TheChek News Flow

US company is attempting to acquire the maker of a new treatment for pancreatic cancer

US pharmaceutical group Merck is in talks to buy Revolution Medicines, a cancer drugmaker with a market capitalisation of more than $20bn in what would be the latest big deal in the red-hot biotechnology sector.

Merck has not finalised a deal for the Redwood City, California-based biotech, said people familiar with the matter. A tie-up would be at least several weeks away, they added.

A price tag of $28bn to $32bn was being discussed as part of negotiations, one of the people said. That would mark the biggest healthcare deal in at least two years since Pfizer’s $43bn takeover of cancer biotech Seagen.

Other large pharmaceutical groups were circling Revolution Medicines and another suitor might prevail, the people added. A transaction is not a foregone conclusion.

Shares in Revolution Medicines rose 4.6 per cent during Thursday’s trading session, after the FT’s report. They rallied another 15 per cent in extended trading, giving the company a market value of $24bn.

Merck did not immediately respond to requests for comment. Revolution Medicines declined to comment.

The challenge of looming patent cliffs has triggered a wave of biotech deals by large pharma groups in recent months, driving total deal volumes to $135bn last year, more than double 2024 levels, according to S&P Capital IQ data.

Revolution Medicines is running early-stage trials for a new targeted therapy that stalls tumour growth in the most common type of pancreatic cancer, one of the deadliest forms of the disease that has scant treatment options.

The biotech is also trialling its drug, which works by inhibiting a gene mutation, for patients with non-small cell lung cancer. Revolution Medicines’ share price has more than doubled over the past year.

The group is awaiting vital data and approvals needed to sell its drugs, which are unlikely to reach market until the end of the year at the earliest, analysts say. That means the potential tie-up Merck is considering would be the biggest pre-commercial biotech deal.

Merck has been on a buying spree to fill an impending revenue hole when blockbuster cancer treatment Keytruda begins to lose patent protection in 2028. Last year, it struck a $10bn deal for respiratory drugmaker Verona Pharma and acquired flu prevention biotech Cidara Therapeutics for $9.2bn.

Hedge funds’ credit-default spat

In the world of credit default swaps, buyers and sellers usually prefer to keep quiet about their positions.

But the $10bn restructuring of the Luxembourg-based Ardagh Group has led to a rare public spat over the opaque derivatives, pitting London-based Arini Capital Management against rival funds.

The restructuring has also exposed Arini — which was one of Ardagh’s biggest bondholders — as having positions on multiple sides of Ardagh’s finances.

Arini was founded by former Credit Suisse star Hamza Lemssouguer in 2021. It’s grown rapidly and today manages more than $11bn in assets.

The fund has sold large amounts of Ardagh CDS, putting it at the centre of this week’s debate over how much buyers of the derivatives will be paid out.

The agreement to restructure Ardagh, one of the world’s biggest producers of glass and metal drinks containers, triggered the CDS contracts.

But it gets messy because the instruments don’t simply pay out a fixed amount. Instead, an auction of defaulted bonds is held, with CDS holders getting the difference between the amount the bonds fetch at auction and their face value.

Arini has argued that certain lower-ranking Ardagh bonds shouldn’t be included in that process. And it’s not hard to see why: Arini would face higher payouts on the CDS it sold if the lower-ranking bonds were included, according to several people familiar with the matter.

The fund said that including Ardagh’s unsecured bonds — which have since converted to equity — “would turn them into Schrödinger’s Obligations”, where they were both equity and debt at the same time.

London-based Tresidor Investment Management and New York-based Laurion Capital Management this week hit back, filing responses challenging Arini’s position.

Tresidor argued that it contains “multiple logical non-sequiturs”. Laurion’s lawyers from Milbank described Arini’s arguments as “incorrect and unworkably muddy”.

CDS is having a bit of a moment, especially to hedge against AI risks. So the resolution here could be critical to investors wondering what to expect in the way of payouts.

“This is about having a market that actually works,” said one credit investor with exposure to Ardagh’s CDS. “The product is there to insure people.”

Contentious restructuring has led to rare public fight between holders of derivatives designed to protect against default

Hedge funds have locked horns over a default at one of Europe’s largest issuers of junk debt, in a fight that will determine whether investors who placed bets against the company’s bonds will receive a substantial windfall or a much smaller payout.

The dispute is over credit default swaps — an insurance-like derivative product designed to provide protection against default — on the debt of Ardagh, one of the world’s biggest producers of glass and metal drinks containers, which recently underwent a contentious restructuring.

A panel of experts that adjudicates disputes in the multitrillion dollar global CDS market has become the target of a fierce lobbying battle, in a rare public spat that pits London-based Arini Capital Management against rival funds.

“This is about having a market that actually works,” said one credit investor with exposure to Ardagh’s CDS. “The product is there to insure people”.

Ardagh was transformed from a local company into a multinational operation spanning Europe, the US and Africa by Irish entrepreneur Paul Coulson, a former accountant known as “The Cooler”. He built Ardagh through a string of debt-funded buyouts, becoming a titan of junk bond markets.

Coulson ceded control of Ardagh to a group of its bondholders in a restructuring formally agreed last October. The deal secured $300mn for the company’s shareholders, including just over $100mn for Coulson himself.

Arini — which was founded by former Credit Suisse star trader Hamza Lemssouguer in 2021 and has grown rapidly to manage more than $11bn in assets — has argued that if certain lower-ranking Ardagh bonds are included in the process to determine CDS payouts, it could produce “arbitrary and absurd results”. 

Arini was one of Ardagh’s biggest bondholders and was involved in efforts to secure the restructuring deal. It has also sold large amounts of Ardagh CDS to investors seeking protection against a default and would face higher payouts if the lower-ranking bonds were included, according to several people familiar with the matter.

But London-based Tresidor Investment Management and New York-based Laurion Capital Management this week filed responses challenging Arini’s submission to the so-called Credit Derivatives Determinations Committee, with the former firm arguing that it contains “multiple logical non-sequiturs”.

Arini declined to comment. Tresidor and Laurion did not respond to a request for comment.

The dispute is the latest in a string of skirmishes over the wording and precise legal meaning of CDS contracts, where quirks of corporate restructuring can combine with the dense contracts governing the derivatives to create unexpected outcomes for investors.

The determinations committee, which is composed of experts from banks and funds active in the CDS market, was created in the wake of the 2008 global financial crisis in a bid to create a neutral arbiter to determine when defaults have occurred and how CDS contracts are settled.

Ardagh’s restructuring has already proved contentious for the CDS market, with the committee last year calling in a panel of barristers to conduct an external review to determine if and when a default had occurred. This was only the second time in its history that the determinations committee has brought in outside experts to adjudicate a European CDS default, with the previous review occurring when the Bank of Portugal in effect wiped out bondholders in Novo Banco in 2015.

The dispute over Ardagh CDS stems from the fact that such products do not pay out a fixed amount of money in the event of a default, but instead are designed to compensate for the precise losses bondholders have suffered as a result of a company’s default or restructuring. In order to determine the level of payout, an auction of defaulted bonds is held, with CDS holders receiving the difference between the amount the bonds fetch at auction and their face value. 

The determinations committee said last month that it planned to include lower-ranking unsecured Ardagh bonds in this process — a move that could suppress the price at auction and increase the CDS payout. Because of the large amount of Ardagh CDS outstanding, this could trigger payouts stretching into the hundreds of millions of dollars.

But earlier this month Arini filed a challenge, arguing that lower-ranking bonds are not eligible because they have since been converted into equity and should be treated as they would have been if this had already happened when the restructuring was agreed in October — the date at which the determinations committee has decided that a credit event occurred and the CDS contracts were triggered — because at that point, unlike more senior debt, they were in any event destined to disappear.

Fund’s opposing Arini argue that because the bonds were only converted to equity a month after the CDS was triggered, this argument does not stand.

Arini said the committee was trying “to reverse engineer a particular economic outcome for the settlement of the CDS” and that including the unsecured bonds “would turn them into Schrödinger’s Obligations”, where they were both equity and debt at the same time.

If these lower-ranking bonds are excluded, it would mean the auction would consist only of Ardagh’s safer secured debt, which is trading close to face value, leading to smaller payouts.

Tresidor and Laurion filed separate responses to Arini’s challenge on Monday contesting its argument, which Laurion’s lawyers, Millbank, described as “incorrect and unworkably muddy”.

The outcome of the dispute over Ardagh CDS is being closely watched in European credit markets, with many funds that bought protection against a default by Ardagh arguing that it would undermine faith in the financial product if it did not fully reflect losses investors suffered in the restructuring. 

Biotech’s M&A hot streak

Ahead of JPMorgan Chase’s marquee healthcare conference next week, some bankers thought they faced a high-class problem: they had been on such a hot streak that they were running out of valuable biotech assets to sell to Big Pharma.

After a bumper 2025, when they delivered $125bn worth of acquisitions, they fretted that dealmaking and the resulting advisory fees they earned would slide. Worry not.

The FT on Thursday revealed that Merck is in talks to buy cancer drugmaker Revolution Medicines. A potential deal — if one is ultimately reached — is still weeks away, and another suitor could still nab the prize.

But if a transaction materialises it would be the biggest biotech deal since Pfizer’s $43bn acquisition of Seagen (which Merck also pursued). It would also be the biggest acquisition of a pre-commercial biotech ever.

Merck’s chase of the pricey cancer biotech — which is pioneering a revolutionary targeted therapy for metastatic pancreatic cancer, one of the deadliest forms of the disease with scant treatment options — should be bullish for biotech dealmaking across the board.

Earlier this week, Eli Lilly, the world’s largest drugmaker by market value, struck a $1.2bn deal to buy autoimmune disease-focused biotech Ventyx Biosciences.

Last year, Merck spent nearly $20bn snapping up two biotechs — respiratory drugmaker Verona Pharma and flu-prevention biotech Cidara Therapeutics — and it seems like it’s not done yet. 

Of course, Merck’s pursuit of Revolution Medicines may see interlopers enter the mix.

Merck and its chief executive Rob Davis are contending with a classic problem faced by Big Pharma. Merck’s blockbuster cancer treatment Keytruda, which delivered an estimated $32bn in sales last year, will begin to lose patent protection in 2028.

The Revolution Medicines deal could help provide a real substitute for the loss of revenues from Keytruda.

If Revolution Medicine’s treatment is approved for both pancreatic and non-small cell lung cancer, it could generate $11bn in global sales by 2035, analysts at Stifel estimate. 

A mining megadeal is back on the table

If there was any question about whether M&A animal spirits would continue into 2026, it’s been answered just over a week into the year.

The FT scooped that global miners Glencore and Rio Tinto have restarted talks over a potential megamerger to create a mining behemoth with an enterprise value of more than $260bn.

The two groups separately confirmed they were in “preliminary discussions” about a “possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore”.

The statements also noted there was no certainty any transaction would be agreed.

Rio Tinto — the larger of the two companies with an enterprise value of $162bn — would potentially acquire Glencore under the deal currently envisaged, they said.

Mining companies are engaged in a global battle to secure access to copper resources. Last year two major players, Anglo American and Canada’s Teck Resources, agreed to merge, putting pressure on rivals to bulk up.

“It makes sense to create bigger companies,” Glencore’s chief executive Gary Nagle said in December. “Not just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital.”

The Glencore-Rio Tinto talks will surely put pressure on Australian miner BHP, which made two failed approaches for Teck in recent years. It’s now (painfully) looking on as two of its competitors pursue a potential combination.

Rio Tinto and Glencore previously held deal talks in late 2024, but they ended over issues including valuation, the chief executive, and the future of Glencore’s coal mines. 

There’s been at least one big change since then: Rio Tinto has appointed a new chief executive, Simon Trott, who took over in August. Maybe that’s enough to get things over the line. 

Under the terms of the UK takeover code, Rio Tinto has until February 5 to either make an offer for Glencore, or state that it doesn’t intend to do so.

After a record number of megadeals were announced last year, an investment banker told DD in December that dealmaking in 2026 would come “out of the gate like a lion and leave like a lamb”. This may be your lion.

The stores are part of the previously disclosed plan to close about 150 department stores, leaving 350 that will continue to operate.

Macy’s Inc., continuing to execute on its three-year “Bold New Chapter” reinvigoration strategy, disclosed 14 Macy’s locations that will be closed this year.

“In executing our strategy, we continue to review our portfolio and make careful decisions about where and how we invest, including closing underproductive stores and streamlining operations,” Tony Spring, chairman and chief executive officer of Macy’s, wrote to employees in a memo, a copy of which was obtained by WWD.

“These decisions are not made lightly,” Spring wrote. “We communicated directly with affected colleagues first and are providing support, including transfer opportunities where available, as well as severance and outplacement resources where applicable. We thank all those colleagues for their dedication and service to the company.”

The 14 locations are part of the previously announced plan to close approximately 150 Macy’s department stores, leaving 350 remaining. In 2025, 66 stores were closed.

The strategy also calls for investing in 125 “Reimagine” stores, which are receiving increased staffing in high-traffic areas such as women’s shoes and the fitting room areas, fresher products and improved visuals. Last quarter, the 125 stores achieved comparable sales growth of 2.7 percent. They continue to outperform the overall Macy’s department store chain.

“These targeted changes allow us to focus where it will have the greatest impact — reimagining our best stores, enhancing customer service, expanding our luxury business, and advancing our supply chain capabilities,” Spring said.

“Nearly two years into our Bold New Chapter strategy, the focus of our work remains the same: strengthen our stores, simplify how we operate, and invest in the experiences that matter most to our customers. Today, that work is centered on disciplined execution and continuous improvement, with strategic investments that are guided by what customers value most.”

Spring also indicated that Macy’s net promoter scores are improving, that Bloomingdale’s delivered 9 percent comp sales growth during the third quarter, Bluemercury delivered its 19th consecutive quarter of comp sales growth and the supply chain is being modernized.

The 14 stores being closed are:

Fox Run – Newington, N.H.

Livingston – Livingston, N.J.

Marley Station – Glen Burnie, Md.

Boulevard – Amherst, N.Y.

Crossroads Center – St. Cloud, Minn.

Rivertown Crossings – Grandville, Mich.

West Valley Mall – Tracy, Calif.

Pittsburgh Mills – Tarentum, Pa.

La Palmera – Corpus Christi, Tex.

Northlake Mall – Atlanta

Triangle Town Center – Raleigh, N.C.

Grossmont – La Mesa, Calif.

Interstate – Ramsey, N.J.

Budget House – Tukwila, Wash.

The e-commerce giant has been widely rumored to be in talks with Saks Global, but a source familiar with the situation said the two sides aren’t close to a funding deal.

Saks Global’s potential path into the future might be narrowing.

While industry dealmakers said earlier this week that the retailer was in talks with Amazon as it races to fix its finances, a source close to the situation threw cold water on the notion that the talks had gone very far.

They also said that Richard Baker, chief executive officer of Saks Global, did not meet with Amazon founder Jeff Bezos, as was widely buzzed about.

The rumors and speculation that Amazon and Saks are close to a deal for Amazon to provide additional funding for Saks or that Richard Baker met with Jeff Bezos are unfounded, said the source.

There is always some down-to-the-wire confusion when high-profile companies are fighting for their financial futures.

Saks Global missed a more than $100 million interest payment on Dec. 30 and is now in the midst of a 30-day grace period where it can explore its options.

Increasingly, experts see a bankruptcy in the offing, although Baker has been said to be looking to avoid a filing. On Wednesday, Standard & Poor’s downgraded Saks Global’s credit rating to “selective default” and said, “We do not believe the company will make the payment within its 30-day grace period given its ongoing liquidity issues.”

Even if a Saks-Amazon deal isn’t coming together right now, the two companies share close ties.

Amazon helped Saks Global buy Neiman Marcus Group in a $2.7 billion deal just over a year ago that ultimately left the retailer struggling under too much debt.

The e-commerce giant also hosts a Saks shop that launched last year and has been keen to truly break into the luxury space in fashion after years of effort.

But given just how far in the hole Saks Global is — the company now has $2.8 billion in bonds, bank debt and a long list of past-due bills from vendors — Amazon could also decide to step in later if the company does file for bankruptcy.

If that were the case, Amazon probably wouldn’t be the only interested player.

Authentic Brands Group, which has its own ties with Saks Group through a joint venture, is also said to be taking an interest in the process. And if it does go to bankruptcy court, that’s familiar ground for the brand management company that has grown to annual retail sales of $32 billion, in part by scooping up failed businesses.

A spokesperson for Saks Global did not immediately comment and Amazon declined to comment.

Talks on a deal to create world’s largest mining group come as race to secure copper reshapes sector

Glencore and Rio Tinto have restarted talks over a potential megamerger to create the world’s largest mining company, nearly a year after previous deal discussions between the global miners collapsed.

The deal, which was under discussion as recently as this week according to people familiar with the matter, would create a mining behemoth with an enterprise value of more than $260bn, at a time when the race for copper is reshaping the sector.

The recent combination of Anglo American and Canada’s Teck Resources — a friendly deal done at zero premium — has put pressure on rivals such as BHP and Rio Tinto to bulk up as miners vie to secure access to more copper resources.

Copper prices this week hit an all-time high of more than $13,300 per tonne, underscoring a market shortfall that analysts warn could reach 10mn tonnes by 2040.

A full combination of Rio Tinto and Glencore was one of the options under discussion, according to people familiar with the matter, although the exact contours of a potential deal could not be determined.

It is unclear whether Glencore’s extensive trading operations would be included in any merger. The talks could still falter with the companies choosing not to proceed, warned people familiar with the matter.

The talks restarted late last year and are still at a preliminary stage, according to people familiar with the matter. Rio Tinto and Glencore declined to comment.

Switzerland-based Glencore has recently rebranded itself as a copper growth company, with chief executive Gary Nagle telling investors in December that it would become the “biggest copper producer in the world”.

The company is currently the world’s sixth-largest copper producer and largest listed coal producer. Its expansion plans, which include developing a new copper mine, El Pachón, in Argentina, would lead to it producing 1.6mn tonnes of copper annually by 2035, roughly double current levels.

Rio and Glencore previously held deal talks in late 2024, but these ended over issues including valuation, the chief executive, and the future of Glencore’s coal mines.

Since those talks ended, Rio has appointed a new chief executive, Simon Trott, who took over in August. Trott has focused on cost-cutting and streamlining, and has put several assets including Rio’s large boron mine in California under strategic review.

Meanwhile, Glencore has restructured its coal holdings into a separate, Australia-based entity, a change it confirmed in May. Analysts said the new structure would make it easier to spin out the coal mines into a separate company, an option that Glencore examined last year.

Rio got out of the coal business years ago, selling its last mine in 2018. Analysts believe it may be reluctant to get involved with coal again.

Glencore’s share price has risen 35 per cent over the past six months, buoyed by rising commodity prices and its new copper strategy. Rio Tinto’s has gained 41 per cent over the same period.

Speaking to reporters in December, Glencore’s Nagle said the mining industry lacked scale and relevance because of the size of its companies.

“It makes sense to create bigger companies,” he said. “Not just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital.”