the situation and had been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred.

On January 24, 2017, President Donald #Trump, in contrast to the Obama administration, signed a presidential memorandum to advance the construction of the pipeline under “terms and conditions to be negotiated.”

Energy Transfer Partners began loading the pipeline with crude oil by April 2017. A small, 84-gallon spill of crude oil occurred at a South Dakota pumping station on the route on April 6, 2017. With full operation, East Coast refineries reduced their orders for rail-delivered oil in May and June.

Crude oil last traded at $50.68 per barrel.

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Deere to acquire Wirtgen Groupin for $5.2B cash

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Deere to Buy Wirten Group for $5.2B

Deere & Company $DE has signed a definitive agreement to acquire the #Wirtgen Group, a privately-held German company that is a manufacturer worldwide of road construction equipment.

The purchase price for the equity is EUR 4.357 billion in an all-cash transaction. The total transaction value is approximately EUR 4.6 billion, or $5.2 billion based on current exchange rates, including the assumption of net debt and other consideration.

The Wirtgen Group had sales of EUR 2.6 billion in the year ending December 31, 2016.

Deere expects the transaction to be accretive to earnings per share and currently expects to fund the acquisition from a combination of cash and new equipment operations debt financing.

The Wirtgen Group has a global footprint with approximately 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers.

Deere (DE) plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network.

The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations. The transaction has been approved by Deere’s Board of Directors.

The purchase is subject to regulatory approval in several jurisdictions as well as certain other customary closing conditions.

The companies said they expect to close on the transaction in the first quarter of Deere’s 2018 fiscal year.

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Crude Oil Higher on Supplies Drawdown

API reported a draw of 8.67 million barrels in U.S. crude oil inventories for last week

Gasoline inventories fell by 1.726 million barrels, Distillate inventories rose by 124,000 barrels

 

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Crude oil is higher following inventory data

For the week ending May 26, the American Petroleum Institute ( #API ) reported a draw of 8.67 million barrels in United States crude oil inventories, compared to analyst expectations of a draw of 2.8 million barrels.  Gasoline inventories fell by 1.726 million barrels, according to the API. #Distillate inventories rose this week by 124,000 barrels, while inventories at the Cushing, Oklahoma, site fell by 753,000 barrels.

It appears that refiners have been making gasoline in anticipation of the summer driving season. Whatever the reason for the drawdown, it is welcomed by producers. Oil prices have fallen this week, from WTI at $51.41 last week to $48.24 on Wednesday ahead of the API report. Brent traded at $50.68 ahead of the report—off from $54.11 this time last week.

WTI = West Texas Intermediate

The Vienne Group Decision

Last week, the Organization of Petroleum Exporting Countries, #OPEC, ministers meeting in Vienna produced an agreement to maintain production reduction of 1.8 million barrels per day for another nine months. The so-called Vienne Group, which is OPEC nations plus allied oil producing nations, most notably Russia, are hoping the move would support prices.  Saudi Arabia last week announced it would reduce oil exports by 15% to the US to manually adjust the inventory equation, in hopes of lifting prices.

Rig Counts Rise

Prices are pushed lower by continued rise in the domestic production and a rise in rig counts in the U.S. and Canada. The U.S. rig count rose 7 rigs last week to 915, with oil rigs up 2 to 722, gas rigs up 5 to 185, and miscellaneous rigs unchanged at 1. The U.S. Rig Count is up 511 rigs from last year’s count of 404, with oil rigs up 406, gas rigs up 98, and miscellaneous rigs unchanged. The Canadian Rig Count rose 8 rigs last week to 93, with oil rigs up 4 to 40 and gas rigs up 4 to 53. The Canadian Rig Count is up 50 rigs from last year’s count of 43, with oil rigs up 26, gas rigs up 25, and miscellaneous rigs down 1 to 0.

Five Weeks Drawdown

This week inventory number showed a significant draw in itself. The last five reporting weeks has seen a reduction of 19.277 million barrels, according to API data, and 15.9 million barrels using the Energy Department’s Energy Information Agency’s #EIA numbers. While the draw doesn’t offset the builds we saw in Q1 but drawdown trends from Q1 to Q2 cannot be ignored, and should be a positive sign for the industry.

EIA reports its inventory data on Thursday morning, delayed one day due to the Memorial Day holiday.

At last check, WTI was trading at $48.72 per barrel, up 42 cents. WTI has a 52-week trading range of $44.13 – $58.15. Brent last traded at $51.20 per barrel, up 44 cents. Brent has a 52-week trading range of $46.47 – $60.21 per barrel.

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Exact Sciences Higher on UnitedHealth News

Cologuard is a noninvasive, at-home screening test for colon cancer

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision

 

http://stockwinners.com
UnitedHealth to begin covering Cologuard July 1

 

EXACT Science ( $EXAS ) shares are climbing after health insurance giant UnitedHealth ( $UNH ) agreed to cover the company’s Cologuard test, starting July 1.

Cologuard is a noninvasive, at-home screening test for colon cancer. It is for adults 50 years or older who are at average risk for colon cancer, and it is available by prescription only.  As of March 2017, the list price of Cologuard was $649.

A number of analysts responded to the news by raising their price targets on EXACT Sciences.

TARGET INCREASES:

Canaccord analyst Mark #Massaro raised his price target on EXAS to $40 from $38.

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision, and a total of more than 227M people will be able to get reimbursed for the test by their insurers as of July 1, the analyst stated. The analyst expects the company’s 2017 revenue to come in at the high end of its 2017 guidance range of $195M-$205M, although he noted that the consensus outlook was $210M before yesterday.

He increased his 2020 earnings per share estimate for the company to 90c from 80c, but he believes that estimate could be conservative. The analyst kept a Buy rating on the stock and continued to identify it as a top pick.

#Benchmark analyst Raymond Myers increased his price target on Exact Sciences to $50 from $34 as he raised his 2018 test volume growth forecast for Cologuard to 55% from 50% and increased his revenue forecast per test to $470 from $440. He kept a Buy rating on the shares.

DEMAND SEEN AS STRONG: “Essentially” all major insurers now cover Cologuard and demand for the test should continue to be strong, according to William Blair analyst Brian Weinstein. By the middle of 2018, most major insurers should have deals with EXACT Sciences to cover the test for at least the $510 that Medicare is paying, the analyst predicted. He kept an Outperform rating on the stock.

Meanwhile, shot-seller site #Citron Research views UnitedHealth’s (UNH) coverage of Cologuard as a negative for Exact Sciences (EXAS), claiming Exact had to lower the price of the test, making it unprofitable.

PRICE ACTION: In morning trading, EXACT Sciences rose nearly 10% to $35.90.

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Avoid Bank Stocks, JP Morgan Chart Signals Sell

Bank stocks rose on prospects of tax-cuts but Trump’s problems have sidelined his agenda

Yield Curve is now Flattest since the Election rally began

 

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Head and Shoulders pattern on JP Morgan (JPM)

JP Morgan (JPM), the DJIA component, shares rose along with the rest of the market  following last year’s election on expectation of tax cuts and other pro-growth measures. But Trump has been embroiled in troubles, distracting him from his legislative agenda. Republicans are divided on key issues, including how much to cut and how to offset the lost revenue, if at all. Easing of bank regulations and oversight imposed by the Frank-Dodd Law appear to have taken backseat to the Russian and Comey investigations.

On a 1-year daily chart of  JPM stock chart there is a clear active bearish head and shoulders pattern that became active when price broke below the neckline at the $82 area.

Rising Rates

Economic growth spurs demand for loans, but it also encourages higher interest rates and wider spreads between banks’ short-term funding costs and long-term lending rates. Yield spreads widened after the election. But with the Federal Reserve raising short-term interest rates and the 10-year Treasury yield sliding toward 2017 lows, the yield curve is the flattest since the 2016 election. That’s bad news for banks’ net margins and not a comforting sign for the economy as a whole. It is widely expected that the FOMC will raise its key lending rate by 25 bp on June 9th.

Sector Troubles

JP Morgan is considered as one of the best operated large banks. If you add impact of other not-so-well-managed banks to the sector, you will realize that the Financial Select Sector ETF ( $XLF ) is heading lower.

This morning New York City Mayor Bill de Blasio and Comptroller Scott M. Stringer jointly announced that they will vote to prohibit New York City from entering into new contracts for deposits with Wells Fargo ( $WFC ). The beleaguered bank has lost many executives and customer over its various marketing schemes.  Shares of WFC are now in a well defined bearish downward pattern. Shares are trading well below their 200-day moving average #MA .

Bank of America ( $BAC ) announced that it expects to complete the sale of its consumer credit card business in the United Kingdom, #MBNA Ltd., to #Lloyds Banking Group (LYG). The sale is expected to improve #Basel 3 risk-based capital ratios by approximately 11 basis points under the Advanced approaches and 15 basis points under the Standardized approach in the second quarter ending June 30, 2017. The U.K. consumer credit card portfolio had approximately $9.4B in credit card receivables and earned $211M in interest income in the first quarter of 2017. This type of news should send BAC shares higher but BAC is down 2.7% and has broken below its support level of $23.

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McDonald’s to Offer Delivery

Delivery is now available at more than 2,000 McDonald’s locations

In June, 3500 MCD stores will offer delivery

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MCD to expand its delivery business

#McDonald’s ($MCD) will expand delivery of its food to 3500 stores in the U.S. by June. McDonald’s already has well-established delivery services in Asia and the Middle East, where for some restaurants delivery is 40 percent of sales. Last year, the DJIA component garnered nearly $1 billion in delivery sales globally.  McDonald’s CEO Steve Easterbrook said delivery will be available in 3,500 locations by June, up from the more than 2,000 locations that currently offer delivery.

In the U.S., 60 percent of delivery orders were placed in the evening or late at night, and arrived, on average, within 30 minutes, he said.

“We are encouraged by early results in the U.S. where delivery is resonating well, particularly with our younger customers,” Easterbrook said.

Delivery has become a key priority in fast food, but hiring a fleet of drivers can be a huge undertaking for chains. Companies like Uber and GrubHub ($GRUB) can help ease the financial burden on restaurants by acting as a third-party delivery service. The trade-off is the chain doesn’t have direct control over the employees making the deliveries.

Other fast food restaurants have adopted various ways to increase their sales. Domino’s Pizza (DPZ), the king of pizza delivery business, has been remodeling its stores to encourage diners to dine in its restaurants. It is expected that other fast food chains will join the delivery craze. Companies that are expected to offer delivery include Burger King (QSR) and Jack In the Box (JACK).

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Alnylam’s Givosiran receives FDA’s Breakthrough Therapy

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system

Givosiran was found to be generally well tolerated with no drug-related serious adverse events

ALNY-LOGO

Alnylam Pharmaceuticals $ALNY announced that it has received Breakthrough Therapy designation from the U.S. Food and Drug Administration for #givosiran, an investigational RNAi therapeutic targeting aminolevulinic acid synthase 1 for the prophylaxis of attacks in patients with acute hepatic porphyria.

“Promising results from the ongoing Phase 1 study of #givosiran demonstrating meaningful reductions in the occurrence of porphyria attacks formed the basis of the Breakthrough application,” the company says Updated results from this trial will be provided in an oral presentation on June 26 at the International Congress on Porphyrins and Porphyrias being held in Bordeaux, France.

The ongoing portion of the Phase 1 study of givosira is being conducted as a randomized, double-blind, placebo-controlled study.

Data presented at the 2016 American Society of Hematology meeting held in Atlanta demonstrated initial evidence for clinical activity with givosiran including meaningful reductions in both the number and frequency of porphyria attacks, as well as meaningful reductions in annualized hemin doses required in patients with acute intermittent porphyria, the most common and severe form of AHP.

In the first two dose cohorts, givosiran was found to be generally well tolerated with no drug-related serious adverse events. In the third dose cohort, which remains blinded, one death due to acute pancreatitis, considered unlikely related to givosiran or placebo, was reported after the data transfer date.

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system. The types that affect the nervous system are also known as acute #porphyria. Symptoms of acute porphyria include abdominal pain, chest pain, vomiting, confusion, constipation, fever, and seizures. These symptoms typically come and go with attacks that last for days to weeks. Attacks may be triggered by alcohol, smoking, stress, or certain medications. If the skin is affected, blisters or itching may occur with sunlight exposure.

The disease is usually inherited from a person’s parents and is due to a mutation in one of the genes that make heme. Some types are autosomal dominant and others are autosomal recessive. One type, porphyria cutanea tarda, may also be due to increased iron in the liver, hepatitis C, alcohol, or HIV/AIDS. The underlying mechanism results in a decrease in the amount of heme produced and a build-up of substances involved in making heme. Porphyrias may also be classified by whether the liver or the bone marrow is affected.  About 1 in 75,000 people have acute porphyria attacks. They may either have one of the acute porphyrias or they may have a mixed porphyria.

Separately,  the company announced that management will present a company overview at the #Jefferies 2017 Healthcare Conference on Tuesday, June 6, 2017 at 9:00 am ET in New York City.

PRICE ACTION:  ALNY closed at $64.09. The stock has a 52-week trading range of $31.38 – $80.11. Other stocks to watch: ICPT, AZN, INCY, BIIB.

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Deutsche Bank Fined $41 million by the Feds

The Federal Reserve Board announced a $41 million penalty against Deutsche Bank AG for anti-money laundering deficiencies

Deutsche Bank CEO encourages Europeans not to follow U.S. Mortgage Regulations

DB-LOGO

The Federal Reserve Board announced a $41M penalty and consent cease and desist order against the U.S. operations of #DeutscheBank $DB for anti-money laundering deficiencies. “The actions were taken by the Board to address unsafe and unsound practices at the firm’s domestic banking operations.

The Board identified failures by Deutsche Bank’s U.S. banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws,” the Federal Reserve said.

The consent order requires Deutsche Bank to improve its senior management oversight and controls related to compliance by the U.S. banking operations with anti-money #laundering laws.

Meanwhile, Deutsche Bank CEO John #Cryan pressured regulators in Europe to dismiss the same kind of rules for lenders’ mortgage holdings that have been adopted by their U.S.-based counterparts, Bloomberg reports, citing comments from Cryan at an investor conference in New York.

“By and large, Germans pay their debts” and aren’t close to as a risky as U.S. banks and home-buyers have been in the past, Cryan said, according to Bloomberg.

“For Europe to surrender, to accept U.S. mortgage capitalization rules, I think would be inappropriate,” the Deutsche Bank CEO said. “So to price them as though they were Californian subprime mortgages from 10 years ago is not appropriate.”

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Gilead HIV Success Shields it Against Patent Loss, Competition

The bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events”

Analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline

 

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#Gilead (GILD) announced Tuesday that its latest #HIV treatment candidate met its primary goal in four late-stage studies, showing “non-inferiority” against existing regimens, including a competitor from GlaxoSmithKline (GSK).

By definition, a #non-inferiority trial aims to demonstrate that the test product is not worse than the comparator by more than a small pre-specified amount. This amount is known as the non-inferiority margin, or delta.

Wall Street analysts largely cheered the news and said it could be key in preserving Gilead’s spot in the HIV treatment arena.

BACKGROUND: Gilead announced Tuesday morning that four Phase 3 studies evaluating its #bictegravir in combination with the already-approved emtricitabine/tenofovir in HIV patients met their primary goals of “non-inferiority” against existing regimens, including GlaxoSmithKline’s #Tivicay.

On the safety front, the bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events.” The company noted that it plans an New Drug Application (NDA) submission in Q2, with a Marketing Authorization Approval (MAA) filing in Europe following in Q3.

CITI SEES POTENTIAL FIRST CHOICE FOR PHYSICIANS: #Citi analyst Robyn #Karnauskas says today’s data are “key” to the long-term health of Gilead’s HIV franchise and could make the bictegravir regimen the first choice among physicians, adding that a 1Q18 launch of the bictegravir regimen looks “likely” now. While cautioning that Gilead’s announcement did not include comment on drug superiority or detailed efficacy metrics, Karnauskas’ base case estimates about 25% of patients switching to the bictegravir combo, contributing roughly $6 per share to her discounted cash flow modeling.

JPMORGAN SAYS KEY TO HIV FRANCHISE: #JPMorgan analyst Cory #Kasimov is “generally encouraged” by Gilead’s announcement but “not entirely surprised” given the previous Phase 2 data. Kasimov thinks a 2018 launch, potentially with accelerated FDA review using one of the company’s priority vouchers, could be “key” to help the company maintain market share in the face of pending patent expirations as well as continued growth in GlaxoSmithKline’s Tivicay. Kasimov adds that he expects sales of the bictegravir product to peak around $5B by 2022.

LEERINK SEES POTENTIAL YEAR-END LAUNCH: #Leerink’s Geoffrey #Porges says the bictegravir news looks “in line” with both his and the company’s expectations: While the trials “do not appear to have shown statistical superiority,” they also didn’t bring new safety concerns. The analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline, potentially allowing for year-end approval and launch, adding that his forecast for the regimen eventually ramps to over $10B in global sales.

PRICE ACTION: Shares of Gilead showed volatility Tuesday, reaching highs near $64.75 before paring those gains into session close at $64.50. Meanwhile, GlaxoSmithKline $GSK gained 1.8% to $43.43.

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Blackstone to sell Logicor to China Investment

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

Blackstone originally considered steering Logicor to an IPO, Deal could be announced this week

If completed, the transaction would mark Europe’s largest-ever real estate deal. 

 

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China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

China’s sovereign wealth fund has reportedly moved ahead of rivals in the pursuit of the Logicor warehouse portfolio, after formal bids having been submitted by last Thursday.

CIC is now said to be scheduled to sign a deal for Blackstone’s (BX) giant’s 630 European distribution centers within the next two to three days. If completed, the transaction would mark Europe’s largest-ever real estate deal.

In March, Blackstone began shopping Logicor to institutional investors including CIC, #Singaporean warehouse group Global Logistics Properties (GLP), and a joint venture between Singapore’s #Mapletree Investments and #Temasek Holdings. The sale of the 146.4 million square foot warehouse platform would mark the biggest logistics property deal in history.

CIC is said to benefit from its close relationship with #Blackstone.  In January 2014, CIC purchased London’s Chiswick Park office complex from Blackstone for over $1.28  billion.

Blackstone originally considered steering Logicor to an IPO, but is reported to have shelved that option in favor of a trade sale, aggressively driving the bidding process forward over the past few weeks. A trade sale would potentially achieve a higher price while allowing Blackstone to dispose of the business in a faster and more efficient manner than an #IPO.

Logicor was founded by Blackstone’s real estate business in 2012 and has rapidly grown into one of Europe’s largest warehousing specialists, with modern logistics facilities in 17 countries across the continent. Investors continue to pile into the logistics real estate sector amidst a boom in online retail, soaring prices and relatively high yields compared to other property asset classes.

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

Ensco to buy Atwood Oceanics

Offshore driller Ensco to buy is rival Oceanis for $10.72 per shares

The combined company will have a market cap just shy of $7 billion

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Offshore driller Ensco Plc $ESV said it would buy smaller rival Atwood Oceanics Inc $ATW in an all-stock deal valued at about $839 million.

Atwood shareholders will receive 1.6 Ensco shares for each Atwood share.

The deal, which values each Atwood share at $10.72, represents a premium of 32.6 percent to the company’s Friday close.

Ensco expects to realize annual pre-tax expense synergies of approximately $65 million for full year 2019 and beyond. The combination is expected to be accretive on a discounted cash flow basis.

The transaction will join two leading offshore drillers – combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world`s most prolific offshore drilling basins.

The acquisition will strengthen Ensco`s position as the leading offshore driller with exposure to deep- and shallow-water markets that span six continents.  Upon closing, Ensco will add six ultra-deepwater floaters, including four of the most capable drillships in the industry, and five high-specification jackups. The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

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

Novartis could sell $50 billion of Assets

Novartis investors are concerned that assets sales that could raise roughly $50B may be used in another “unsuccessful mega deal”

A list of potential take over targets could also emerge from ASCO meeting being held in Chicago from June 2-June 6. We will keep an eye on CHRS, PBYI, ICPT, CLVS and NKTR

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#Novartis $NVS investors are concerned that assets sales that could raise roughly $50B may be used in another “unsuccessful mega deal,” like that of eye care giant Alcon, which the company bought for $52B in 2011, as Novartis seeks to fill holes in its cancer portfolio, Reuters reports, citing shareholders.

Novartis CEO Joe Jimenez said he is currently reviewing a sale of Alcon’s surgical devices and contact lens units, valuing the businesses at $25B-$35B, as well as disposing of a roughly $14B stake in Roche (RHHBY) and an over-the-counter venture with GlaxoSmithKline (GSK), worth $10B.

The American CEO is also considering disposal of a roughly $14 billion stake in cross-town rival Roche, as well as his over-the-counter (OTC) drugs venture with GlaxoSmithKline , worth some $10 billion.

To be sure, Jimenez has said Novartis’s M&A focus remains on smaller transactions, including lower-risk drug licensing deals, ranging up to $5 billion.

When Jimenez began his strategic review this year, he said “all options were on the table”. Sales have fallen nine quarters, necessitating a costly programme to arrest the fall.

Where rivals including Roche, Merck and Bristol-Myers Squibb have immuno-oncology drugs on the market for a range of cancers, Novartis has only investigational molecules in this hot new therapy area.

Speculation that Novartis might buy AstraZeneca $AZN sparked a brief jump in the AZN’s stock last year. There has also been talk of its interest in Bristol-Myers $BMY .

A list of potential take over targets could also emerge from ASCO meeting being held in Chicago from June 2-June 6. We will keep an eye on CHRS, PBYI, ICPT, CLVS and NKTR.

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

CardConnect Sold for $15 per share

Payments solution company #CardConnect $CCN agreed to be acquired by #FirstData $FDC for $15.00 per share in cash.

The transaction is expected to be modestly accretive to First Data’s EPS in the first full year post-closing

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CardConnect to be acquired by First Data

CardConnect CCN is a provider of payment processing and technology solutions and is one of First Data’s largest distribution partners. It processes approximately $26 billion of volume annually from about 67,000 merchant customers which are served by CardConnect’s large base of distribution partners. CCN closed at $13.65. FDC closed at $16.64.

First Data FDC will commence a tender offer to acquire all of the outstanding CardConnect common stock for a purchase price of $15.00 per share in cash. The aggregate transaction value is approximately $750 million, including repayment of CardConnect’s outstanding debt and the redemption of CardConnect’s preferred stock. First Data intends to fund the transaction with a combination of cash on hand and funds available under existing credit facilities.

First Data Corporation provides electronic commerce solutions for merchants, financial institutions, and card issuers worldwide. It operates through three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions. The Global Business Solutions segment offers retail point-of-sale merchant acquiring and e-commerce services; and mobile payment services and Webstore-in-a-box solutions, as well as its cloud-based Clover point-of-sale operating system. FDC has a market capitalization of $15.3 billion.

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