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WSJ : Alibaba to Raise $4.5 Billion Through Convertible Bonds to Fund Buybacks

Alibaba to Raise $4.5 Billion Through Convertible Bonds to Fund Buybacks
The accelerated pace of buybacks comes as the company faces growing competition and a sluggish Chinese economic recovery

Alibaba 9988 -0.95%decrease; red down pointing triangle Group Holding plans to raise $4.5 billion through a convertible-bond issue to fund share repurchases, following a similar move by rival e-commerce giant JD.com.

The convertible senior notes maturing in seven years will carry a coupon of 0.5%, Alibaba said in a filing to Hong Kong’s stock exchange Friday. The deal size could reach $5.0 billion if the option to purchase additional notes is exercised in full.

The notes can be exchanged for shares at an initial conversion price of about $105.04 per American depositary share, a 30% premium over Thursday’s closing price of $80.80. Alibaba plans to repurchase about 14.8 million ADS.

“We expect Alibaba to continue its shareholder return policy over the next few years,” Fitch Ratings said, assigning an A+ rating to the notes. The credit ratings company expects Alibaba to spend $11 billion to $13 billion on share buybacks over the next few fiscal years. Alibaba’s fiscal year runs from April to March.

Earlier this week, online retail peer JD.com raised $2.0 billion through a five-year convertible bond that could be exchanged for shares at a 35% premium to the company’s reference price of $33.85 per ADS.

Alibaba spent a record $4.8 billion buying back its shares in the first three months of 2024 when they touched multiyear lows.

The accelerated pace of buybacks comes as the Hangzhou-based company faces growing e-commerce competition and a sluggish Chinese economic recovery from the pandemic.

“We expect higher pressure on Alibaba’s profitability and cash generation in the near term due to continued investments in user experience, user growth, the value-for-money battle and AI as well as driving the business expansion of AIDC and Cainiao,” Fitch said.

Alibaba’s U.S.-listed shares closed 2.3% lower on Thursday. Its shares in Hong Kong were 0.3% lower by the midday break.

WSJ : Wood Group Knocks Back Sweetened $1.93 Billion Bid from Sidara

Wood Group Knocks Back Sweetened $1.93 Billion Bid from Sidara
The Scottish energy-services provider said the offer of 220 pence a share significantly undervalues the company and its growth prospects

John Wood Group WG 0.00%increase; green up pointing triangle rejected an improved 1.52 billion-pound ($1.93 billion) takeover bid from Sidara, following two prior proposals by the Dubai group.

The Scottish energy-services provider said Friday that the offer of 220 pence a share significantly undervalues the company and its growth prospects.

The bid, which represents a 3.8% increase on the prior offer, was rejected on Thursday. It followed a GBP1.47 billion approach made public May 15. The initial bid, disclosed May 8, valued Wood Group at GBP1.42 billion.

Sidara has until June 5 to either make a formal offer for Wood Group or walk away under U.K. takeover rules.

The interest comes about a year after Apollo Global Management walked away from a possible takeover of Wood Group, offering 240 pence a share.

Sidara, formerly known as Dar Group, is owned by Dar Al-Handasah Consultants Shair and partners.

>>> Stoxx 600 Pre-Market Indications

  • Infineon (IFX TH) -1.3%
  • Delivery Hero (DHER TH) -1.4%
  • Equinor (DNQ TH) -1.5%
    • Equinor ASA: Announcement of cash dividend per share in NOK for fourth quarter 2023 24 May 2024
  • Sartorius (SRT3 TH) -1.5%
  • Carl Zeiss Meditec (AFX TH) -1.5%
    • Carl Zeiss Meditec Cut to Sell at Goldman; PT 90 euros
  • Philips (PHI1 TH) -1.5%
    • FDA Says Philips Respironics Recalled OmniLab Ventilators
  • Investor AB (IVSD TH) -1.6%
  • Aixtron (AIXA TH) -1.7%
  • Bawag (0B2 TH) -1.8%
  • Fortum (FOT TH) -2%
    • Fortum Cut to Hold at Nordea