Cempra to Merge with Melinta Therapeutics

Cempra subsidiary to merge with Melinta Therapeutics

Cempra subsidiary to merge with Melinta Therapeutics. See Stockwinners.com Market Radar for details

Cempra (CEMP) and Melinta Therapeutics announced that the companies have entered into a definitive agreement under which Melinta will merge with a subsidiary of Cempra.

The merger is expected to create a NASDAQ-listed company committed to discovering, developing and commercializing important anti-infective therapies for patients and physicians in areas of significant unmet need.

“The combined company’s extensive pipeline, including commercial, clinical and preclinical stage anti-infective programs with multiple products in development across several indications, provides an exceptional platform to deliver potential long-term growth and value for shareholders,” said David Zaccardelli, Pharm.D., acting chief executive officer of Cempra.

On a pro forma basis, and based upon the number of shares of Cempra common stock to be issued in the merger, current Cempra shareholders will own approximately 48 percent of the combined company and current Melinta shareholders will own approximately 52 percent of the combined company.

The transaction has been approved by the board of directors of both companies. The merger is expected to close in the fourth quarter of 2017, subject to the approval of the stockholders of each company as well as other customary conditions.

The combined company, which will be named Melinta Therapeutics, will bring together a deep bench of management talent from both companies. The board of directors of the combined company will have nine seats, with four appointed by Cempra and four appointed by Melinta, together with a newly appointed CEO.

Cempra and Melinta will work together through a joint selection committee to identify the CEO leadership of the combined company, who will be able to build on strong experience and the shared vision of the board to continue growing one of the world’s leading anti-infectives companies.

Melinta will designate the Chairman of the combined company board.

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Crude Oil Higher as Inventories Fall

Crude oil is higher as inventories fall

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The American Petroleum Institute (API) reported a draw of 7.839 million barrels in United States crude oil inventories, compared to analyst expectations of a draw of 2.272 million barrels for the week ending August 4.

The Energy Department will report its inventory data today at 10:30 a.m.

Gasoline inventories rose by 1.529 million barrels for the week ending August 4, compared to analyst expectations that inventories would fall by 1.5 million barrels.

Crude oil inventories in the US began its downward move in April, and have continued to fall, erasing all of the inventory that was built between January and April.

According to the API, yesterday’s build brings the total inventory for crude oil in 2017 to a net draw of 13.594 million barrels.

Distillate inventories rose by 157,000 barrels, while inventories at the Cushing, Oklahoma, site increased by 319,000 million barrels.

U.S. crude output will average 9.35 million barrels a day this year, according to the EIA’s monthly Short-Term Energy Outlook released Tuesday. That’s up from a July projection of 9.33 million. Production will average 9.91 million barrels a day next year, up from 9.9 million forecast previously.

Meanwhile, Iraq and the U.A.E. said at the Abu Dhabi meeting that OPEC’s estimates of their production — based on data from external sources — were at fault for any apparent failures to comply with output caps, according to two people familiar with the matter.

Crude prices have fluctuated around $49 a barrel this month as investors weigh rising global supply against output reductions from the Organization of Petroleum Exporting Countries and its allies. OPEC said Tuesday that Iraq, the United Arab Emirates and Kazakhstan, which have lagged behind in their pledged curbs, reaffirmed their commitment to cuts at a meeting in Abu Dhabi.

Crude oil (WTI) is up 35 cents to $49.52 pr barrel. Brent is up 36 cents to $52.50 per barrel.

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Supreme Industries Sold for $364 Million

Wabash to acquire Supreme Industries for $21 per share

Wabash to acquire Supreme Industries for $21 per share. See Stockwinners.com Market Radar for more

Wabash National (WNC) and Supreme Industries (STS) announced that they have entered into a definitive agreement under which Wabash National would acquire all of the outstanding shares of Supreme in a cash tender offer for $21 per share, which represents an equity value of $364M and an enterprise value of $342M.

The acquisition will combine Supreme’s extensive medium- and light-duty commercial vehicle portfolio, distribution network, and regional manufacturing locations with Wabash National’s advanced composite technologies, expertise in lean manufacturing and optimization, engineering and design proficiency and strong supplier relationships.

Wabash National expects to deliver at least $20 million in annual run-rate cost synergies by 2021.

The expected cost synergies are primarily driven by corporate and procurement expenditures, and operational improvement savings.

In addition, over time, Wabash National expects to achieve significant incremental revenue opportunities that neither company could obtain on a standalone basis. The board of Supreme, having determined that the offer and the merger are advisable, fair to, and in the best interests of Supreme and its stockholders, approved the agreement and plan of merger and the other transactions contemplated thereby, including the tender offer, and recommended that Supreme’s stockholders accept the offer and tender their shares in the offer when it is made.

The closing of the acquisition is expected to occur no later than the fourth quarter of 2017.

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Planet Payment is For Sale

Planet Payment Announces Exploration of Strategic Alternatives

Planet Payment announces exploration of strategic alternatives. See Stockwinners.com Market Radar for details.

Planet Payment (PLPM) announced that its Board of Directors, working together with its management team and legal and financial advisors, has commenced a process to explore and evaluate potential strategic alternatives focused on maximizing shareholder value.

These alternatives could include, among other things, the sale of the company, a merger with another party or other strategic transaction or continuing to execute on Planet Payment’s stand-alone business plan.

“Planet Payment’s Board of Directors is committed to fully evaluating appropriate strategic alternatives while simultaneously supporting the company’s management and employees in their ongoing efforts to deliver innovative products and outstanding service to our customers,” said Carl J. Williams, Chairman and CEO of Planet Payment.

“We believe that pursuing these complementary paths is in the best interests of our shareholders and is designed to maximize value.”

The Company’s Board has not set a timetable for this process nor has it made any decisions related to any specific strategic alternatives at this time.

There can be no assurance that the exploration of strategic alternatives will result in a transaction. The Company does not intend to provide any updates unless or until it determines that further disclosure is appropriate or necessary.

PRICE ACTION

PLPM closed at $3.17. It has a 52-week trading range of $2.75 – $4.64. It only trades about 120K per day.

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American Medical Response Sold for $2.4 Billion

Envision Healthcare to sell American Medical Response

Envision Healthcare to sell American Medical Response. See Stockwinners.com Market Radar to read more.

Envision Healthcare (EVHC) and an entity controlled by funds affiliated with KKR (KKR) have entered into a definitive agreement under which KKR’s portfolio company, Air Medical Group Holdings and Envision’s medical transportation subsidiary, American Medical Response, will combine to create a new industry leading medical transportation company. The transaction will be structured as a cash acquisition of AMR from Envision valued at $2.4B.

The combination of AMGH and AMR will create an integrated medical transportation company with the capability to serve patients across multiple transport modalities in the patient’s time of need.

The combined company is expected to transport more than five million patients per year through a fleet of air and ground ambulances across 46 states and the District of Columbia.

Upon completion of the transaction, the combined company will adopt a new name that reflects the unique capabilities of the two organizations. Following the closing of the transaction, AMR and AMGH will continue to support operations from two key leadership locations in Greenwood Village, CO, and Lewisville, TX.

The new company’s two divisions will continue to be led by strong leaders with extensive experience running medical transportation organizations.

The pending acquisition is subject to regulatory approval and customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in the fourth quarter of 2017.

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Rockwell Collins Could Be Sold for $145 a share

Rockwell Collins could be acquired for $145 per share

 

Rockwell Collins Could Be Sold for $145 a share. See Stockwinners.com Market Radar

After Reuters and Bloomberg reported that United Technologies (UTX) had made an unconfirmed bid to buy Rockwell Collins (COL), RBC Capital analyst Matthew McConnell estimates that Rockwell Collins could be acquired for $145 per share.

Shares of the maker of avionics and cabin interiors spiked in late trading on Friday after Bloomberg News reported United Technologies Corp. was considering buying the $19 billion company. The idea of a Rockwell Collins purchase isn’t new. Last year, Starboard Value reportedly pushed management to pursue a sale rather than proceed with a takeover of airplane seat-maker B/E Aerospace (that deal closed in April). But it’s jarring to see United Technologies thinking seriously about it.

The analyst says that the deal would strengthen United Technologies and has “ample strategic rationale,” although he notes that airplane makers have expressed opposition to similar deals in the past.

He adds that the deal “would move” United Technologies “up the technology curve” and enable it to enter the avionics business which he says has high barriers of entry.

#McConnell thinks that there is a 50% chance of a deal taking place and raised his price target on Rockwell Collins to $133 from $120. He keeps a Sector Perform rating on Rockwell Collins.

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United Therapeutics Is For Sale!

United Therapeutics rises on reports multiple buyers in pursuit

United Therapeutics Is For Sale! See Stockwinners.com Market Radar for details.

Shares of United Therapeutics (UTHR) are up following a report that multiple suitors are considering bids to purchase the biotech company.

WHAT’S NEW

GlaxoSmithKline (GSK) may be joining Gilead (GILD) and Novartis (NVS) in the race to buy United Therapeutics, which develops pulmonary arterial hypertension treatments, The Evening Standard reported.

Glaxo, which is thought to be being advised by Lazard and Citi, would face “stiff competition,” according to the report, as Gilead is thought to be the frontrunner.

Emma Walmsley, who became Glaxo’s CEO in April, said she is seeking smaller acquisitions of United’s size, but the company has also suggested it is looking to shift out of rare diseases. United could fetch up to $200 per share, or about $8.7B in total, the report said.

PRICE ACTION

United Therapeutics (UTHR) are up 7.6% to $136.68 in Friday afternoon trading.

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Genesis Energy to Buy Tronox Alkali Business for $1.33B in cash

Genesis Energy agrees to acquire Tronox Alkali Business for $1.33B in cash

Genesis Energy to Buy Tronox Alkali Business for $1.33B in cash. See Stockwinners.com Market Radar for details

Genesis Energy (GEL) announced that it has entered into a stock purchase agreement with a subsidiary of Tronox (TROX) to acquire all of Tronox’s trona and trona-based exploring, mining, processing, producing, marketing and selling business for approximately $1.33B in cash.

The Alkali Business is the world’s largest producer of natural soda ash, also known as sodium carbonate, a basic building block for a number of ubiquitous products, including flat glass, container glass, dry detergent and a variety of chemicals and other industrial products.

The Alkali Business produces approximately four million tons of natural soda ash per year, representing approximately 28% of all the natural soda ash produced in the world and, based on current production rates, has an estimated reserve life remaining of over 100 years.

Having been in continuous operations for almost 70 years, it sells its products to a broad, industry-diverse and worldwide customer base, including numerous long-term relationships.

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Jacobs Engineering to Buy Rival CH2M for $3.27 Billion

Jacobs Engineering to acquire CH2M in $3.27B transaction

 Jacobs Engineering to acquire CH2M in $3.27B transaction. See Stockwinners.com Market Radar to read more

Jacobs Engineering (JEC) and CH2M HILL Companies announced that they have entered into a definitive agreement under which Jacobs will acquire all of the outstanding shares of CH2M in a cash and stock transaction with an enterprise value of approximately $3.27B, including approximately $416M of CH2M net debt.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, CH2M’s stockholders will have the option to elect to receive either $88.08 in cash, 1.6693 shares of Jacobs common stock or a mix of $52.85 in cash and 0.6677 shares of Jacobs common stock subject to proration such that the aggregate consideration paid to CH2M stockholders will equal 60% cash and 40% Jacobs common stock.

Following the close of the transaction, CH2M stockholders will own 15% of Jacobs shares on a fully diluted basis based on the number of Jacobs shares outstanding. The transaction is not subject to a financing condition.

Jacobs expects to finance the $2.4B cash required for the transaction through a combination of cash on hand, borrowings under the Company’s existing revolving credit facility and $1.2B of new committed 3-year term debt arranged by BNP Paribas and The Bank of Nova Scotia.

Jacobs’ post-close liquidity is expected to remain robust at approximately $900M.

The transaction, which is expected to close in Jacobs’ fiscal 2018 first quarter, is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by CH2M stockholders.

Apollo Global Management (APO), which has an approximate 18% voting interest in CH2M, has agreed to vote in favor of the transaction.

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Private Payroll Rose 178K in July

U.S. ADP reported private payrolls increased 178k in July

 U.S. ADP reported private payrolls increased 178k in July. See Stockwinners.com Market Radar to read more

The 178k July ADP rise undershot the 185k private payroll estimate with a 190k total payroll increase, following a big 33k boost in the June rise to 191k from 158k that reversed the gap to the 187k private payroll rise in that month.

Analysts saw a lean 4k July goods employment rise despite still-firm factory sentiment readings, with gains of 6k for construction and 3k for mining but a 4k drop for factories, alongside a largely expected 174k service job gain.

The “as reported” ADP figures have overshot private payrolls in every month since the October methodology change except April and June, and perhaps now in August, to leave an average overshoot of a hefty 47k and an average monthly 2017 gain of 217k.

Analysts saw undershoots of 29k in June and 17k in April, though with a 94k interim overshoot in May, and prior overshoots of 204k in March, 76k in February, 42k in January, 3k in December, 38k in November, and 15k in October.

The ADP as-reported average absolute error since the 2016 methodology change is 58k, versus a 35k average absolute error for the survey median.

The Labor Department reports July’s job data on Friday August 4th.

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Exelixis to Present Data on its Cancer Drugs

The European Society for Medical Oncology Congress will be held in Madrid, September 8 – 12, 2017.

 

Exelixis says to present data from cabozanitinib, cobimetinib at ESMO

 

 Exelixis says to present data from cabozanitinib, See Stockwinners.com Market Radar to read more

Exelixis (EXEL) says to present data from #cabozanitinib, cobimetinib at ESMO Exelixis announced that data from clinical trials of cabozantinib and cobimetinib will be the subject of 10 presentations at the European Society for Medical Oncology 2017 Congress in Madrid, September 8 – 12, 2017.

Progression-free survival by independent radiology review and updated overall survival results from CABOSUN, a randomized phase 2 clinical trial of cabozantinib compared with sunitinib in patients with previously untreated advanced renal cell carcinoma, will be presented as a late-breaking abstract in the Genitourinary Tumours, Non-Prostate poster discussion session on Sunday, September 10.

Final data from the phase 1 study of cabozantinib in combination with nivolumab with or without ipilimumab for the treatment of metastatic urothelial carcinoma and other genitourinary malignancies will be presented in the Genitourinary Tumours, Non-Prostate oral presentation session on Saturday, September 9.

Additionally, poster presentations will detail the evaluation of cabozantinib in RCC and advanced penile squamous cell carcinoma, and of cobimetinib in combination studies in metastatic #melanoma.

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Vertex Says FDA approves Kalydeco for use in more than 600 people with CF

Vertex says FDA approves Kalydeco for use in more than 600 people with CF

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Vertex Pharmaceuticals (VRTX) announced that the U.S. FDA has approved #KALYDECO for use in more than 600 people with cystic fibrosis ages 2 and older who have one of five residual function mutations that result in a splicing defect in the cystic fibrosis transmembrane conductance regulator gene.

This approval was based on Phase 3 clinical data for KALYDECO in these mutations and follows the FDA’s approval of KALYDECO in May 2017 for 23 other residual function mutations, which was based on analyses of in vitro data.

Both approvals are supported by more than five years of real-world clinical experience that demonstrate KALYDECO’s established safety and efficacy profile.

RAISED GUIDANCE

Based on today’s approval, Vertex increased its guidance for 2017 KALYDECO product revenues to a range of $770M-$800M.

Vertex’s guidance range for total CF product revenues in 2017 is now $1.87B-$2.1B, including ORKAMBI guidance of $1.1B-$1.3B. KALYDECO is now approved in the U.S. to treat people with CF ages 2 and older who have one of 38 ivacaftor-responsive mutations in the CFTR gene.

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International Barrier Technology Sold for $22 Million

Louisiana-Pacific to acquire Int’l Barrier Tech for $22M

Louisiana-Pacific to acquire Int'l Barrier Tech for $22M. See Stockwinners.com Market Radar to read more

 

Louisiana-Pacific Corporation (LPX) announced it has entered into an arrangement agreement to acquire Watkins, Minn.-based International Barrier Technology Inc. (IBTGF) for $22M.

The agreement is for 100% of the shares of Barrier, a British Columbia company publicly traded on the TSX Venture Exchange, making Barrier a wholly owned subsidiary of LP.

International Barrier Technology Inc. develops, manufactures, and markets proprietary fire resistant building materials designed to protect people and property from the destruction of fire in the United States. The company uses non-toxic Pyrotite formulation that is used to coat wood panels and has application to engineered wood products, paint, plastics, and expanded polystyrene.

The transaction is subject to the approval of the Barrier shareholders and satisfaction of customary conditions, including court approval.

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Discovery to acquire Scripps for $14.6B

Discovery to acquire Scripps for $90 per share in cash and stock deal

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Discovery Communications (DISCA) and Scripps Networks Interactive (SNI) announced that they have signed a definitive agreement for Discovery to acquire Scripps in a cash-and-stock transaction valued at $14.6B, or $90 per share, based on Discovery’s Friday, July 21 closing price.

The purchase price represents a premium of 34% to Scripps’ unaffected share price as of Tuesday, July 18, 2017.

The transaction is expected to close by early 2018.

Combined, Discovery and Scripps will have nearly 20% share of ad-supported pay-TV audiences in the U.S. Additionally, the combined company will be home to five of the top pay-TV networks for women and will account for over 20% share of women watching primetime pay-TV in the U.S.

The combination is expected to create significant cost synergies, estimated at approximately $350M. The deal is expected to be accretive to adjusted EPS and to Free Cash Flow in the first year after close.

Scripps shareholders will receive $90 per share under the terms of the agreement, comprised of $63.00 per share in cash and $27.00 per share in Class C Common shares of Discovery stock, based on Discovery’s Friday, July 21 closing price. The stock portion will be subject to a collar based on the volume weighted average price of Discovery Class C Common Shares over the 15 trading days ending on the third trading day prior to closing.

Scripps shareholders will receive 1.2096 Discovery Class C Common shares if the Average Discovery Price is below $22.32, and 0.9408 Discovery Class C Common shares if the Average Discovery Price is above $28.70. If the Average Discovery Price is greater than or equal to $22.32 but less than or equal to $28.70, Scripps shareholders will receive a number of shares between 1.2096 and 0.9408 equal to $27.00 in value.

If the Average Discovery Price is between $22.32 and $25.51, Discovery has the option to pay additional cash instead of issuing more shares.

Scripps shareholders will have the option to elect to receive their consideration in cash, stock or the mixture described above, subject to pro rata cut backs to the extent cash or stock is oversubscribed. This purchase price implies a total transaction value of $14.6 billion, including the assumption of Scripps’ net debt of approximately $2.7 billion.

Post-closing, Scripps’ shareholders will own approximately 20% of Discovery’s fully diluted common shares and Discovery’s shareholders will own approximately 80%. Kenneth Lowe, Chairman, President & CEO, Scripps Networks is expected to join Discovery’s board following the close of the transaction.

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Barron’s is Bullish on Citi, Honeywell, Remains Bearish on Twitter

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

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Advance Auto Parts could rally 20%-30% in two years – Advance Auto Parts (AAP) stock’s valuation seems to discount a lot of bad news, while ignoring the potential for the company to boost profit margins and spur earnings growth in coming years, Vito Racanelli writes in this week’s edition of Barron’s. The shares could rally 20%-30% in the next two years, as earnings rise and the company demonstrates it can hold its own in the face of increasing online competition, he adds.

Citi could rise by 50% – At its first investor day since 2008, Citigroup (C) laid out some ambitious financial targets and Wall Street liked what it heard, Andrew Bary writes in this week’s edition of Barron’s. While the company’s shares finished the week up 2%, there could be more upside because Citi offers the combination of a low valuation and what could be the highest earnings growth rate among its peers in the years to come, Barron’s adds. The bank is targeting $9 a share in 2020 earnings, and suggested its stock could hit $100, 48% above the current level, Bary points out.

Honeywell (HON) shares could return 15% next year – If Darius Adamczyk, Honeywell’s new CEO, delivers as expected, the company’s revenue could rise 4% next year, and earnings, 10%, leading to a higher price/earnings ratio and a 15% total return for the shares, Lawrence Strauss writes in this week’s edition of Barron’s.

Blue Chips set to boost dividends – The third quarter is shaping up to be a ‘very strong one’ for dividend growth among blue-chip names, Lawrence Strauss writes in this week’s edition of Barron’s. IHS Markit expects Mondelez (MDLZ) to announce a 10.5% dividend increase and Intuit (INTU) to declare a hike of 15%, he says. Meanwhile, Microsoft (MSFT) is expected to raise its quarterly dividend by 10.3%, Royal Caribbean Cruises (RCL) to boost its quarterly payout by nearly 15%, Yum! Brands (YUM) to increase 13.3%, and Accenture (ACN) to boost payout by 10%, Barron’s points out.

BEARISH MENTION

Amazon.com, Alphabet to likely ‘cool off for a while,’ – Last week, Alphabet (GOOG; GOOGL) and Amazon (AMZN) beat quarterly sales expectations but showed underwhelming profit and it is not surprising investors would seize upon blemishes in the report as an excuse to take profits, Tiernan Ray writes in this week’s edition of Barron’s. While there is no fundamental weakness with either company, shares will probably show less upside in the rest of this year than in the first half, he notes.

Barron’s sees ‘no relief in sight’ for Twitter – Twitter (TWTR) is nearly as expensive as Facebook (FB), whose revenue and profit are galloping higher, based on next year’s projected earnings before interest, taxes, depreciation and amortization, Jack Hough writes in this week’s edition of Barron’s. That means Twitter must bounce back quickly, or get bought, or suffer a continuing stock-price decline, perhaps to single digits, Hough argues, adding that the first two outcomes are looking increasingly unlikely.

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