Zoe’s Kitchen sold for $300 million

Zoe’s Kitchen to be acquired by CAVA Group for $12.75 per share

Zoe's Kitchen sold for $300 million, Stockwinners
Zoe’s Kitchen sold for $300 million, Stockwinners

Zoe’s Kitchen (ZOES) announced that it has entered into a definitive agreement to be acquired in a transaction by privately held Cava Group, fast-growing Mediterranean culinary brand with 66 restaurants.

The combined companies will have 327 restaurants in 24 states throughout the U.S. Under the terms of the agreement, Zoes Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold.

This represents a premium of approximately 33% to Zoes Kitchen’s closing share price on August 16, 2018 and a premium of approximately 33% to Zoes Kitchen 30-day volume weighted average price ended on August 16, 2018, and an enterprise value of approximately $300M.

The acquisition of Zoes Kitchen will be financed through a significant equity investment in CAVA led by Act III Holdings, the investment vehicle created by Ron Shaich, founder, chairman, and former CEO of Panera Bread, and funds advised by The Invus Group, with participation from existing investors SWaN & Legend Venture Partners and Revolution Growth.

After closing, Brett Schulman, current CEO of CAVA, will serve as CEO of the combined company and will work closely with the existing leadership teams at Zoes Kitchen and CAVA to oversee their growth and evolution.

Ron Shaich will serve as Chairman of the combined company.

Consummation of the merger is subject to certain closing conditions, including the adoption of the merger agreement by the holders of a majority of the Company’s outstanding common stock, and the expiration or early termination of all applicable waiting periods under the HSR Act.

CAVA has agreed to pay to the Company a $17M termination fee if the merger agreement is terminated under certain circumstances and the merger does not occur.

The parties expect the merger to close in the fourth quarter of 2018.

Under the terms of the merger agreement, the Company is permitted to actively solicit, for a 35-day period, alternative acquisition proposals from potential buyer and business combination candidates.

There can be no assurance that any superior proposals will be received during this solicitation process or that any alternative transaction providing for a superior proposal will be consummated.

Except as may be required by law, the Company does not intend to disclose any developments with respect to such a solicitation process unless and until the Company’s board of directors determines that it has received a superior proposal. The Company would be required to pay to CAVA an $8.5M termination fee if the Company terminates the merger agreement to accept a superior proposal under certain circumstances. T

he Company’s Board of Directors has determined that the merger agreement with CAVA is fair to and in the best interests of the Company and the holders of the Company’s common stock.

Zoes Kitchen also announced that it will not hold its previously scheduled second quarter 2018 earnings conference call and web simulcast on the morning of Friday, August 17 and will not issue a press release with second quarter 2018 financial results.

The Company expects to file its quarterly report with second quarter 2018 financial results on or before August 20, 2018.


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Tribune Media terminates merger agreement with Sinclair Broadcast

Tribune Media terminates merger agreement with Sinclair Broadcast, files suit

Tribune Media terminates merger agreement with Sinclair Broadcast, Stockwinners
Tribune Media terminates merger agreement with Sinclair Broadcast, Stockwinners

Tribune Media (TRCO) announced that it has terminated its merger agreement with Sinclair Broadcast Group (SBGI), and that it has filed a lawsuit in the Delaware Chancery Court against Sinclair for breach of contract.

The lawsuit seeks compensation for all losses incurred as a result of Sinclair’s material breaches of the Merger Agreement.

In the Merger Agreement, Sinclair committed to use its reasonable best efforts to obtain regulatory approval as promptly as possible, including agreeing in advance to divest stations in certain markets as necessary or advisable for regulatory approval.

Instead, in an effort to maintain control over stations it was obligated to sell, Sinclair engaged in unnecessarily aggressive and protracted negotiations with the Department of Justice and the Federal Communications Commission over regulatory requirements, refused to sell stations in the markets as required to obtain approval, and proposed aggressive divestment structures and related-party sales that were either rejected outright or posed a high risk of rejection and delay-all in derogation of Sinclair’s contractual obligations.

Ultimately, the FCC concluded unanimously that Sinclair may have misrepresented or omitted material facts in its applications in order to circumvent the FCC’s ownership rules and, accordingly, put the merger on indefinite hold while an administrative law judge determines whether Sinclair misled the FCC or acted with a lack of candor.

As elaborated in the complaint we filed earlier today, Sinclair’s entire course of conduct has been in blatant violation of the Merger Agreement and, but for Sinclair’s actions, the transaction could have closed long ago.

“In light of the FCC’s unanimous decision, referring the issue of Sinclair’s conduct for a hearing before an administrative law judge, our merger cannot be completed within an acceptable timeframe, if ever,” said Peter Kern, Tribune Media’s CEO.

“This uncertainty and delay would be detrimental to our company and our shareholders. Accordingly, we have exercised our right to terminate the Merger Agreement, and, by way of our lawsuit, intend to hold Sinclair accountable.”


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Dun & Bradstreet sold for $6.9 billion

Dun & Bradstreet to be acquired by investor group for $145 per share cash

Dun & Bradstreet sold for $6.9 billion, Stockwinners
Dun & Bradstreet sold for $6.9 billion, Stockwinners

Dun & Bradstreet (DNB) announced that it has entered into a definitive merger agreement to be acquired by an investor group led by CC Capital, Cannae Holdings and funds affiliated with Thomas H. Lee Partners, L.P., along with a group of other distinguished investors.

Under the terms of the agreement, which has been unanimously approved by Dun & Bradstreet’s Board of Directors, Dun & Bradstreet shareholders will receive $145.00 in cash for each share of common stock they own, in a transaction valued at $6.9 billion including the assumption of $1.5 billion of Dun & Bradstreet’s net debt and net pension obligations.

The purchase price represents a premium of approximately 30% over Dun & Bradstreet’s closing share price of $111.63 on February 12, 2018, the last day of trading prior to Dun & Bradstreet’s announcement of a strategic review and an indication of its willingness to consider all options for value creation.

The transaction is expected to close within six months, subject to Dun & Bradstreet shareholder approval, regulatory clearances and other customary closing conditions.

The Dun & Bradstreet Board is unanimously recommending that shareholders vote to adopt the merger agreement at an upcoming special meeting of the shareholders.

Upon the completion of the transaction, Dun & Bradstreet will become a privately held company and shares of Dun & Bradstreet common stock will no longer be listed on any public market.

DNB closed at $122.80.


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Tesla’s going private is questioned by analysts

Tesla consolidates as analysts debate if Musk should take carmaker private

Shares of Tesla (TSLA) jumped yesterday after CEO Elon Musk said he would like to see the company go private, but have since stepped into negative territory as analysts debate the idea.

 

https://stockwinners.com/blog/
Tesla’s going private is questioned by analysts, Stockwinners
While Jefferies analyst Philippe Houchois believes going private “feels like the right thing to do,” his peer at Morgan Stanley questions the feasibility of Musk actually being able to achieve that goal.

TAKING TESLA PRIVATE

Yesterday, Tesla CEO Elon Musk tweeted that he is considering taking the electric carmaker private.

 

In an email to the company’s employees, the executive explained: “Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share. […] As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.”
Tesla gets a boost from Bud. See Stockwinners.com
Tesla’s going private is questioned by analysts

Meanwhile, members of Tesla’s board said on Wednesday that they have “met several times over the last week” and are “taking the appropriate next steps to evaluate” Musk’s desire to take the company private. Their talks with Musk, which started last week, included “discussions as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur,” the board members stated in a press release.

‘RIGHT THING TO DO’:

Commenting on the news, Jefferies’ Houchois told investors in a research note that the move “feels right” even if Musk is downplaying how supportive public markets have been. With Tesla unable to take on more debt, the analyst wonders who may fund the potential deal and end up as a new large shareholder. While the second quarter de-stressed the near-term outlook, Houchois pointed out that Tesla did not reassure about sustained demand for Model 3 at high prices and that profitability can support organic funding of investments in future products and manufacturing capacity.

He continues to think Tesla will need additional capital to fund these or risk being caught with a narrow and ageing product range within 2 years. Noting that his discounted cash flow fair value points to $300 per share, the analyst raised his price target on the stock to $360 from $250, “bridging the gap” to the $420 potential going private bid. The analyst reiterated a Hold rating on Tesla.

BUT WILL IT BE FEASIBLE?:

While Morgan Stanley analyst Adam Jonas sympathizes with Elon Musk’s argument that Tesla could be better off as a private company, he questions the feasibility of the CEO actually being able to achieve that goal.
Taking the company private would assume either that the company is on the verge of generating self-sustaining cash flows or that it can tap into a range of strategic sources of capital not previously at its disposal, said Jonas, who sees strategic value at Tesla, but thinks the “LBO math required to support [a price of] $420 is extremely aggressive.”
Tesla Model 3 named Popular Mechanics' Car of the Year
Tesla Model 3 named Popular Mechanics’ Car of the Year
The benefits of being private are outweighed by the risks of added financial leverage, which could be even more strategically limiting, added Jonas, who reiterated an Equal Weight rating and a $291 price target on Tesla shares.
Meanwhile, his peer at JPMorgan raised his price target for Tesla to $308 from $195 to reflect the possibility of the company going private. However, analyst Ryan Brinkman told investors that he still believes that Tesla’s valuation based on fundamentals alone “is worth no more than $195” per share.
The analyst added that he is not as certain as CEO Elon Musk on Tesla going private, and assigns only a 50% probability to such a scenario, while reiterating an Underweight rating on the shares.

PRICE ACTION:

In Wednesday afternoon trading, shares of Tesla have dropped 1.6% to $373.63.


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US Foods to acquire SGA’s Food for $1.8B

US Foods to acquire SGA’s Food group of Companies for $1.8B 

US Foods to acquire SGA's Food for $1.8B, Stockwinners
US Foods to acquire SGA’s Food for $1.8B, Stockwinners

US Foods (USFD) and Services Group of America announced that they have entered into a definitive agreement under which US Foods will acquire five operating companies collectively known as SGA’s Food Group of Companies, for $1.8B in cash.

The transaction has been unanimously approved by US Foods’ Board of Directors.

Headquartered in Scottsdale, Arizona, SGA’s Food Group of Companies has combined 2017 net sales of $3.2B and approximately 3,400 employees.

SGA’s Food Group of Companies currently operates as five separate operating companies.

US Foods will finance the acquisition primarily with $1.5B in fully committed term loan financing from J.P. Morgan and Bank of America Merrill Lynch and will fund the balance of the purchase price through its existing liquidity resources.

At the closing of the acquisition, US Foods’ pro forma net leverage is expected to be 4.1x.

Given the combined company’s strong cash flow generation, including synergies, US Foods expects to reduce net leverage to approximately 3.0x by the end of fiscal 2020. The acquisition is subject to regulatory approval and other customary closing conditions.

US Foods expects to achieve approximately $55M in annual run-rate cost synergies by the end of fiscal 2022, primarily driven by savings in distribution, procurement and administrative expenses.

The purchase price reflects a multiple of 12.5x SGA’s Food Group of Companies 2018E Adjusted EBITDA of $123 million, after taking into account the approximately $260 million estimated present value of cash tax benefits to be realized as a result of the acquisition. Including $55M in annual run-rate synergies, the price reflects a 2018E Adjusted EBITDA multiple of 8.6x.

Excluding amortization, the transaction is expected to become accretive to US Foods’ Adjusted EPS in the second full year following closing.

USFD closed at $40.60.


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Supervalu sold for $2.9 billion

United Natural Foods to acquire Supervalu for $32.50 per share in cash, or $2.9B

Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners
Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners

United Natural Foods (UNFI) and SUPERVALU (SVU) announced that they have entered into a definitive agreement under which UNFI will acquire SUPERVALU for $32.50 per share in cash, or approximately $2.9B, including the assumption of outstanding debt and liabilities.

UNFI expects to finance the transaction substantially with debt and Goldman Sachs provided committed financing in the transaction.

Over time, UNFI plans to divest SUPERVALU retail assets in a thoughtful and economic manner. Upon closing, UNFI’s net debt-to-EBITDA ratio is expected to be high.

With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by at least two full turns in the first three years.

The transaction has been approved by the boards of directors of both companies and is subject to antitrust approvals, SUPERVALU shareholder approval and other customary closing conditions, and is expected to close in the fourth quarter of calendar year 2018.

UNFI Chief Executive Officer and Chairman Steven Spinner will lead the combined entity. Sean Griffin, UNFI Chief Operating Officer, will lead the SUPERVALU integration efforts, post close and lead an integration committee comprised of executives from both companies to drive the implementation of best practices from each company and the delivery of important synergies and a rapid and smooth integration.

UNFI closed at $41.18.


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Synovus to acquire FCB Financial for $2.9B

Synovus to acquire FCB Financial for $2.9B

 

Synovus to acquire FCB Financial for $2.9B, Stockwinners
Synovus to acquire FCB Financial for $2.9B, Stockwinners

Synovus Financial Corp. (SNV) and FCB Financial Holdings, Inc. (FCB) jointly announced their entry into a definitive merger agreement under which Synovus will acquire FCB Financial Holdings, Inc., owner of Florida Community Bank.

The transaction is expected to close by the first quarter of 2019.

Following the closing, FCB will merge with Synovus Bank and operate under the Synovus brand, and FCB Financial Holdings President and CEO Kent Ellert will be executive vice president of Synovus and Florida market president.

Under the terms of the merger agreement, FCB shareholders will receive a fixed ratio of 1.055 shares of Synovus common stock for each common share of FCB in an all-stock transaction.

Based on Synovus’ closing share price on July 23, 2018, the transaction is valued at $58.15 per FCB share or $2.9 billion in aggregate.

Following completion of the merger, former FCB shareholders will own approximately 30% of the combined company. In addition, based on the exchange ratio, Synovus’ most recent quarterly dividend translates to a pro forma annualized dividend of $1.06 per FCB share.

The transaction is expected to be tax free to FCB shareholders. Synovus expects approximately $40 million in pretax synergies to be fully realized by 2020.

Excluding one-time charges, Synovus expects the acquisition to be approximately 6.5% accretive to earnings per common share in 2020 and to deliver strong returns on capital.

The transaction is expected to produce tangible book value per share dilution of 3.3% with an earnback period of less than two years.

The merger agreement has been unanimously approved by both companies’ Boards of Directors.

The merger is subject to customary closing conditions, including approval by Synovus and FCB Financial Holdings shareholders and approval by state and federal bank regulators. BofA Merrill Lynch and J.P. Morgan Securities LLC served as financial advisors to Synovus on this transaction, while Simpson Thacher & Bartlett LLP and Alston & Bird LLP served as legal advisors.

Sandler O’Neill + Partners L.P., Guggenheim Securities, LLC, and Evercore Group L.L.C. served as financial advisors to FCB Financial Holdings, and Wachtell, Lipton, Rosen & Katz served as legal advisor.


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 Apollo in talks to acquire LifePoint Health

Apollo in advanced discussions to acquire LifePoint Health

Apollo in advanced discussions to acquire LifePoint Health, Stockwinners
Apollo in advanced discussions to acquire LifePoint Health, Stockwinners

Apollo Global (APO) is in advanced talks to buy LifePoint Health (LPNT), two people familiar with the matter told Reuters on Friday.

The deal could value LifePoint at nearly $6B, including debt, the sources said, adding that Apollo plans to combine LifePoint with RegionalCare Hospital Partners, another regional hospital operator that it owns.

If the negotiations are completed successfully, a deal could be announced as early as next week, the sources said, cautioning that it was possible talks could fail at the last minute. The sources asked not to be identified because the matter is confidential.

Rural healthcare providers such as LifePoint have been challenged in recent years because their reliance on federal insurers such as Medicare and Medicaid has made them particularly vulnerable to changing reimbursement programs. In addition, hospital operating costs have been rising faster than reimbursement rate increases.

Apollo, which raised a $24.6 billion private equity fund last year, acquired RegionalCare in 2015, and merged it with another hospital operator, Capella Healthcare, in 2016.

It would be by far the biggest acquisition for Apollo this year. LifePoint currently has a market capitalization of $1.9 billion and long-term net debt of $2.9 billion.

LPNT closed at $47.90.


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PTC Therapeutics higher after acquiring Agilis Biotherapeutics

 PTC Therapeutics to acquire Agilis Biotherapeutics

PTC Therapeutics to acquire Agilis Biotherapeutics

PTC Therapeutics (PTCT)  announced that it has entered into an agreement to acquire Agilis Biotherapeutics.

The transaction was approved by the Boards of both companies. The transaction is expected to close in the third quarter of 2018, pending successful fulfillment of all customary closing conditions.

On completion, PTC plans a smooth transition of operations and the integration of Agilis’ talented and dedicated employees to continue the mission of bringing the pipeline of gene therapies for CNS disorders to patients worldwide.

Under the terms of the merger agreement, PTC will pay an upfront consideration of $50M in cash and approximately $150M in PTC common stock, subject to an estimated maximum 9.34M share limit (with any shortfall to be made whole with additional cash consideration). In addition to the upfront payments, potential future consideration includes $60M in development milestones to be paid over the next two years which includes the acceptance of a BLA.

Additionally, the transaction includes up to $535M in success-based milestones in connection with regulatory approvals on the three most advanced programs and receipt of a priority review voucher, as well as tiered commercial milestones of $150M, and 2-6 % of annual net sales for Friedreich ataxia and Angelman syndrome.

PTCT closed at $36.55, it last traded at $39.38.


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 EU ruling against Google seen as win for Amazon, Apple

EU antitrust ruling against Google seen as win for Amazon, Apple

 

 EU ruling against Google seen as win for Amazon, Apple, Stockwinners
EU ruling against Google seen as win for Amazon, Apple, Stockwinners

The EU has hit Alphabet-owned Google (GOOG; GOOGL) with a record antitrust fine for abusing the dominance of its Android mobile operating system.

Commenting on the decision, Baird analyst Colin Sebastian said he believes it to be a “pro-Amazon” (AMZN) ruling, benefiting the e-commerce giant and potentially Apple (AAPL) as well.

ANTITRUST FINE

The European Commission has fined Google EUR4.34B for breaching EU antitrust rules.

“Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search. Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company,” the Commission stated.

Google CEO Sundar Pichai, in response to the European Commission competition decision, stated that “rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them.

Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal.”

‘PRO-AMAZON’ RULING:

In a research note to investors, Baird’s Sebastian argued that the European Commission’s ruling against Google is “a bit misguided,” but likely a “relatively minor inconvenience” in the short and medium terms.

Longer-term, the analyst said he sees modest but not unexpected added risk from requirements to support forked versions of Android, and from the direct and/or indirect benefits of this ruling for Apple and Amazon. In practical terms, the EC is saying that Android users need to download the Google apps they want rather than have them pre-installed and implicitly instructs Google to make its apps available on forked-version of Android, even if those apps won’t work as well or as intended on modified operating systems, he contended.

Sebastian believes this ruling should have a limited direct impact on Google since it ostensibly does not force a change to the Google search algorithm and seems relatively straight-forward for Google to comply. However, the bigger issue may be the obvious benefits to Amazon and potentially Apple, he argued.

The analyst pointed out that while Amazon already generates about 50% of commerce and product-related searches, the EC will require Android users to take another step before they can access an alternative product search engine. Additionally, to force Google to support distribution of forked-versions of Android could directly benefit Amazon’s Fire devices, he highlighted.

Nonetheless, the analyst noted that the decision does not change his positive view on Alphabet and reiterated an Outperform rating and $1,300 price target on shares of Google’s parent company.

PRICE ACTION

In morning trading, Class A shares of Alphabet and Amazon are each fractionally lower. Meanwhile, Apple’s stock has dropped almost 1% to $190.12.


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Arconic higher following report of private equity interest

Arconic higher following report of private equity interest

Arconic higher following report of private equity interest, Stockwinners
Arconic higher following report of private equity interest, Stockwinners

Shares of Arconic (ARNC) are rising following a report that the aluminum producer has received interest from private equity firms including Apollo Global Management (APO).

PE  INTEREST

Arconic has received takeover interest from private-equity firms, including Apollo Global, The Wall Street Journal reported Friday.

A deal for the aerospace parts maker, which currently has a market value of $8.3B, could be worth over $10B, but no buyout agreement is imminent, the report said.

The company, which also holds $6.4B in debt, has a tumultuous recent history, facing an activist investor campaign from Elliott Management after being separated from the aluminum business now known as Alcoa (AA) in 2016.

The campaign led to the resignation of former Arconic Chief Executive Officer Klaus Kleinfeld and an overhaul of the company’s board.

In addition, the company came under scrutiny after investigators discovered its aluminum composite panels contributed to the spread of a fire last year at London’s Grenfell Tower that killed 80 people.

At the time, Arconic said it had no control over how its products were used in the building.

‘PLAUSIBLE LBO CANDIDATE’

Following the WSJ report, Morgan Stanley analyst Rajeev Lalwani said two things stand out to make Arconic a “plausible” leveraged buyout candidate: Its low EV/EBITDA multiple, which creates potentially favorable entry and exit points, and its cash flow profile, which has room for improvement.

The analyst stated that a more lean and efficient approach could support considerably better cash generation.

While the reported private equity interest “adds a level of intrigue,” Lalwani still believes headwinds within it rings and disks business, working capital and CapEx issues and volatility associated with aluminum prices will be the key driver of shares in the near-term.

Given the aforementioned execution concerns, Lalwani kept an Equal Weight rating and $20 price target on Arconic shares.

‘VERY VIABLE LBO CANDIDATE’

Credit Suisse analyst Curt Woodworth said he views Arconic as a “very viable” leveraged buyout candidate given its “highly depressed” multiples, operational and financial mismanagement, and “very strong” positions in automotive and aerospace end markets.

The analyst believes the issues at Firth Rixson are “very fixable” as the company is a new entrant into the disks market and said Arconic could be worth $24-$26 per share in a buyout. Woodworth has an Outperform rating on the shares with a $28 price target.

WHAT’S NOTABLE

On Monday, Arconic announced it had signed a new long-term contract with Boeing (BA) to supply aluminum sheet and plate for all models produced by Boeing Commercial Airplanes.

The multiyear contract, which extends and adds to the companies’ 2014 contract, is the largest to date and captures growth in the build rate increases of the Boeing 737 program.

PRICE ACTION

Arconic rose about 10%, or $1.73, to $19.12 in morning.


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Market higher at midday

Stocks on Wall Street were higher at midday as the S&P 500 rose above 2,800 for the first time since the middle of March.

Stocks on Wall Street were higher at midday as the S&P 500 rose above 2,800, Stockwinners
Stocks on Wall Street were higher at midday as the S&P 500 rose above 2,800, Stockwinners

The Dow has also been strong, though not much of that outperformance is due to JPMorgan (JPM) after the bank and several of its large peers kicked off earnings season with their reports this morning.

ECONOMIC EVENTS:

In the U.S., the June trade price report was mixed, with a weaker than expected 0.4% import price decline and a stronger than expected 0.3% increase in export prices.

The University of Michigan consumer sentiment survey was weaker than expected, falling 1.1 points to a 6-month low of 97.1 in the preliminary print for July. In Asia, China’s exports were strong in June, rising 11.3%, while imports fell a bit short of expectations with an increase of 14.1%.

COMPANY NEWS:

Shares of JPMorgan advanced fractionally after it started off this summer’s earnings season by reporting better than expected earnings for the second quarter. Of note, the bank’s CEO Jamie Dimon said he sees “good global economic growth, particularly in the U.S.”

Meanwhile, Wells Fargo (WFC) slipped 2% after reporting downbeat results for Q2, with the company noting in presentation slides that the third party review of customer accounts is “ongoing.”

Citi (C) shares also fell about 2% after its quarterly report, though the bank’s headline earnings for the quarter beat analysts’ estimates.

In addition, PNC Financial (PNC) reported better than expected results for the quarter and guided for third quarter net interest income to be up low-single digits…

Meanwhile, AT&T (T) was in focus after the U.S. Department of Justice said it plans to appeal the approval of the merger between AT&T and Time Warner. In an interview on CNBC this morning, AT&T CEO Randall Stephenson said that he doesn’t know exactly what the government basis will be for an appeal and that the move by the DOJ “changes nothing”.

Johnson & Johnson (JNJ) dipped about 1% after a Missouri jury awarded $4.69B to 22 women who alleged that use of J&J’s talcum powder products caused their ovarian cancer. The jury award includes $550M in compensatory damages and $4.14B in punitive damages against the company. J&J responded by saying it “intends to pursue all available appellate remedies.”

MAJOR MOVERS:

Among the noteworthy gainers was Biocept (BIOC), which surged 58% after it announced a provider agreement with Alliance Global FZ.

Also higher was Achillion (ACHN), which gained 13% after it said it began dosing in its Phase 1 trial of ACH-5548. Among the notable losers was Gogo (GOGO), which fell 11%, reversing last night’s afterhours gains following the company’s announcement of a strategic review.

Also lower was Ingredion (INGR), which dropped 11% after it announced a $125M cost savings program, provided lower than expected Q2 guidance, and cut its outlook for fiscal 2018.

INDEXES:

Near midday, the Dow was up 93.18, or 0.37%, to 25,018.07, the Nasdaq was up 13.35, or 0.17%, to 7,837.26, and the S&P 500 was up 4.74, or 0.17%, to 2,803.03.


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Zogenix sharply higher on data

Zogenix says primary endpoint achieved in second Phase 3 clinical trial of ZX008

Zogenix sharply higher on data, Stockwinners
Zogenix sharply higher on data, Stockwinners

Zogenix (ZGNX) reported positive top-line results from its second confirmatory Phase 3 study for its investigational drug, ZX008, for the treatment of children and young adults with Dravet syndrome.

Dravet syndrome is a rare, catastrophic, lifelong form of epilepsy that begins in the first year of life with frequent and/or prolonged seizures. Previously known as Severe Myoclonic Epilepsy of Infancy (SMEI), it affects one out of 15,700 individuals, 80% of whom have a mutation in their SCN1A gene.

The study results, which are consistent with those reported in Study 1, Zogenix’s first pivotal Phase 3 study, successfully met the primary endpoint and all key secondary endpoints, demonstrating that ZX008, at a dose of 0.5 mg/kg/day, is superior to placebo when added to a stiripentol regimen. Key Findings: Patients taking ZX008 achieved a 54.7% greater reduction in mean monthly convulsive seizures compared to placebo.

The median reduction in monthly convulsive seizure frequency was 62.7% in the ZX008 group compared to 1.2% in placebo patients. ZX008 also demonstrated statistically significant improvement versus placebo in both key secondary measures, including patients with clinically meaningful reductions in seizure frequency and longest seizure-free interval.

ZX008 was generally well-tolerated in this study with the adverse events consistent with those observed in Study 1 and the known safety profile of fenfluramine.

No patient exhibited cardiac valvulopathy or pulmonary hypertension at any time in the study.

Secondary endpoints assessed ZX008 compared to placebo in terms of the proportions of patients who achieved greater than or equal to 50% reductions and greater than or equal to 75% reductions in monthly convulsive seizures, as well as the median of the longest convulsive seizure-free interval.

ZX008 was generally well-tolerated in this study, with the adverse events consistent with those observed in Study 1 and the known safety profile of fenfluramine.

The incidence of treatment emergent adverse events was similar in both the treatment and placebo groups, with 97.7% of patients receiving ZX008 experiencing at least one treatment emergent adverse event compared to 95.5% of patients in the placebo group.

The most common adverse events in the ZX008 group were decreased appetite, diarrhea, pyrexia, fatigue, and nasopharyngitis.

The incidence of serious adverse events was similar in both the treatment and placebo groups, with 14% of patients in the ZX008 group experiencing at least one treatment emergent serious adverse event compared to 15.9% of patients in the placebo group. T

wo patients in the ZX008 group had an adverse event leading to study discontinuation compared to one in the placebo group.

ZGNX closed at $46.30, it last traded at $55.30.


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21st Century Fox boosts it’s offer for Sky

21st Century Fox boosts offer for Sky to GBP 14 or $32.5B 

21st Century Fox boosts it's offer for Sky , Stockwinners
21st Century Fox boosts it’s offer for Sky , Stockwinners

21st Century Fox (FOXA) and the Independent Committee of Sky PLC (SKYAY) announced that they have reached agreement on an increased recommended pre-conditional cash offer for the fully diluted share capital of Sky which Fox and its affiliates do not already own at a price of GBP 14.00 for each Sky share.

The price of GBP 14.00 per Sky share represents an increase of approximately 12% to the Comcast (CMCSA) offer price of GBP 12.50 per Sky share announced on April 25, Fox says in a statement.

Under the terms of the increased offer, Sky shareholders will be entitled to receive for each Sky share GBP 14.00 in cash.

The increased price includes an amount in lieu of a final dividend in respect of the financial year ended June 30, 2018.

It is intended that the acquisition will be implemented by means of a scheme of arrangement under applicable U.K. law.

The Sky Independent Committee announced that it intends to unanimously recommend that the Sky shareholders unaffiliated with 21st Century Fox vote in favor of the scheme and take no action in relation to the Comcast offer.

Fox currently anticipates that the acquisition will complete in Q3 of 2018.

Fox added that the Sky acquisition is not a condition to completion of the Disney (DIS) transaction.

Completion of the Sky acquisition will not affect the amount or form of consideration that stockholders of 21st Century Fox receive in the Disney deal, it said.

“We strongly believe that a combined 21CF and Sky will be a powerful driver for the continued growth and vibrancy of the UK and broader global creative industries.

The enhanced scale and capabilities of the combination will enrich Sky’s ability to continue on its mission for years to come, especially at a time of dynamic change in our industry.

This transformative transaction will position Sky so that it can continue to compete within an environment that now includes some of the largest companies in the world, but none of whom have demonstrated the same local depth of investment and commitment to the UK and to Europe,” added Fox.


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Celgene announces positive breast cancer data

Celgene announces IMpassion130 study meets co-primary endpoint of PFS

Celgene announces positive breast cancer data, Stockwinners
Celgene announces positive breast cancer data, Stockwinners

Celgene (CELG) announced that the Phase III IMpassion130 study met its co-primary endpoint of progression-free survival, or PFS.

This is the first phase III study to demonstrate a statistically significant PFS improvement in first-line metastatic or unresectable locally advanced triple negative breast cancer, or TNBC, a type of breast cancer with high unmet need.

Results demonstrated that the investigational combination of Tecentriq plus Abraxane compared to Abraxane monotherapy, as an initial treatment, significantly reduced the risk of disease worsening or death in patients with metastatic or unresectable locally advanced TNBC in the intention-to-treat and PD-L1 positive populations.

Overall survival is encouraging in the PD-L1 positive population at this interim analysis, and follow up will continue until the next planned analysis.

Safety in the Tecentriq plus Abraxane arm appeared consistent with the known safety profiles of the individual medicines, and no new safety signals were identified with the combination.

ABRAXANE is a microtubule inhibitor indicated for the treatment of:

Metastatic breast cancer, after failure of combination chemotherapy
for metastatic disease or relapse within 6 months of adjuvant
chemotherapy. Prior therapy should have included an anthracycline
unless clinically contraindicated.
• Locally advanced or metastatic non-small cell lung cancer (NSCLC),
as first-line treatment in combination with carboplatin, in patients who
are not candidates for curative surgery or radiation therapy.
• Metastatic adenocarcinoma of the pancreas as first-line treatment, in
combination with gemcitabine.

TECENTRIQ is a prescription medicine used to treat:

A type of bladder and urinary tract cancer called urothelial carcinoma.

  • TECENTRIQ may be used when your bladder cancer:
    • has spread or cannot be removed by surgery, and
    • you are not able to take chemotherapy that contains a medicine called cisplatin, or
    • you have tried chemotherapy that contains platinum, and it did not work or is no longer working.

CELG closed at $83.85.


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