Congressman Requests Hearing on Amazon Whole Food Merger

Democratic Rep calls for oversight hearing on Amazon-Whole Foods tie-up

Democratic House Representative David Cicilline of Rhode Island wrote a letter to the Republican leaders of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, requested that the committee hold an oversight hearing on Amazon’s (AMZN) proposed takeover of Whole Foods (WFM).

#Cicilline said in the letter that he has heard concerns that the merger may discourage innovation and entrance into emerging markets, such as grocery and food delivery.

The Rep added that some have raised concerns that the deal will also increase Amazon’s online dominance, enabling it to “prioritize its products and services over competitors.”

“Without taking a position on the legality of the transaction under the antitrust laws, Amazon’s proposed acquisition of Whole Foods raised important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families,” Cicilline said in the letter.

Note that United Natural Foods (UNFI) is headquartered in the Congressman’s district. United Natural Foods, Inc. distributes and retails natural, organic, and specialty foods and non-food products in the United States and Canada. The company operates through three divisions: Wholesale, Retail, and Manufacturing and Branded Products.

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Dominion Diamond is For Sale

Dominion Diamond in advanced talks to be bought by Washington Cos.

 

Dominion Diamond in advanced talks to be bought by Washington Companies. See Stockwinners.com Market Radar for more

Washington Companies is in advanced negotiations to purchase Dominion Diamond after it raised its prior unsolicited cash offer of $13.50 per share and a deal could be announced within weeks, the New York Times reports.

Dominion Diamond Corp of Canada is the world’s third-largest diamond producer by market value.

Dominion Diamond Corporation engages in the mining and marketing of rough diamonds. It operates through Diavik Diamond Mine and Ekati Diamond Mine segments.

The company holds 88.9% ownership interest in the Core zone and 72.0% ownership interest in Buffer zone of Ekati Diamond Mine; and a 40% ownership interest in the Diavik Diamond Mine located at Lac de Gras in Northwest Territories, Canada.

It produces, sorts, and sells rough diamonds in Canada, Belgium, and India. The company was formerly known as Harry Winston Diamond Corporation and changed its name to Dominion Diamond Corporation in March 2013.

It is unclear how much Washington increased its proposal for Dominion, which previously rejected Washington’s initial bid, saying it undervalued the company.

Trade in Dominion shares on the Toronto Stock Exchange was halted pending news. The stock had gained as much as 4.74 percent following Reuters’ report on the talks. DDC last traded at $13.46, up 70 cents.

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Nutanix Could Be Sold

Nutanix climbs after Goldman adds to Conviction List, highlights M&A potential

Nutanix climbs after Goldman says it could be take over target. See Stockwinners.com Market Radar

The shares of Nutanix (NTNX) are rallying after Goldman Sachs added the stock to its Conviction List and called the company a potential takeover target.

The firm added that the company is “a once-in-a-decade tech infrastructure story,” while its results are poised to beat consensus estimates in “coming quarters.”

POSSIBLE TARGET IN HIGH-GROWTH MARKET

Calling hyperconvergence “the biggest trend in IT since public cloud,” Goldman analyst Simona Jankowski estimated that Nutanix has a roughly 30% share of the $2B hyperconvergence market, which she predicted would grow to $20B in a decade.

Hyper-convergence (hyperconvergence) is a type of infrastructure system with a software-centric architecture that tightly integrates compute, storage, networking and virtualization resources and other technologies from scratch in a commodity hardware box supported by a single vendor.

Meanwhile the stock’s 30% drop so far this year and the lack of similar companies makes a takeover of Nutanix “increasingly likely,” the analyst stated.

RESULTS OUTLOOK POSITIVE

Nutanix’s strong fundamentals and an accounting change it’s making should enable the company to report strong results, wrote Jankowski.

Later this year, Nutanix’s switch to new accounting rules that will allow it to recognize software revenue up front should significantly boost its results, Jankowski believes.

Goldman’s checks indicate that adoption trends for hyperconverged infrastructure in general and Nutanix specifically have been strong, according to the analyst.

COMPETITIVE ADVANTAGES

A number of Nutanix’s advantages over its competitors should enable it to retain its market share over the longer term even as competition in its category heats up, Jankowski stated.

Specifically, while the hypercoverged solutions of Cisco (CSCO) and HP Enterprise (HPE) can only work on their servers, Nutanix’s products can work on a number of third party servers, the analyst noted. Additionally, Nutanix’s system works with several hypervisors, including its own, free hypervisor, enabling users to avoid paying for VMware’s (VMW) product, thereby saving them as much as 30%, according to Jankowski.

TARGET

The analyst set a $31 price target on the stock, but she believes that the shares can rise more than 50% above her target.

PRICE ACTION:

In Friday trading, Nutanix rose 7.5% to $21.79.

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Nerf Sold for $1.2 Billion

Neff Corporation sold for $21.07 per share

Neff Corp sold for $1.2 Billion. See Stockwinners.com Market Radar to read more.

H&E Equipment Services, Inc. (HEES) and Neff Corporation (NEFF) today announced that they have entered into a definitive merger agreement under which H&E Equipment Services (“H&E”) will acquire Neff Corporation (“Neff”).

Neff Corporation operates as an equipment rental company in the United States. The company offers earthmoving equipment, including excavators, backhoes, loaders, bulldozers, mini-excavators, trenchers, sweepers and tractors, track loaders, and skid steers; and material handling equipment comprising reach forklifts, industrial forklifts, and straight-mast forklifts.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, H&E will pay $21.07 in cash per share of Neff common stock, for a total enterprise value of approximately $1.2 billion, including approximately $690 million of net debt.

The per share merger consideration payable to Neff stockholders is subject to certain downward adjustments, not to exceed $0.44 per share, in the event that H&E incurs certain increased financing costs due to the transaction not being consummated on or prior to January 14, 2018.

The transaction is expected to close in the late third quarter or early fourth quarter of 2017, and is subject to customary closing conditions including Hart-Scott-Rodino Act clearance.

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Oaktree Capital to Acquire Fifth Street Finance, Fifth Street Senior

Oaktree Capital to acquire Fifth Street Finance, Fifth Street Senior BDCs

Oaktree Capital to acquire Fifth Street Finance, Fifth Street Senior. See Stockwinners.com Market Radar

Oaktree Capital Group (OAK) announced that Oaktree Capital Management has signed a definitive asset purchase agreement under which Oaktree will become the new investment adviser to two business development companies: Fifth Street Finance (FSC) and Fifth Street Senior Floating Rate (FSFR).

Oaktree will pay $320M in cash to Fifth Street Management upon the close of the transaction. The parties expect the transaction to be completed in Q4.

Oaktree portfolio manager Edgar Lee is expected to serve as CEO of both BDCs, which together have approximately $2.5B of assets under management across first lien, second lien, uni-tranche and mezzanine credits.

Following the transaction, FSC will change its name to Oaktree Specialty Lending Corporation, and will trade under the ticker symbol OCSL; FSFR will change its name to Oaktree Strategic Income Corporation, and will trade under the ticker symbol OCSI.

Following the closing of the transaction, Oaktree will replace FSM as the investment adviser to the BDCs, and an Oaktree affiliate will become their administrator.

Oaktree’s proposed investment advisory agreements are more aligned with BDC shareholders as the management fee rate for FSC will be reduced from 1.75% to 1.50%, and the incentive fee will be reduced from 20.0% to 17.5% with respect to both income and capital gains.

The incentive fee for FSFR will also be reduced from 20.0% to 17.5% with respect to both income and capital gains. The current FSFR management fee rate of 1.0% will remain unchanged. OCG expects the transaction to be immediately accretive to its adjusted net income. The new advisory agreements are subject to approval by the stockholders of FSC and FSFR.

The FSC and FSFR boards of directors unanimously recommended that the stockholders of each BDC vote in favor of the new investment advisory agreement with Oaktree and related corporate governance matters, including the election of new directors.

Following the closing of the transaction, all current FSC board members except Richard P. Dutkiewicz, and all current FSFR board members except Richard W. Cohen, have agreed to resign.

Each BDC board has nominated Marc H. Gamsin, Craig Jacobson, Richard G. Ruben and Bruce Zimmerman as new independent directors and John Frank, Vice Chairman of Oaktree, as a new interested director of the board, each of whom would take office upon approval of the stockholders and the closing of the transaction.

Mr. Frank is expected to serve as Chairman of each BDC board. The executive officers of FSC and FSFR will resign and will be replaced with individuals affiliated with Oaktree at the closing of the transaction.

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KS Bancorp Receives $35 a share Offer

First Citizens proposes to acquire KS Bancorp for $35 per share in cash

First Citizens BancShares (FCNCA) said it has made a proposal to acquire KS Bancorp (KSBI) for $35.00 per share in cash, in a transaction valued at approximately $45.8M, representing a 49.6% premium over KS Bancorp’s (KSBI) closing trading price on July 12, 2017, and a 84% premium over KS Bancorp’s book value per share as of March 31, 2017.

The proposal was conveyed today in a letter to KS Bancorp’s Board of Directors. First Citizens has decided to make its proposal public in order to inform KS Bancorp’s shareholders of the compelling proposal that would provide immediate liquidity to them at a substantial premium to book value and the market’s assessment of KS Bancorp’s value.

“Our objective is to engage in substantive discussions with KS Bancorp and conduct customary due diligence so that we and KS Bancorp can together quickly bring this compelling transaction to KS Bancorp’s shareholders,” said Frank B. Holding, Jr., chairman and CEO of First Citizens.

“We are disappointed by KS Bancorp’s rejection of our offer without any discussion, and were surprised that the reason given for this was a contemplated S corporation reorganization that we understand would involve a buyout of a significant number of KS Bancorp shareholders. We believe that KS Bancorp shareholders will favor the immediate liquidity at a substantial premium that our acquisition proposal would provide.”

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TherapeuticsMD Could Double by the End of September

Watch TherapeuticsMD into FDA meeting on September 29th

Watch TherapeuticMD ahead of FDA Meeting. See Stockwinners.com Market Radar

#Oppenheimer analyst Jay #Olson upgraded TherapeuticsMD (TXMD) to Outperform recently ahead of an expected Food and Drug Administration meeting update, saying there is a “reasonable probability” of positive news.

Olson argued that the company is likely to resubmit #TX-004HR, its investigational vaginal drug product candidate for the treatment of vulvar and vaginal atrophy in postmenopausal women, by the end of the month, with a potential FDA approval by September 29.

#Vulvovaginal atrophy ( #VVA ) is a common and underreported condition associated with decreased estrogenization of the vaginal tissue. Symptoms include dryness, irritation, soreness, and dyspareunia with urinary frequency, urgency, and urge incontinence. It can occur at any time in a woman’s life cycle, although more commonly in the postmenopausal phase, during which the prevalence is close to 50%.

APPROVAL BY SEPTEMBER

In a research note to investors, Oppenheimer’s Olson upgraded TherapeuticsMD to Outperform from Perform, with a $10 price target, as he expects details of the company’s meeting with the FDA around July 14 and believes there is a “reasonable probability” of positive news.

The analyst noted that the elimination of the TX-004HR 25 mcg dose is a positive as the remaining 4 and 10 mcg doses both provide essentially no systemic exposure to estrogen.

Moreover, he pointed out that he is encouraged by the recent North American Menopause Society’s position statement which he believe supports TX-004HR versus higher dose competitors.

Additionally, Olson argued that data on Complete Response Letters provides confidence that there are likely no other TX-004HR approvability issues besides lack of long-term endometrial safety data beyond the 12 weeks studied in REJOICE and that there are likely no approvability issues that would have any implications for TX-001HR, its drug product candidate for the treatment of vasomotor symptoms related to menopause.

The analyst believes TherapeuticsMD is likely to resubmit TX-004HR by July 31, with a potential FDA approval by September 29, assigning a 60% probability to this scenario.

Overall, Olson told investors that he sees TherapeuticsMD as an “underappreciated asset,” with potential to successfully penetrate and expand the market for treatment of menopausal symptoms with wholly owned products TX-004HR and TX-001HR, while an existing prenatal supplement business provides a commercial foundation.

PRICE ACTION

In Thursday afternoon trading, shares of TherapeuticsMD rose 6% to $5.32 per share. The stock is up about 23% over the last month.

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