Bristol Myers Squibb Co. said Sunday it will buy Mirati Therapeutics Inc. in a deal valued at up to $5.8 billion.
The pharmaceutical giant announced it will pay $58 a share for Mirati, for a total equity value of $4.8 billion. Mirati stockholders will also receive one non-tradeable Contingent Value Right for each share they hold, potentially worth $12 a share in cash, representing an additional $1 billion of possible value.
Mirati shares closed Friday at $60.20, with the company’s market cap at about $4.21 billion.
Mirati develops commercial-stage oncology therapies, and through the deal, Bristol Myers Squibb will add lung-cancer medicine Krazati, among others, to its portfolio.
“We are excited to add these assets to our portfolio and to accelerate their development as we seek to deliver more treatments for cancer patients,” Giovanni Caforio, Bristol Myers Squibb’s chief executive and chairman, said in a statement. “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals.”
The deal is expected to be dilutive to Bristol Myers Squibb’s non-GAAP earnings per share by about 35 cents a share in the first 12 months after the transaction closes. The merger is expected to close by the first half of 2024.
Bristol Myers Squibb, with a market cap of about $118.4 billion, has seen its shares BMY, +0.43%
sink 21% year to date. Mirati shares MRTX, -3.49%
are up 33% this year. The S&P 500 SPX,
in comparison, has gained about 12% in 2023.
Exxon Mobil Corp. XOM, -1.67%
is reportedly nearing a deal to buy energy-exploration company Pioneer Natural Resources Co. PXD, +10.45%
for $60 billion, a combination that could shake up Texas’ storied and oil-rich Permian Basin.
It’s also bound to attract attention from the Biden Administration’s antitrust enforcers, including Federal Trade Commission Chair Lina Khan, given the paramount political importance of oil and gasoline prices.
“You can be sure that the FTC will give this acquisition a serious look,” Stephen Calkins, former general counsel at the FTC told MarketWatch, adding that the agency has long paid special attention to the oil and gas industry at the behest of Congress, which has long been sensitive to anything that may increase prices at the pump.
The high cost of living after several years of historic inflation is one of President Joe Biden’s most important political vulnerabilities ahead of the 2024 election. A recent poll by Investors Business Daily showed only 24% of voters approve of his economic record.
The president has campaigned on gasoline prices specifically, telling an audience in Maryland last month, “I’m going to get those gas prices down again, I promise you.”
But any decision to challenge a merger must be based on the facts of the market in question and whether it would present a threat to competition that could lead to higher prices for consumers or other adverse effects.
Frederick Lawrence, director and energy analyst at Capital Alpha Partners told MarketWatch that there is much greater competition in the market for oil exploration and production, where Pioneer is a major player, than in other segments of the industry including gasoline stations, pipeline operators or refining.
Independent oil companies produce roughly 85% of natural gas and 65% of oil in the U.S., he said, and that fact will make it difficult for the Exxon acquisition to meaningfully reduce competition in oil exploration.
“People just think about big oil and they forget that there’s a very healthy independent community out there competing,” he said. “That said, this is Exxon Mobil we’re talking about, the 800 pound gorilla of the upstream oil value chain, so it’s important to acknowledge they’ll get more scrutiny.”
Investors should be prepared for the deal to take longer to consummate than a similar acquisition in another industry, Lawrence added, pointing to a recent deal between private equity firm Quantum and natural-gas producer EQT that was slowed because of additional information requests from the FTC.
The deal was ultimately consummated in August, nearly a year after it was announced.
Former FTC official Calkins said that investors should also be prepared for the FTC to get creative as it studies the deal, noting that Biden administration antitrust enforcers “have been receptive to unusual theories of competitive harm” and will study the impact of the merger on downstream businesses, like refiners and gasoline retailers.
The agency will also scour the deal for “any part of the business where there’s an anticompetitive story,” Calkins said, noting that large complex mergers often involve the transfer of a more obscure but valuable asset that could illegally boost an acquiring company’s market power.
Meanwhile, the FTC also has to contend with an already heavy workload, with ongoing cases against well-resourced companies like Amazon.com Inc. AMZN, +1.59%
“The FTC right now is doing a lot of litigating,” Calkins said. “There is a resources question of whether they have the ideal number of staff with the right skill set to add to their already full plate.”
Exxon Mobil Corp. is close to a deal to buy shale-drilling company Pioneer Natural Resources for about $60 billion, the Wall Street Journal reported late Thursday.
Citing sources familiar with the matter, the Journal said the deal could be finalized in the coming days. The Journal had reported in April that the two companies had held preliminary talks.
The acquisition would be one of the largest in the U.S. this year, and Exxon’s biggest since it bought Mobil in 1999. The Journal noted that Exxon has been flush with cash since posting record profits last year, and is looking to become the dominant player in the oil-rich Permian Basin in western Texas and New Mexico.
Exxon has a market cap of about $446 billion, as of Thursday, while Pioneer is valued at about $50 billion.
Exxon shares XOM, -2.25%
have fallen about 1% year to date, while Pioneer PXD, -0.17%
stock is down about 6% in 2023, The S&P 500 SPX,
in comparison, is up about 11% year to date.
A group of Democrats in the House and Senate are imploring the country’s top antitrust enforcement cop to implement sweeping new changes to its merger-review protocol, according to a new letter viewed exclusively by MarketWatch.
The Federal Trade Commission, along with the Justice Department’s antitrust division, recently proposed changes to forms that companies proposing deals of a certain size must submit to the government, which critics say would suppress the market for mergers and acquisitions.
The new form will require companies to provide much more information to antitrust enforcers before they seek to consummate a deal. Most controversially, that would include narrative information about the strategic rationale for a transaction as well as studies, surveys, analyses and reports which were prepared by the company as it considered the deal.
“The new proposed [form] and associated instructions will facilitate efficient premerger review and ensure effective enforcement of antitrust laws,” wrote the lawmakers, including Sens. Elizabeth Warren, a Massachusetts Democrat, and Bernie Sanders of Vermont, an independent who votes with Democrats.
The letter, dated Sept. 27, was also signed by Democrats including Sen. Mazie Hirono of Hawaii, and Reps. Becca Balint of Vermont, Henry Johnson of Georgia, Rashida Tlaib of Michigan, Summer Lee of Pennsylvania, Lori Trahan of Massachusetts, Ilhan Omar of Minnesota, Mark Pocan of Wisconsin, Katie Porter of California and Greg Casar of Texas. No Republicans signed the letter.
The lawmakers lament the state of the U.S. economy today, arguing that the updated premerger process is necessary to combat growing concentration of industry and the digital transformation of the economy.
“Unchecked consolidation hurts consumers, small businesses, workers, and the economy,” the letter reads. “Consolidation leads to higher prices, less innovation, and reduced quality for consumers. It prevents small businesses from entering markets or competing fairly: for example it is twice as expensive for small businesses to borrow money compared to dominant ones, and there are fewer startups in states where a few companies dominate markets.”
The lawmakers note that since the current premerger notification process was instituted nearly 45 years ago, the required forms have not been updated, and only require companies to provide basic information that don’t “give regulators clarity as to whether a deal may substantially lessen competition.”
The FTC and DOJ proposed the changes in July, and then extended the period for accepting public comments on the proposal to Sept. 27, and it’s possible the final rule is amended before the agencies adopt it. There is no set timeline for when the FTC will vote to adopt any changes.
Some antitrust experts are skeptical that the proposed changes will hold up in court, if they are implemented as proposed.
“The proposed changes are likely to face a rocky path ahead,” wrote Justin Hurwitz of the University of Pennsylvania’s Center for Technology, Innovation & Competition, in a recent analysis.
“They appear to violate legislative intent that [the premerger process] not unduly delay transactions or require the production of materials the firms did not already create as par of evaluating the transaction.”
Hurwitz added that “the premerger notification process serves an important function, but it is a tax on on all mergers,” and predicted that the proposed changes will likely not “survive judicial review.”
Shares of GameStop Corp. surged Thursday, after the consumer electronics retailer named Ryan Cohen as it president and chief executive officer, effective immediately.
The move, which wasn’t unexpected, comes a few months after the company fired then-CEO Matthew Furlong, and elected activist investor Ryan Cohen as executive chairman. At that time, Cohen said in a tweet, “Not for long.”
Cohen will relinquish his role as executive chairman when he is appointed chairman.
GameStop’s stock GME shot up 9.9% in premarket trading, putting it on track to open at a three-week high.
Cohen, who previously founded and was CEO Chewy Inc. CHWY, -0.06%,
is the manager of RC Ventures, which in June disclosed a 36.85 million-share, or 12.1% stake in GameStop.
“In connection with his appointment, Mr. Cohen will assume the role of principal executive officer from Mark H. Robinson effective immediately and his responsibilities will include the oversight of all other executive officers, including Mr. Robinson,” the company said in a statement.
The company said Cohen will not receive any compensation for his roles as president, CEO and chairman, and will “continue to engage in various business activities and pursuits outside of the company.”
GameStop’s stock, which was one of the original “meme” stocks, has tumbled 37.2% over the past 12 months, while the S&P 500 index GME, +2.21%
has gained 14.9%.
Stelco and U.S. Steel didn’t immediately respond to a request for comment
A bid, if it happened, would be surprising. U.S. Steel is much larger than Stelco. The Canadian steel maker shipped about 2.6 million tons of steel in 2022, while U.S. Steel shipped about 15 million. Stelco’s enterprise value, including stock and debt, is about $1 billion. U.S. Steel’s is about $9 billion.
“That makes it an upstart and we suppose the key to handicapping its chances is knowing who it is partnered with. If that partner is an investor with deep pockets, we won’t be so quick to dismiss Stelco’s chances,” wrote Gordon Haskett analyst Don Bilson in a report Friday. “For now, however, we’re going to view it as a long shot.”
Stelco likely would need a partner to complete a merger.
The possible bid is surprising in another way, too. Stelco was actually once owned by U.S. Steel. The American firm bought it 2007 after Stelco filed for bankruptcy protection. Stelco filed for bankruptcy again in 2014 and was purchased by Bedrock Industries in 2017 before listing as a public company again later that year.
“Recent history has not been kind to companies that have tried to recombine with a former partner,” added Bilson, citing
(PARA) shares are down about 70% since the merger plan was announced in August 2019.
That bids are emerging for U.S. Steel isn’t surprising, though. On Aug. 13, the company said it was exploring strategic options, which could include a sale of the company. Since then, steel maker
(CLF) and steel service center Esmark have announced bids.
Esmark processes and distributes steel, rather than producing it. The company didn’t announce financing with its bid and has dropped out of the process.
(MT) was reportedly considering a bid. ArcelorMittal didn’t comment on a potential bid, which also would have been a little odd. Arcelor sold its U.S. operations to Cliffs in 2020.
U.S. Steel stock was about $23 a share before its announcement and bids started to emerge. The Cliffs bid, which is a mix of cash and stock, and is the only current bid with hard numbers attached to it, is currently worth $32.21 a share.
U.S. Steel stock was at $31.80 on Friday, up 1.8%. The
Microsoft’s proposals to modify its $75 billion Activision acquisition address the concerns with the U.K. antitrust authority, the regulator said in a provisional decision Friday.
The U.K. Competition and Markets Authority said that the new deal submitted by Microsoft should lessen any harm to competition in cloud gaming.
The CMA said that the restructured transaction–through which Activision would sell its cloud gaming rights to Ubisoft–opens the door to the deal being cleared.
The regulator is consulting on remedies put forward by Microsoft to address residual concerns it has before making a final decision, it said.
The CMA opened a consultation on these remedies which will last until Oct. 6, it added.
With Cisco Systems Inc.’s pending acquisition of Splunk Inc., the networking giant is making another major step toward becoming a software company.
On Thursday, Cisco CSCO said it was buying Splunk SPLK in a deal valued at about $28 billion, or $157 a share in cash, for the cloud-security company. The match had been speculated about for years, and Cisco has been on a buying binge this year, as it seeks to grow with more security and software offerings.
VinFast Auto Ltd. late Thursday reported a second-quarter loss of half a billion dollars, saying it delivered more than 9,000 electric vehicles globally for sales of about $315 million in the period.
Vietnamese EV maker VinFast VFS went public in August through a SPAC deal, and the stock more than tripled by the end of its first session, sending the company’s market valuation soaring to more than $200 billion.
The former parent company of Silicon Valley Bank is nearing a deal to sell its VC and credit-investment arm out of bankruptcy, according to a Wall Street Journal report Friday, citing people familiar with the matter. SVB Financial Group SIVPQ, -4.62%
is in talks with two bidders for SVB Capital: Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and private-equity firm Vector Capital. A court decision on a winner is expected in the next few weeks in a deal that could fetch between $250 million and $500 million. Silicon Valley Bank failed in March and was taken over by regulators, cascading into a banking crisis that later took down Signature Bank and First Republic.
Ford Motor Co.’s and General Motors Co.’s stocks were higher Friday as workers kicked off a strike, but their bonds have been under selling pressure for some time.
Nearly 13,000 U.S. auto workers went on strike early Friday after the three automakers and the UAW failed to reach an agreement before their national contract expired just before midnight.
The union has opted for targeted strikes, so workers at a Ford F, -0.04%
plant in Michigan and a GM GM, +0.83%
plant in Missouri were first to down tools, along with workers at a Stellantis N.V. STLA, +2.12%
plant in Ohio.
UAW President Shawn Fain has said others could join later and asked all 150,000 members to be ready if and when they’re called to strike.
The strike at all three U.S. carmakers is a break with tradition, as the union for many years has elected to center strike efforts at one company to protect its strike fund and picket-line firepower.
Ford’s stock was last up 0.5%, while GM was up 1.4%.
But as the following charts from data solutions company BondCliQ Media Services shows, the bonds have seen far more selling than buying over the last 10 days. Bondholders are often viewed as “smarter” than shareholders, because they tend to be laser-focused on a company’s financials and cash flows, to ensure they will be repaid their principal when bonds mature.
Net customer flow of Ford and GM bonds (last 10 days). Source: BondCliQ Media Sources
The next chart shows that Ford has seen more selling than GM.
Ford and GM’s debt trading volumes (last 10 days). Source: BondCliQ Media Services
Most-active Ford issues with net customer flow (last 10 days). Source: BondCliQ Media Services
Most-active General Motors issue with net customer flow (last 10 days). Source: BondCliQ Media Services
Stellantis, meanwhile, was seeing strong buying of its U.S. dollar-denominated bonds. The company, the former Fiat Chrysler, has far less debt than Ford and GM.
Stellantis has about $26.5 billion of total debt, according to FactSet data, about $19.7 billion of which is in bonds.
Ford has $143 billion of debt and $124 billion of bonds. GM has $118 billion of debt, with about $107 billion in bonds, according to FactSet.
Most active Stellantis NV issues (USD) with net customer flow (last 10 days). Source: BondCliQ Media Services
“It seems likely the UAW will try to ratchet up pressure on the automakers over time by shifting the strike to more impactful plants and adding more plants to the strike,” Stephen Brown, a senior director at Fitch, said in emailed comments. “The impact on the automakers of striking individual plants could be similar to the semiconductor-induced disruptions that we saw over the past few years.”
Fitch had already incorporated the potential impact of strikes in its recent decision to upgrade its ratings of Ford and GM, he said. The agency moved Ford to BBB- from BB+, moving it back into investment trade from speculative, or “junk,” status.
“Ford, GM and Stellantis all have robust liquidity positions that will help them to withstand a potentially drawn-out period of production disruption. Based on June 30 figures, we estimate Ford has over $50 billion of cash and credit facility capacity, while GM has nearly $40 billion,” said Brown.
Stellantis stock was up 2.2% Friday and has gained 36% in the year to date, outperforming GM’s 1.2% gain and Ford’s 9.0% gain. The S&P 500 SPX
has gained 17% in the same time frame.
The U.S. stock market, as measured by the S&P 500 Index SPX, is trapped in a trading range, and volatility seems to be damping down considerably. The significant edges of the trading range are support at 4330 and resistance at 4540. Both of those levels were touched in the latter half of August. A breakout from this range should give the market some strong directional momentum.
Since Labor Day, prices have hunkered down into an even narrower range. Typically, the latter half of September through the early part of October…
Smurfit Kappa Group and WestRock Co. have formally signed a merger agreement as first outlined last week, creating a global paper and packaging powerhouse worth some $20 billion.
As announced on Sept. 7 a new company–Smurfit WestRock–will be created with a main listing on the New York Stock Exchange and a standard listing in London.
Smurfit WestRock will be led by Tony Smurfit as chief executive and Irial Finan as chair, the companies said.
Under the deal accepting WestRock shareholders will get one new Smurfit WestRock share and $5.00 in cash, equivalent to $43.51 a share.
Upon completion Smurfit Kappa shareholders will own 50.4% of the combined business with WestRock owning the rest.
“Smurfit WestRock will be the ‘Go-To’ packaging partner of choice for customers, employees and shareholders. We will have the leading assets, a unique global footprint in both paper and corrugated, a superb consumer and specialty packaging business, significant synergies, and enhanced scale to deliver value in the short, medium and long term,” Smurfit Kappa Chief Executive Tony Smurfit said.
Usually, the announcement of a CEO change at a struggling company brings optimism and maybe even a stock pop. Not for
Walgreens Boots Alliance
Its shares have tumbled since Rosalind Brewer announced on Sept. 1 that she was stepping down. That could present a buying opportunity if the company makes the “right” choice…
Apple Inc. shares sold off for the second session in a row Thursday amid swirling concerns about the company’s China business, but some analysts say those fears may be overblown.
The Wall Street Journal reported earlier this week that China was banning government officials from using iPhones for work purposes, while Bloomberg News reported that the ban could ultimately extend to government-backed agencies and state companies. The question for investors is whether the issue will be limited to state-affiliated employees in…
Electric-vehicle startup VinFast Auto Ltd. has seen its market capitalization fall more than $140 billion in less than two weeks, weighed down by a six-day losing streak for the company’s stock.
Shares of VinFast VFS, -2.72% soared last month after the company went public through a special-purpose acquisition company deal, taking its market cap to an eye-watering $231.3 billion on Aug. 25 — easily surpassing established automakers such as Ford Motor Co. F, +0.57%
and General Motors Co. GM, +0.09%.
VinFast is on pace to extend its losing streak to seven days. Shares of the low-float company fell 26.3% Thursday, taking VinFast’s market cap to $85 billion, according to FactSet data. Ford’s market cap is $47.7 billion and GM’s is $44.5 billion, FactSet data show.
The EV maker is a majority-owned affiliate of Vietnamese conglomerate Vingroup, one of the largest publicly traded companies in Vietnam. VinFast said that as of June 30, 2023, the company has delivered close to 19,000 EVs.
About 99% of VinFast shares are controlled by Vingroup chair and VinFast founder Pham Nhat Vuon, making only a small portion available to investors.
VinFast is importing its vehicles into the U.S. and is also ramping up its North American presence. In July, the company broke ground on an electric-vehicle manufacturing site within the Triangle Innovation Point in Chatham County, N.C. The startup says the plant will eventually have the capacity to make 150,000 vehicles a year.
Shares of AMC Entertainment Holdings Inc. AMC tumbled 13.9% toward the lowest price seen since January 2021 after the movie theater operator disclosed an equity distribution agreement in which the company could sell up to 40 million common shares. That would represent up to 7.7% of the common shares outstanding. The shares sales, if any, may be “at the market offerings” or could be to sales agents through block trades. The stock, which underwent a 1-for-10 reverse stock split on Aug. 24, was on track to open at the lowest price seen during regular-session hours since Jan. 15, 2021. It has tumbled 66.7% over the past three…
The U.S.-listed shares of Manchester United PLC suffered a record beating Tuesday, after a report that the iconic English football club was set to be taken off the market.
Manchester United MANU UK:MNL fell 18.2% on the day to log its biggest one-day selloff since the company went public in August 2012. The previous record drop was 13.8% on March 12, 2020, at the outset of the coronavirus pandemic.
Pernod Ricard plans to buy back up to EUR800 million ($874 million) in shares in fiscal 2024 after the company reported an increase in sales and profit for fiscal 2023.
The French drinks group said Thursday that organic sales for the year ended June 30 grew 13% on a reported basis to EUR12.14 billion, while net profit for the year rose to EUR2.28 billion from EUR2.03 billion in fiscal 2022.
Analysts had expected sales of EUR12.16 billion and net profit of EUR2.4 billion, according to a FactSet-compiled poll.
For the fourth quarter, sales rose to EUR2.63 billion from EUR2.30 billion a year earlier.
The company said sales in all regions increased thanks to pricing, with all spirits categories delivering strong growth.
Looking ahead, the company backed its fiscal 2023-25 medium-term financial target, including reaching the upper end of between 4% and 7% of net sales growth and a 50 to 60-basis-point increase in operating margin.
It proposed a dividend of EUR4.70, an increase of 14% compared with fiscal year 2022.
