AbbVie commences self-tender offer for up to $7.5B of common stock
AbbVie to buyback $7.5 billion of its own shares
AbbVie (ABBV) announced that it has commenced a modified “Dutch auction” tender offer to purchase for cash up to $7.5 B of its common stock at a price not less than $99.00 per share and not more than $114.00 per share.
AbbVie stockholders may tender all or a portion of their shares at a price specified by the tendering stockholder within this range.
When the tender offer expires, AbbVie will determine the lowest price within the range of prices specified above that allows AbbVie to purchase up to an aggregate of $7.5B of its common stock.
The tender offer and withdrawal rights will expire at midnight Eastern Time, at the end of the day on May 29, 2018, unless extended or terminated by AbbVie.
Tenders of shares must be made prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer. Morgan Stanley & Co. is acting as dealer manager, and Wachtell, Lipton, Rosen & Katz is acting as legal advisor.
ABBV closed at $96.55. Shares have a 52-week trading range of $64.61 – $125.86.
This 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.
Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:
Stockwinners offers Barron’s review of stocks to buy
BULLISH MENTIONS:
Delta, GM look cheap, with growth potential – While a solid start to earnings season helped push share prices higher earlier this week, some remain deeply discounted, Jack Hough writes in this week’s edition of Barron’s. Despite Delta Air Lines’ (DAL) pessimistic valuation, consolidation has left only a handful of key players and the company faces less competition in key markets than some of its peers, the report adds. Additionally, Goodyear Tire (GT), General Motors (GM) and Lincoln National (LNC) also made the valuation cutoff, Hough says.
General Mills shares fall to ‘bargain territory.’ – General Mills (GIS) has fallen 27% so far this year and while the drop seems deserved because earnings growth has stalled, a closer look suggests sales trends are improving, thanks in part to new-product launches, Jack Hough writes in this week’s edition of Barron’s.
Cruise operators can offer ‘nice’ yields, solid dividend growth – Cruise operators, like Carnival (CCL), Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH), can offer nice yields and solid dividend growth, but economic downturns can pressure payouts, Lawrence Strauss writes in this week’s edition of Barron’s. Another option for investors looking for yield among cruise operators is Walt Disney (DIS), the report added. The entertainment company has a wide variety of holdings, and while its cruise business did not account for a large portion of its $55B of sales last year, it is not insignificant either.
Tech giants may make own custom chips to get edge on one another. – There has been a tension between the world’s largest tech companies- Alphabet (GOOG; GOOGL), Amazon (AMZN), Facebook (FB), Apple (AAPL), Microsoft (MSFT), Baidu (BIDU), and Alibaba (BABA)-and the chip companies they rely on, especially Intel (INTC) and Nvidia (NVDA), Tiernan Ray writes in this week’s edition of Barron’s. While the giants buy massive quantities of Intel’s microprocessors, and Nvidia’s graphics chips, or GPUs, to power their data centers, they are also in an arms race to have the best artificial-intelligence-based machine-learning functions, the report noted, adding that there was always the possibility they may decide to buy fewer off-the-shelf parts and make their own custom chips to get an edge on one another.
MPL valuations look cheap – Master limited partnerships’ valuations appear cheap, and U.S. energy production is thriving, lifting cash flows for pipeline firms, Darren Fonda writes in this week’s edition of Barron’s. MLP, such as Enterprise Products Partners (EPD), Magellan Midstream Partners (MMP), MPLX (MPLX), Plains All American Pipeline (PAA), could reward investors with higher yields as cash flows rise, Fonda adds.
OTHER MENTIONS
Trump’s tweets politicize U.S. markets, Barron’s says – With President Donald Trump, both politics and business appear personal as he continues his tweets aimed at individual companies, Vito Racanelli writes in this week’s edition of Barron’s. Before and after the election, he consistently aimed arrows at Amazon.com (AMZN) and at the proposed acquisition of Time Warner (TWX) by AT&T (T), the report noted. The President is not alone in singling out companies, Racanelli points out, adding that Democratic candidate Hillary Clinton also took issue with Mylan’s (MYL) price increases for its EpiPen. Maybe it is a sign of the times, but the rise of powerful social-media platforms is the key enabling factor, the report said.
This 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.
AstraZeneca announces FDA approval of Bydureon for use in T2D patients
FDA approves Bydureon for use in T2D patients
AstraZeneca (AZN) announced the FDA has approved BYDUREON for injectable suspension as an add-on therapy to basal insulin in adults with type 2 diabetes with inadequate glycemic control.
BYDUREON is approved for adults with T2D whose blood sugar remains uncontrolled on one or more antidiabetic medicines in addition to diet and exercise, to improve glycemic control.
The expanded use is based on results from the 28-week DURATION-7 study, which examined the effect of BYDUREON or placebo as add-on therapy to insulin glargine, with or without metformin, in adults with T2D.
Mean HbA1c was reduced by 0.9% in the BYDUREON group compared to 0.2% in the placebo group in patients with a mean baseline HbA1c of 8.5%.
Furthermore, 32.5% of patients in the BYDUREON group reached an HbA1c of less than 7.0% compared to 7.0% of patients in the placebo group.
There were no new safety findings in the DURATION-7 study.
Overall hypoglycemia was similar between the groups, with no reported major hypoglycemia.
In both arms, the same percentage of patients reported minor hypoglycemia. Like other GLP-1 receptor agonists, the risk of hypoglycemia is increased when BYDUREON is co-administered with insulin. Prescribers should consider lowering the dose of insulin when co-administering BYDUREON.
This 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.
Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:
Stockwinners offers Barron’s review of stocks to buy
BULLISH MENTIONS:
Barron’s lists potential takeover targets in cloud software – Shares of young cloud software companies like MongoDB (MDB) and SendGrid (SEND) have soared since the Nasdaq’s bottom on February 8, in part on speculation of a takeover, Barron’s Tiernan Ray contends. Takeover targets form a long list in addition to the aforementioned, and include Friday’s initial public offering Dropbox (DBX), Appian (APPN), Veeva Systems (VEEV), Atlassian (TEAM) and ServiceNow (NOW), Ray writes.
La-Z-Boy shares could rally 20% within a year or two – La-Z-Boy (LZB) shares currently trade at 13.8 times forecast earnings for the next 12 months, which is well below the small-cap Russell 2000 Index’s price/earnings ratio of 25, the Standard & Poor’s 500 index’s 17, and its own five-year average of 16.3 times forward earnings, writes Barron’s Brett Arend. He believes the stock, which closed Friday at $28.75, could merit a valuation of $36 per share, or roughly 20% higher, within a year or two “by simply getting back to its average five-year multiple.” Higher consumer spending, a new relationship to sell on Amazon.com (AMZN), and successful efforts to reach millennials could propel the shares even higher, Arend contends.
Time Warner shares look appealing with antitrust trial under way – Time Warner (TWX) investors face a “win-win” scenario with the antitrust trial for AT&T’s (T) proposed takeover now under way in Washington, Andrew Bary of Barron’s writes. Time Warner shares “look appealing, based on their underlying value and AT&T’s strong chances of winning,” Bary contends. He notes the stock closed Friday roughly $11 below the current value of AT&T’s cash and stock bid, worth $103.60 per share. The 12% deal spread is appealing with “many observers” believing AT&T and Time Warner will prevail over the U.S. government, according to Bary. He adds that while Time Warner shares could fall $5 if the government wins, some analysts think the stock will quickly recover to its current price of $92.57.
Interactive Brokers tops Barron’s list of best online brokers – Interactive Brokers (IBKR) sits atop Barron’s 23rd annual ranking of The Best Online Brokers. Interactive scored highly in trading experience, range of offerings, and portfolio analysis, Theresa Carey writes in a feature story for this weekend’s magazine. Interactive Brokers is followed by Fidelity, TD Ameritrade (AMTD), Charles Schwab (SCHW), TradeStation, Merrill Edge (BAC), E-Trade (ETFC) and tastyworks in Barron’s annual ranking.
Facebook may now be more tempting to investors – In its cover story titled “Facebook Comes Under Siege,” Barron’s says Facebook (FB) shares may be more tempting to investors following last week’s 14% decline. With more than 2B users, however, Facebook is “almost certain” to not walk away unscathed as the top target for privacy concerns, Jon Swartz writes. Nonetheless, with nearly $42B in cash and investments, Facebook has the flexibility to diversify into other business lines, as it did with Instagram and WhatsApp, Swartz adds.
This 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.
Humana, WellCare fall Cigna agrees to buy Express Scripts for $67B
Cigna to acquire Express Scripts for $67B.
Shares of Humana (HUM) and WellCare (WCG) are in the red after Cigna (CI) announced that it has agreed to acquire Express Scripts (ESRX) in a cash and stock transaction valued at about $67B.
Commenting on the news, Piper Jaffray argued that the deal makes it less likely in the near-term that Cigna would buy a Medicaid or Medicare Advantage plan.
EXPRESS SCRIPTS ACQUISITION:
Cigna and Express Scripts announced that they have entered into a definitive agreement whereby Cigna will acquire Express Scripts in a cash and stock transaction valued at approximately $67B, including Cigna’s assumption of approximately $15B in Express Scripts debt. The merger consideration will consist of $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share.
Upon closing of the transaction, Cigna shareholders will own approximately 64% of the combined company and Express Scripts shareholders will own approximately 36%. Upon closing, the combined company will be led by David Cordani as President and CEO. Tim Wentworth will assume the role of President, Express Scripts.
Express Scripts sold for $67B
MEDICAID, MA DEAL LESS LIKELY
Piper Jaffray analyst Sarah #James told investors that she does not foresee any issues with approval, even though a Cigna/Express Scripts combination would increase annual script volume to 848M, making it the third-largest pharmacy benefit manager.
However, the analyst noted that she does not expect Cigna’s script volume to transition over to a combined company until 2023 when its contract with UnitedHealth’s (UNH) OptumRx ends.
Nonetheless, James argued the deal makes it less likely that Cigna will buy a Medicaid or Medicare Advantage plan near-term, consistent with management’s softened language around using M&A to win long-term services and supports, or LTSS, contracts.
Two names that have been seen as potential targets in the sector are Humana and WellCare.
Humana, WellCare dip after Cigna buys Express Scripts
WHAT’S NOTABLE:
Some Wall Street analysts had previously seen Cigna as a potential takeover target for Amazon (AMZN) as they speculated what the next step would be for the e-commerce giant, especially following its health care venture with Berkshire Hathaway (BRK.A., BRK.B) and JPMorgan (JPM).
Humana, WellCare dip after Cigna agrees to buy Express Scripts
PRICE ACTION
In Thursday’s trading, shares of Cigna have plunged about 9.5% to $175.90, while Express Script’s stock has gained over 11% to $81.63.
Shares of Humana are fractionally down to $272.27, and WellCare’s stock has slipped almost 1% to $193.03.
This 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.
Cigna to acquire Express Scripts in cash, stock transaction for $67B
Cigna to acquire Express Scripts for $67B.
Cigna (CI) and Express Scripts (ESRX) announced that they have entered into a definitive agreement whereby Cigna will acquire Express Scripts in a cash and stock transaction valued at approximately $67B, including Cigna’s assumption of approximately $15B in Express Scripts debt.
The merger consideration will consist of $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share.
Cigna to acquire Express Scripts for $67B. Stockwinners
The transaction was approved by the board of directors of each company. Under the terms of the definitive agreement, the transaction consideration will consist of $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share, or $54 billion in the aggregate.
Upon closing of the transaction, Cigna shareholders will own approximately 64% of the combined company and Express Scripts shareholders will own approximately 36%.
The consideration represents an approximately 31% premium to Express Scripts’ closing price of $73.42 on March 7, 2018.
Upon closing, the combined company will be led by David M. Cordani as President and CEO. Tim Wentworth will assume the role of President, Express Scripts.
The combined company’s board will be expanded to 13 directors, including four independent members of the Express Scripts board.
The combined company will be named Cigna.
Cigna’s headquarters in Bloomfield, Connecticut, will become the headquarters for the combined company, and Express Scripts will be headquartered in St. Louis, Missouri.
At closing, the combined company will make an incremental investment of $200 million in its charitable foundation, to support the communities in which it operates, and with the continued focus on improving societal health.
Cigna intends to fund the cash portion of the transaction consideration through a combination of cash on hand, assumed Express Scripts debt and new debt issuance and Cigna has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The transaction is not subject to a financing condition.
Upon completion of the transaction, Cigna is expected to have debt of approximately $41.1 billion.
Cigna expects to have a debt-to-capitalization ratio of approximately 49% following the acquisition, and aims to achieve a ratio in the 30’s within 18 to 24 months after the transaction closes. Cigna expects to maintain its investment grade ratings.
The transaction, which is expected to be completed by December 31, 2018, is subject to the approval of Cigna and Express Scripts shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Until the closing, Cigna and Express Scripts will continue to operate as independent companies.
This 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.
Broadcom adjusts offer for Qualcomm to $79.00 per Qualcomm share
Broadcom proposes to buy Qualcomm for $79 per share.
Broadcom (AVGO) reaffirms its commitment to acquiring Qualcomm (QCOM), and is adjusting its offer following the Qualcomm board’s decision to transfer $4.10 per Qualcomm share (or $6.2B of value) from Qualcomm stockholders to NXP (NXPI) stockholders.
Broadcom is prepared to acquire Qualcomm for $79 per Qualcomm share, consisting of $57 in cash and $22 in Broadcom shares (premised on Qualcomm’s revised agreement to acquire NXP at $127.50 per NXP share).
In addition, Broadcom’s proposed merger agreement for Qualcomm would provide for an automatic increase of $3 in cash per Qualcomm share, or a total of $82 per Qualcomm share, consisting of $60 in cash and $22 in Broadcom shares, in the event that Qualcomm is unable to complete the NXP (NXPI) acquisition.
Broadcom’s proposed merger agreement otherwise remains unchanged, including the $8 billion regulatory reverse termination fee and 6% per annum (net of dividends) ticking fee accruing from and after the 12-month anniversary of the date of the merger agreement.
Broadcom believes that a responsible Qualcomm board could have preserved value by following ISS’s clear recommendation to work with Broadcom on the NXP transaction and negotiate the sale of Qualcomm to Broadcom.
Instead Qualcomm’s board acted against the best interests of its stockholders by unilaterally transferring excessive value to NXP’s activist stockholders.
Despite this direct value transfer, Broadcom remains committed to delivering a value-maximizing offer to Qualcomm stockholders.
Broadcom remains confident that Qualcomm’s stockholders will continue to support its proposal to acquire Qualcomm, and looks forward to concluding a transaction with this Qualcomm board of directors, or the newly elected Qualcomm board following its annual meeting on March 6, 2018.
Broadcom continues to urge Qualcomm stockholders to vote the entire BLUE proxy card “FOR” ALL SIX Broadcom nominees to show support for the Broadcom proposal.
This 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.
LyondellBasell (LYB) and A. Schulman (SHLM) announced that they have entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.
The acquisition builds upon LyondellBasell’s existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.
Under the terms of the agreement, LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.
LyondellBasell will purchase 100% of A. Schulman common stock for $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations.
In addition, the contingent value rights generally will provide a holder with an opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman’s Citadel and Lucent acquisitions. LyondellBasell is using cash-on-hand to finance the acquisition.
LyondellBasell expects to achieve $150M in run-rate cost synergies within two years, primarily by leveraging its well-established approach to cost discipline and productivity, as well as its culture of operational, business and commercial excellence.
Further, the acquisition is expected to be accretive to earnings within the first full year following close.
The combined businesses had revenues of $4.6B and adjusted EBITDA of $446M over the last 12 months.
The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders.
The acquisition is expected to close in the second half of 2018.
This 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.
Vertex’s Phase 2 study of NaV1.8 inhibitor VX-150 meets primary endpoint
Vertex reports positive Phase 2 results
Vertex Pharmaceuticals (VRTX) announced positive results of a Phase 2 study of the NaV1.8 inhibitor VX-150 in patients with acute pain following bunionectomy surgery.
Treatment with VX-150 showed statistically significant relief of acute pain compared to placebo, as determined by the time-weighted Sum of the Pain Intensity Difference over the first 24 hours of treatment, a standard measure of acute pain relief.
The study also included a standard-of-care reference arm of the commonly prescribed opioid medicine hydrocodone+acetaminophen to support the evaluation of a potential treatment effect for VX-150.
VX-150 was generally well tolerated, and there were no discontinuations for adverse events in any arm of the study.
This Phase 2 study is the second positive proof-of-concept study for VX-150 and provides further validation for the use of a NaV1.8 inhibitor for the treatment of pain.
A third Phase 2 study of VX-150 is currently ongoing in neuropathic pain with data expected in early 2019.
Vertex also recently initiated a Phase 1 study of a second NaV1.8 inhibitor, VX-128, in healthy volunteers.
The data announced were from a Phase 2 randomized, double-blind, placebo-controlled study that evaluated two days of treatment with VX-150, hydrocodone+acetaminophen or placebo in 243 patients with acute pain following bunionectomy surgery. 82 patients received placebo, 80 patients received VX-150 and 81 patients received hydrocodone+acetaminophen.
Hydrocodone+acetaminophen was included as a standard-of-care reference arm to enable better evaluation of a potential treatment effect for VX-150.
The reference arm was not included to make statistical comparisons to VX-150. VX-150 was dosed orally as 1500 mg for the first dose, followed by 750 mg every 12 hours over the 48-hour treatment period.
The primary endpoint of the study was the time-weighted Sum of the Pain Intensity Difference over the first 24 hours of treatment, as recorded on a Numeric Pain Rating Scale, for those treated with VX-150 compared to placebo.
Increases in SPID24 values represent improvements in pain relief. Secondary endpoints included safety and tolerability assessments as well as other efficacy measurements, including SPID over the first 48 hours of treatment for those treated with VX-150 compared to placebo.
Additional pre-specified analyses of other endpoints included SPID24 and SPID48 for hydrocodone+acetaminophen compared to placebo. The study met its primary endpoint, showing a statistically significant improvement in SPID24 for those treated with VX-150 compared to placebo.
The SPID24 values for those treated with VX-150 and placebo were 36.14 and 6.64, respectively. The SPID24 value for hydrocodone+acetaminophen was 40.16. In this study, VX-150 was generally well tolerated. More than 90 percent of patients in each arm of the study completed treatment.
There were no discontinuations due to adverse events and there were no serious adverse events in any arm of the study. The majority of adverse events were mild or moderate.
Adverse events were observed in 35 percent, 31 percent and 37 percent of patients who received placebo, VX-150 or hydrocodone+acetaminophen, respectively.
The most common adverse events were nausea, headache, vomiting and dizziness. Based on these data, Vertex plans to initiate a Phase 1 study of VX-150 using an intravenous formulation for the treatment of acute pain.
This study is planned to begin in the second half of 2018. An additional Phase 2 proof-of-concept study of VX-150 dosed orally is currently ongoing in patients with neuropathic pain caused by small fiber neuropathy.
Vertex expects to obtain data from the study in neuropathic pain in early 2019.
This 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.
Wynn Resorts CEO Steve Wynn steps down, Matt Maddox named CEO
Wynn Resorts CEO Steve Wynn steps down
Wynn Resorts (WYNN) released the following statements today regarding Chairman and CEO Steve Wynn:
The board of Wynn Resorts reluctantly announced that it accepted the resignation of Steve Wynn as CEO and Chairman of the board. The board has appointed Matt Maddox, currently President of the company, as its CEO, and Boone Wayson as Non-Executive Chairman of the board, effective immediately.
“It is with a collective heavy heart, that the board of Wynn Resorts accepted the resignation of our founder, CEO and friend Steve Wynn,” said non-executive director of the board Boone Wayson.
“Steve Wynn is an industry giant. He is a philanthropist and a beloved leader and visionary. He played the pivotal role in transforming Las Vegas into the entertainment destination it is today. He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent.”
Steve Wynn created modern Las Vegas. He transformed the city into an economic powerhouse by making it a world-wide tourist destination.
He designed, built and operated the most iconic resorts on the Las Vegas strip, beginning with the Mirage, then Treasure Island, the Bellagio, Wynn Las Vegas and Encore at Wynn Las Vegas.
Wynn Macau, Wynn’s first resort in the SAR of Macau in China, was designated by Forbes Travel Guide as the best resort in the world.
Along with Wynn Palace in Cotai, the company built by Steve Wynn has been recognized as having more Five Star awards than any independent hotel company in the world.
Wynn Resorts remains as committed as ever to upholding the highest standards and being an inclusive and supportive employer. In fact, more than 40% of all Wynn Las Vegas management are women; the highest in the gaming industry.
The company will continue to fully focus on its operations at Wynn Macau, Wynn Palace and Wynn Las Vegas; the development and opening of the first phase of Wynn Paradise Park, currently under construction on the former Wynn golf course; as well as the construction of Wynn Boston Harbor, which will open in June 2019.
Details of Mr. Wynn’s separation agreement will be disclosed when they are finalized.
Steve Wynn released the following statement: “In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity. As I have reflected upon the environment this has created – one in which a rush to judgment takes precedence over everything else, including the facts – I have reached the conclusion I cannot continue to be effective in my current roles.
Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.
The Wynn Resorts team and I have built houses of brick. Which is to say, the institution we created – a collection of the finest designers and architects ever assembled, as well as an operating philosophy now ingrained in the minds and hearts of our entire team – will remain standing for the long term. I am extremely proud of everything we have built at this company.
Most of all, I am proud of our employees. The succession plan laid out by the board and which I wholeheartedly endorse now places Matt Maddox in the CEO seat.
With Matt, Wynn Resorts is in good hands. He and his team are well positioned to carry on the plans and vision for the company I created. I want to thank all of the employees who have made Wynn Resorts the most admired resort company in the world, and for the support I have received from them in recent weeks.
Most importantly, I want everyone to continue to be proud of this company and the many unique ways it will forever continue to delight guests.”
WYNN closed at $163.22, it last traded at $176.34.
This 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.
Changes to S&P MidCap 400, S&P SmallCap 600 indices
Changes to S&P MidCap 400, S&P SmallCap 600 indices
S&P Dow Jones Indices will make the following changes to the S&P MidCap 400 and S&P SmallCap 600:
S&P SmallCap 600 constituent Boyd Gaming (BYD) will replace CalAtlantic Group (CAA) in the S&P MidCap 400, and Ring Energy (REI) will replace Boyd Gaming in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, February 13.
S&P 500 constituent Lennar (LEN) is acquiring CalAtlantic Group in a deal expected to be completed on or about February 12 pending final approvals.
James River Group Holdings (JRVR) will replace Barracuda Networks (CUDA) in the S&P SmallCap 600 effective prior to the open of trading on Monday, February 12.
Thoma Bravo is acquiring Barracuda Networks in a deal expected to be completed on or about that date pending final conditions.
EVERTEC (EVTC) will replace Sucampo Pharmaceuticals (SCMP) in the S&P SmallCap 600 effective prior to the open of trading on Wednesday, February 14.
S&P 500 constituent Mallinckrodt (MNK) is acquiring Sucampo Pharmaceuticals in a deal expected to be completed on or about that date pending final conditions.
This 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.
Broadcom raises bid for Qualcomm to ‘best and final’ offer of $82 per share
Broadcom proposes to buy Qualcomm for $82 per share
Broadcom Limited (AVGO) announced that it has made a “best and final” offer to acquire all of the outstanding shares of common stock of Qualcomm Incorporated (QCOM).
Under the terms of the offer, Qualcomm stockholders would receive an aggregate of $82.00 per each Qualcomm share, consisting of $60.00 in cash and the remainder in Broadcom shares.
Broadcom’s improved offer is premised on either Qualcomm acquiring NXP Semiconductors N.V. (NXPI) on the currently disclosed terms of $110 per NXP share or the transaction being terminated and is also premised on Qualcomm not delaying or adjourning its annual meeting past March 6, 2018.
Broadcom remains confident that the proposed transaction would be completed within approximately 12 months following the signing of a definitive agreement.
“The significantly improved offer, which has been unanimously approved by the Board of Directors of Broadcom, represents a 50% premium over the closing price of Qualcomm common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 56% to Qualcomm’s unaffected 30-day volume-weighted average price…Broadcom believes this offer is vastly superior to Qualcomm’s standalone prospects, with or without the closing of the NXP transaction, and remains hopeful the Qualcomm board of directors will act responsibly on behalf of Qualcomm stockholders and engage with Broadcom on this offer without further delay,” Broadcom stated.
This 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.
Alibaba Group (BABA) and Ant Small and Micro Financial Services Group announced that pursuant to 2014 transaction agreements, Alibaba will acquire a 33% equity interest in Ant Financial.
The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.
Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial. There will be no cash impact to Alibaba following completion of the transaction.
Upon closing, the companies will terminate the current profit-sharing arrangement under which Ant Financial pays royalty and technology service fees in an amount equal to 37.5% of its pre-tax profits to Alibaba.
Daniel Zhang, CEO of Alibaba Group, said, “This transaction is a significant step for Alibaba to enhance our long-term strategic relationship with Ant Financial as we continue to pursue our mission to make it easy to do business anywhere.
Importantly, an equity stake in Ant Financial enables Alibaba and our shareholders to participate in the future growth of the financial technology sector, as well as the benefits of user growth and improved customer experience.”
The transaction was reviewed and approved by a committee of non-executive directors, the majority of whom are independent under NYSE rules, the audit committee of Alibaba’s board and the full Alibaba board of directors.
The closing of the transaction is subject to customary conditions. Alibaba will acquire the equity interest in Ant Financial through a Chinese domestic subsidiary.
Morrison & Foerster and King & Wood Mallesons acted as legal advisors, Credit Suisse acted as financial advisor and PricewaterhouseCoopers acted as tax advisor to the Alibaba Independent Committee.
Wachtell, Lipton, Rosen & Katz, Sidley Austin LLP and Fangda Partners acted as legal advisors to Ant Financial.
This 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.
Boeing (BA) is scheduled to report results of its fiscal fourth quarter before the market opens on Wednesday, January 30, with a conference call scheduled for 10:30 am ET.
What to watch for:
1. GUIDANCE:
When Boeing reported its fiscal third quarter results on October 25, 2017, the company increased its fiscal 2017 adjusted earnings per share view to $9.90-$10.10 from $9.80-$10.00, against consensus estimates of $10.04 at that time, and reaffirmed its FY17 revenue expectations of $90.5B-$92.5B, against analyst estimates of $92.15B.
Current consensus estimates sit at $10.21 and $92.55B, respectively. The company also backed its FY17 commercial airplane deliveries view of 760-765.
2. CAPITAL RETURNS:
On December 11, 2017, Boeing announced a new $18B share repurchase program and a 20% increase to its quarterly dividend. The board declared the dividend will increase 20% to $1.71 per share.
The board also replaced the existing share repurchase program with a new $18B authorization. The new dividend will be payable March 2, 2018, to shareholders of record as of February 9, 2018.
Defense spending increase should help Boeing
The company this year has repurchased $9.2B worth of its shares from the $14B authorization approved in December 2016. The new repurchase program replaces the existing one, bringing the total authorization to $18B.
3. ANTI-DUMPING:
On December 20, 2017, U.S. Secretary of Commerce Wilbur Ross announced the affirmative final determinations in the antidumping duty and countervailing duty investigations of 100-seat to 150-seat large civil aircraft from Canada.
“This decision is based on a full and unbiased review of the facts in an open and transparent process.” said Secretary Ross.
“The United States is committed to a free, fair, and reciprocal trade and will always stand up for American workers and companies being harmed by unfair imports.”
Commerce determined that exporters from Canada sold 100- to 150-seat large civil aircraft in the United States at 79.82% less than fair value.
Commerce also determined that Canada is providing unfair subsidies to its producers of 100- to 150-seat large civil aircraft at a rate of 212.39%. Commerce will instruct U.S. Customs and Border Protection to collect cash deposits from importers of 100- to 150-seat large civil aircraft based on the final rates.
Bombardier (BDRBF), the Government of Canada, and Petitioners agreed that the proposed transaction between Bombardier and Airbus (EADSY) does not impact these investigations.
4. EMBRAER
Boeing confirmed takeover talks with Embraer (ERJ) during the quarter. The Brazilian government, which owns a golden share in Embraer, represents a potential hurdle in the deal.
Investors should look for more guidance on this topic when Boeing reports. BA last traded at $337.10.
This 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.
Shareholder calls on Avon Products to consider a sale of the company
Shareholder calls on Avon Products to consider a sale
A group of shareholders of Avon Products (AVP) led by Shah Capital, Barington Capital Group, L.P., and NuOrion Partners that collectively beneficially owns approximately 3.5% of the outstanding common stock announced that it has sent a letter to the board of Avon calling on the board to promptly retain a financial advisor to explore all strategic alternatives to maximize shareholder value, including a sale of the company in whole or in parts.
The Shareholder Group is extremely disappointed with the deteriorating operating and share price performance that has occurred under the stewardship of the current board.
The Shareholder Group is also dismayed by the Board’s failure to act quickly and decisively on the past recommendations its members have made to improve the long-term performance of the company, including promptly hiring a new chief executive officer – a step that has been long overdue and members of the Shareholder Group recommended over two years ago.
As a result, the Shareholder Group has lost confidence in the ability of Avon’s current Board to create meaningful long-term value for its public shareholders, and sees no reason why shareholders should continue to wait for a turnaround from a Board that has overseen a tremendous destruction of shareholder value.
The Shareholder Group therefore believes that the best course of action is for the Board to retain a financial advisor to explore the sale of the company.
The Shareholder Group believes that Avon would be highly attractive to a range of buyers due to its many positive attributes, including its well-known 130-year old brand; its vast product offering generating over $5.7 billion in sales; its strong market positions in developing countries such as Brazil, Russia and Mexico; its owned manufacturing operations; and its six million direct sales representatives.
In addition, a multinational acquirer would immediately benefit from its ability to improve Avon’s capital structure and the tax efficiency of its operations.
The Shareholder Group is convinced that a better capitalized strategic buyer would do a much better job of unlocking Avon’s tremendous value potential than the company’s current Board.
AVP closed at $2.43. The stock has a 52 weeks trading range of $1.85 – $6.03.
This 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.
