WSJ : Stryker Has Made a Takeover Approach to Boston Scientific

Stryker Has Made a Takeover Approach to Boston Scientific
It’s unclear whether Boston Scientific is receptive to Stryker approach


Stryker Corp. SYK -3.41% has recently made a takeover approach to rival Boston ScientificCorp. BSX +8.29% , a move that would create a medical-device giant with a combined value of more than $110 billion, according to people familiar with the matter.
It is unclear whether Boston Scientific is receptive to the approach, and it is far from guaranteed there will be a deal. It comes amid a flurry of deal activity in the health-care sector as companies respond to industry and regulatory changes, demands for lower medical costs and the pressure to find new sources of growth.
A deal, should one be inked, would be one of the biggest of the year, given Boston Scientific’s market value of $44 billion Monday morning.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • HSBC -1%, (provides strategy update; targets ROTE greater than 11% by 2020)

Select metals/mining stocks trading lower:

  • AU -4.6%, GFI -2.2%, SBGL -2.1%, HMY -1.9%

Other news:

  • GNW 29.1% (receives approval from CFIUS to move forward with proposed China Oceanwide and Genworth Financial transaction)
  • PCG -4.7% (California Department of Forestry and Fire Protection investigators determine that 12 Northern California wildfires in the October 2017 Fire Siege were caused by electric power and distribution lines, conductors and the failure of power poles)
  • LTM -3.2% (reports May passenger traffic +3.4%, capacity rose by 6.1% and load factor fell 2.1 percentage points to 80.9%)
  • CIR -1.5% (announces that Colfax Corporation (CFX) has commenced an underwritten, registered secondary offering of 3,283,424 shares of CIRCOR common stock)
  • SHAK -1.2% (files mixed securities shelf offering; company also registers secondary offering, from time to time, of Class A common stock of approx. 12.32 mln shares by selling stockholders)

Analyst comments:

  • WLK -1% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
  • PK -1.9% (downgraded to Sell from Neutral at Goldman)
  • OAS -2% (downgraded to Hold from Buy at Jefferies)
  • NKTR -2.1% (downgraded to Neutral at H.C. Wainwright)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • N/A.

M&A news:

  • GNW +29.1% (receives approval from CFIUS to move forward with proposed China Oceanwide and Genworth Financial transaction)
  • RCII +3.4% (ends review of strategic and financial alternatives, provides updated Q2/FY18 guidance; received letter containing an increased offer to acquire the Company after publicly announcing end of strategic and financial alternative review process)
  • EVHC +3% (confirms deal to be acquired by KKR (KKR) for $46.00/share in cash, or ~ $9.9 bln)

Select EU financial related names showing strength:

  • CS +2.5%, SAN +1.1%, ING +0.8%, DB +0.5%

Other news:

  • TTPH +6.7% (presents data from pooled analysis of IGNITE1 and IGNITE4 Phase 3 trials evaluating Eravacycline)
  • PTC +4.5% (PTC & Rockwell Automation (ROK) announce strategic partnership, Rockwell Automation to make $1 bln equity investment in PTC at $94.50/share)
  • GPRK +3.7% (announced further expansion in the Neuquen basin in Argentina with the acquisition of Los Parlamentos block in partnership with YPF )
  • WEB +3.3% (Starboard (Jeffrey Smith) discloses 9.4% active stake)
  • FSLR +1.5% (slightly rebounding following last week's selloff)
  • DAKT +1.1% (slightly rebounding following last week's 19% decline)
  • VRX +1.1% (continued strength), TSLA +1% (continued strength)

Analyst comments:

  • FDC +4.7% (upgraded to Buy from Neutral at Goldman)
  • MTCH +2.8% (upgraded to Buy from Hold at Jefferies)
  • INCY +1.6% (upgraded to Outperform from In-line at Evercore ISI)
  • QLYS +0.9% (upgraded to Buy at Monness Crespi & Hardt)

>>> What to look at today - 11th of June 2018

Asian stocks pushed higher Monday, with limited fallout from a tumultuous G-7 meeting at the weekend. The dollar steadied and the yen retreated as President Donald Trump readied for his summit in Singapore Tuesday with North Korea’s Kim Jong Un.
Japanese, Hong Kong and South Korean shares showed modest gains while Chinese stocks underperformed. Australia’s markets were shut for a holiday. The Canadian dollar fell most among its G-10 currency peers in the wake of the G-7 meeting, which ended with deepening tensions over U.S. tariffs on imports from its allies and saw a dispute erupt between Trump and Prime Minister Justin Trudeau. The euro rose after Italy’s new finance minister confirmed his commitment to the common currency. Treasury yields edged higher, while S&P 500 futures pared losses.

Nikkei +0.55% Hang Seng +0.20% CSI -0.41% Shanghai -0.83% Shenzen -0.75%

Eur$ 1.1808 CNH 6.3984 CNY 6.4039 JPY 109.96 GBP 1.3420 CHF 0.9860 RUB 62.3026 WTI 65.54 -0.30%

S&P -0.07% EuroStoxx +0..35% FTSE +0.11% Dax +0.16% SMI +0.27%

Macro :
- Asset Quality Key in Oil E&Ps, Jefferies Says; Prefers Norway
- Italy Should Try to Stop Companies Relocating Abroad: Di Maio

Keep an eye on :
- ADP FP : France Proposal to Sell ADP, FDJ Stakes Is Advancing: Les Echos
- ASIT BB : Asit Biotech Chooses Asit+ Product Candidate for Peanut Allergy
- BARN SW : Barry Callebaut CEO Says This Year’s Cocoa Harvest Is Good: FuW
- BMW GY : German Authorities Respond to Fire at BMW Factory: Passauer
- BMW GY : BMW Could Build Sedans in U.S. to Avoid Tariff: Automobilwoche
- BOL FP : PSA Keen to Replace Bollore in Paris Car-Sharing Service: Echos
- ISP IM : BlackRock in Talks to Buy Minority Stake in Italy’s Eurizon: FT
- DB1 GY : Deutsche Boerse Growth Seen Below Consensus: Morgan Stanley
- DIS US : ‘Ocean’s 8’ Earned $15.8M on Friday, Variety Says
- DLG GY : Synaptics Is Said to Have Rejected $59/Shr Offer in March: CNBC
- IDIA SW : Idorsia Starts Phase 3 Registration Program for Insomnia Drug
- LSE LN : LSE Has More Upside On OTC Clearing Opportunity: Morgan Stanley
- OPHR LN : Asset Quality Key in Oil E&Ps, Jefferies Says; Prefers Norway
- UG FP : PSA Keen to Replace Bollore in Paris Car-Sharing Service: Echos
- RWE GY : RWE to Start Physical Iron Ore Trading in Singapore in 2H 2018
- GLE FP : SocGen Chairman Reiterates Mergers Aren’t a Priority: Figaro
- TEF SM : Telefonica to Bid for 5G Germany License, CEO Told Handelsblatt
- TIT IM : Italy’s Five Star Vetoes Siri for Telecom Post: Repubblica
- TUI LN : not planning to participate in the consolidation of the sector, The Daily Express reported.
- FP FP : Oil Price Seen Higher at Jefferies; Total, Equinor Upgraded
- VER AV : Verbund CEO Anzengruber to Remain Head of Company: Der Standard
- VM/ LN : CYBG Deal With Virgin Money Could Cost 1,500 Jobs: Telegraph
- YNAP IM : Richemont Sees Holding 98.3% of Yoox as Sell-Out Period Ended

>>> Barrons weekend summary: positive features on LUV; cautious on Lowes Cover s

Barrons weekend summary: positive features on LUV; cautious on Lowes
* Cover story: High-power batteries, which are set to disrupt the car industry in the coming decades, are quickly multiplying across the U.S. power grid, which will allow consumers to save on energy, towns to cut pollution and add jobs, and utilities to enjoy lucrative growth.

* Feature: 1) Positive on LUV: A recent midair accident, high fuel prices, and rivals’ expansion have pushed down the carrier’s shares, but with its strong business model and share buyback plans, the dip poses an opportunity for investors; 2) Hedge funds including BlueMountain Capital, Citadel, Apollo Global Management, Elliott Management, and Anchorage Capital Partners have been working together for months to fix credit-default-swap contracts; 3) Cautious on L: Conglomerate’s disclosure it may buy out the limited partners of BWP, which it controls, has prompted angry reactions from some minority investors who fear Loews will exercise its call right at an unfair price.

* Tech Trader: “These days the difference between expensive and inexpensive tech stocks is misleading. Many companies are having a hard time holding onto any valuation premium, whether or not their shares are relatively cheap or relatively pricey.”

* Trader: Michael Hartnett, chief investment strategist at BAC/Merrill Lynch, says it’s possible markets will see the return of “1998 risk,” in which the problems in emerging markets grow and eventually force investors in the U.S. to take defensive action; Positive on AABA: The company “remains a good proxy for investors seeking exposure to BABA” because of Altaba’s 15% stake in the e-commerce giant; In a new MIT working paper, researchers say that “managers seem tempted to overstate earnings as their companies gain attention and the rewards for lying increase.”

* Interview: Jenny Van Leeuwen Harrington, portfolio manager and CEO of Gilman Hill Asset Management, says a company’s dividend should be sacrosanct, even in tough economic times (picks: SIX, LB, QCOM). Profile: Magnus Larsson, lead manager of the AMG TimesSquare International Small Cap fund, says international small-mid-cap stocks are one of the few market sectors where active management can consistency add value.

* The Top 100 Women Financial Advisors: Barron’s annual list is topped by Karen McDonald of Morgan Stanley Wealth Management, Kimberlee Orth of Ameriprise Financial, and Valerie Newell of RiverPoint Capital Management.

* Follow-Up: Cautious on SBUX: With chairman Howard Schultz stepping down, “the time might be right for an activist investor to push for change—and presumably push Starbucks shares higher,” a move that would have to focus on capital allocation.

* European Trader: Uncertainty related to Trump administration auto tariffs has dented shares of German car makers, but they should quickly regain lost ground.

* Emerging Markets: The real problem for the Chinese stock market isn’t U.S. tariffs, but the nearly 170% of GDP in debt piled up by Chinese corporations, five times the proportion for U.S. companies.

* Commodities: “Copper has shown promise in recent weeks, and the long-term outlook is bright as global demand gradually strengthens, but realizing that potential may take time.”

* Streetwise: A potential presidential run by departing SBUX chairman Howard Schultz would have to reckon with a crowded field, and some of his ideas don’t match up with core Democratic Party ideas.