Changyou.com sold for $579M

Changyou.com enters into definitive agreement for going private transaction

Changyou.com (CYOU) announced that it has entered into a definitive Agreement and Plan of Merger with Sohu Game, an indirectly wholly-owned subsidiary of Sohu.com (SOHU), and Changyou Merger, a wholly-owned subsidiary of Sohu Game, pursuant to which the company will be acquired by the Sohu Group in an all-cash transaction implying an equity value of the company of approximately $579M.

Changeyou.com sold to Sohu, Stockwinners.com

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each Class A ordinary share of the company issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares, will be cancelled and cease to exist, in exchange for the right to receive $5.40 in cash without interest, and each outstanding American depositary share of the company, other than the ADSs representing the Excluded Shares, will be cancelled in exchange for the right to receive $10.80 in cash without interest.

Sohu buys Changeyou.com, Stockwinners

The Merger Consideration represents a premium of 82.4% to the closing price of the company’s ADSs on September 6, 2019, the last trading day prior to the company’s announcement of its receipt of the “going-private” proposal, and a premium of 70.1% to the average closing price of the company’s ADSs during the 30 trading days prior to its receipt of the “going-private” proposal.

The Sohu Group intends to fund the Merger primarily with debt financing.

The Sohu Group has delivered a copy of an executed debt commitment letter to the company pursuant to which Industrial and Commercial Bank of China Limited, Tokyo Branch will provide, subject to the terms and conditions set forth therein, an amount sufficient to fund in full the consummation of Merger and the other transactions related thereto.

The company’s board, acting upon the unanimous recommendation of a committee of independent and disinterested directors established by the board, approved the Merger Agreement and the Merger.

The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

Because the Sohu Group owns over 90% of the voting power represented by all issued and outstanding shares of the company, the Merger will be in the form of a short-form merger of Merger Co. with and into Changyou in accordance with section 233(7) of the Companies Law of the Cayman Islands, with Changyou being the company surviving the Merger.

Shareholder approval of the Merger Agreement and the Merger is not required.

The Merger is currently expected to close in Q2 of 2020. If completed, the Merger will result in the company becoming a privately-owned company wholly owned directly and indirectly by Sohu, its ADSs will no longer be listed on the Nasdaq Global Select Market, and the ADS program will be terminated.

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BeiGene drug wins FDA approval for rare form of lymphoma

The FDA granted accelerated approval to the capsules for treatment of adult patients with mantle cell lymphoma, who have received at least one prior therapy.

The U.S. Food and Drug Administration approved BeiGene Ltd’s lymphoma drug, accepting the Chinese drugmaker’s strategy of largely using data from trials held outside the United States to file for approval.

FDA granted accelerated approval to the capsules for treatment of adult patients with mantle cell lymphoma
FDA granted approval to the capsules for treatment of aduls with mantle cell lymphoma, Stockwinners

The company tested the treatment, Brukinsa, in 118 patients with mantle cell lymphoma enrolled in two studies. About three-quarters were Asian, 21% Caucasian, and between 10% to 15% were from the United States, BeiGene said.

The FDA granted accelerated approval to the capsules for treatment of adult patients with mantle cell lymphoma, who have received at least one prior therapy.

Mantle cell lymphoma is a rare, aggressive form of non-Hodgkin lymphoma, a blood cancer that most often affects men aged over 60. The company estimates between 3,000 and 4,000 new patients were diagnosed in the United States in 2015.

Last month, BeiGene (BGNE) and Amgen (AMGN) announced a global strategic oncology collaboration for the commercialization and development in China of Amgen’s XGEVA, KYPROLIS, and BLINCYTO, and the joint global development of 20 oncology assets in Amgen’s pipeline, with BeiGene responsible for development and commercialization in China.

In connection with the collaboration, Amgen said it will purchase a 20.5% stake in BeiGene for approximately $2.7B in cash at $174.85 per American Depositary Share, or ADS.

BGNE closed at $196.40.

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BeiGene shares soar on Amgen stake

Amgen to buy 20.5% stake in BeiGene for $2.7B at $174.85 per ADS

BeiGene (BGNE) and Amgen (AMGN) announced a global strategic oncology collaboration for the commercialization and development in China of Amgen’s XGEVA, KYPROLIS, and BLINCYTO, and the joint global development of 20 oncology assets in Amgen’s pipeline, with BeiGene responsible for development and commercialization in China.

Amgen takes 20% stake in BeiGene, Stockwinners

In connection with the collaboration, Amgen will purchase a 20.5% stake in BeiGene for approximately $2.7B in cash at $174.85 per American Depositary Share, or ADS.

Amgen will receive one seat on BeiGene’s Board of Directors.

Under the agreement, BeiGene will commercialize XGEVA, KYPROLIS and BLINCYTO in China for five or seven years, during which time the parties will equally share profits and losses.

Amgen enters Chinese market by taking stake in BeiGene, Stockwinners

Following the commercialization period, BeiGene will have the right to retain one product and will be entitled to receive royalties on sales in China for an additional five years on the products not retained; and XGEVA was approved in China in 2019 for patients with giant cell tumor of the bone and is in development for prevention of skeletal-related events in cancer patients with bone metastases.

Blincyto is indicated for acute lymphoblastic leukemia, Stockwinners

KYPROLIS is in late-stage development in China for patients with multiple myeloma, and BLINCYTO is in late-stage development in China as a treatment for adult patients with relapsed or refractory acute lymphoblastic leukemia.

Kyprolis is indicated for multiple myeloma , Stockwinners

BeiGene has agreed to jointly develop 20 Amgen oncology pipeline assets globally, which include targeted small-molecule agents such as AMG 510, a first-in-class investigational KRAS G12C inhibitor, as well as BiTE antibodies, for solid and hematologic malignancies; Amgen and BeiGene will co-fund global development costs, with BeiGene contributing up to $1.25B worth of development services and cash over the term of the collaboration.

BeiGene is entitled to receive royalties from global sales of each product outside of China, with the exception of AMG 510; For each pipeline asset that is approved in China, BeiGene will receive commercial rights for seven years from approval, during which time the parties will share equally in profits and losses.

BeiGene is also entitled to receive royalties from sales in China for five years after the seven-year commercial term; and BeiGene will also have the right to retain approximately one of every three approved pipeline assets, up to a total of six, other than AMG 510, for commercialization in China, during which time the parties will share in profits and losses.

The transactions have been approved by the boards of directors of both companies and are expected to close in the first quarter of 2020, subject to approval by a majority vote of BeiGene’s shareholders pursuant to the listing rules of the Hong Kong Stock Exchange, the expiration or termination of applicable waiting periods under applicable antitrust laws, and satisfaction of other customary closing conditions.

BeiGene has already received commitments from shareholders holding approximately 40% of its outstanding shares to vote in favor of the transactions.

BGNE closed at $138.34, last traded at $174.58.

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Altaba to dissolve itself

Altaba board approves plan of complete liquidation and dissolution

Altaba to dissolve itself, Stockwinners

Altaba (AABA) announced last night that the fund’s board of directors has approved the liquidation and dissolution of the fund pursuant to a plan of complete liquidation and dissolution, subject to stockholder approval.

Altaba Inc. is a non-diversified, closed-end management investment company based in New York City that was formed from the remains of Yahoo! Inc. after Verizon acquired Yahoo’s Internet business  The company that remained after the purchase changed its name to Altaba Inc. on June 16, 2017.

Verizon completed its acquisition of Yahoo!’s core internet business on June 13, 2017, and put the assets under a new subsidiary named Yahoo! Holdings within its newly created division, Oath.

The only Yahoo!-branded interest held by Altaba was its stake in the joint venture Yahoo! Japan but this stake has since been sold to SoftBank Group.

The fund intends to file a proxy statement with the U.S. Securities and Exchange Commission with respect to a special meeting of stockholders to seek stockholder approval of the liquidation and dissolution pursuant to the plan.

Altaba said the fund “has pursued a number of strategies with the goal of achieving its investment objective, including by repurchasing the shares, both in the open market and through an exchange offer of American Depository Shares of Alibaba Group Holding Limited (BABA) and cash for shares, the simplification of the fund through the disposition of assets other than its position in Alibaba and the resolution of certain actual and contingent liabilities, and through other means.

After carefully considering the risks, timing, viability and potential impact on the fund’s stockholders of additional strategies potentially available to the fund to achieve its investment objective, as well as the recommendation of management, and in consultation with the fund’s advisors, the board unanimously determined that the liquidation and dissolution pursuant to the plan is advisable and in the best interests of the fund and its stockholders.

” If the liquidation and dissolution pursuant to the plan is approved by the fund’s stockholders, the fund expects to sell or otherwise dispose of all of the remaining ordinary shares and ADSs of Alibaba held by the fund, other than Alibaba ADSs, if any, to be distributed in kind, and its equity interests in Excalibur IP, to the extent any such assets have not been sold or disposed of by the fund before the special meeting, Altaba stated.

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Top Stories for weekend of February 22

U.S. extends trade talk deadline with China

As a result of these very… productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1.

1. Using his Twitter account, President Donald Trump said that, “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.

Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”

2. Kraft Heinz (KHC) has tapped investment bank Credit Suisse to review options for its Maxwell House coffee business, which could include a potential sale, CNBC’s Lauren Hirsch reported, citing people familiar with the matter. Based off valuations for other sales of consumer brands, a sale could fetch a price of at least $3B, sources said.

3. While investors are cheering indications of progress being made toward a resolution of trade issues between China and the U.S., the battle for tech supremacy between the two global superpowers shows few signs of abating, Reshma Kapadia wrote in this week’s edition of Barron’s. Global chip makers remain highly reliant on China, which makes just 30% of the chips it actually needs, the publication noted.

Companies with revenue exposure to china include Qualcomm (QCOM), Micron (MU), Marvell Technology (MRVL), Broadcom (AVGO), NXP Semiconductors (NXPI), AMD (AMD), Maxim Integrated Devices (MXIM), Applied Materials (AMAT), Intel (INTC), Xilinx (XLNX), Skyworks (SWKS), Nvidia (NVDA), Analog Devices (ADI), Lam Research (LRCX), and KLA-Tencor (KLAC).

How to train your dragon top the box office, Stockwinners

4. Comcast (CMCSA; CMCSK) subsidiary Universal’s “How to Train Your Dragon: The Hidden World” won the weekend with a franchise-best launch of $55.5M from 4,259 theaters in North America, the top opening of the year so far. Overseas, the threequel earned another $34.7M from 53 market for a foreign total of $216.9M and $274.9M globally. The movie sports an audience grade of A and a 92% Rotten Tomatoes score.

5. Altria Group’s (MO) and WellCare Health (WCG) saw positive mentions in Barron’s, while Windstream (WIN) was mentioned cautiously.

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JA Solar goes private at $7.55 per share

JA Solar enters into definitive agreement for going private transaction

JA Solar sold for $7.55 per share. See Stockwiners.com for details

JA Solar (JASO) announced that it has entered into a definitive agreement and plan of merger with JASO Holdings Limited, JASO Parent Limited, a wholly owned subsidiary of Holdco, and JASO Acquisition Limited, a wholly owned subsidiary of Parent, pursuant to which the company will be acquired by an investor consortium in an all-cash transaction implying an equity value of the company of approximately $362.1M.

Pursuant to the terms of the Merger Agreement, at the effective time of the merger, each ordinary share of the company issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive $1.51 in cash without interest, and each American depositary share of the company, representing 5 Shares, will be cancelled in exchange for the right to receive $7.55 in cash without interest.

The merger consideration represents a premium of 18.2% to the closing price of the company’s ADSs on June 5, 2017, the last trading day prior to the company’s announcement of its receipt of a revised “going-private” proposal, and a premium of 17.2% to the average closing price of the company’s ADSs during the 3-month period prior to its receipt of a revised “going-private” proposal.

The Buyer Group comprises Baofang Jin, chairman and CEO of the company, Jinglong, a British Virgin Islands company of which Baofang Jin is the sole director, and/or its affiliates, and the other Rollover Shareholders.

The Buyer Group intends to fund the merger with a combination of debt and equity.

The Buyer Group has delivered an executed debt commitment letter to the company pursuant to which CSI Finance Limited, Credit Suisse AG, Singapore Branch and certain other parties will provide, subject to the terms and conditions set forth therein, a loan facility to fund the merger in the amount of $160M.

The company’s board, acting upon the unanimous recommendation of a committee of independent and disinterested directors established by the board, approved the Merger Agreement and the merger and resolved to recommend that the company’s shareholders vote to authorize and approve the Merger Agreement and the merger.

The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The merger is currently expected to close during the first quarter of 2018.


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