>>> British chemicals firm Croda ends merger talks with Ashland - source - Reut

British chemicals firm Croda ends merger talks with Ashland - source - Reuters News

07-Feb-2018 14:54:21

By Ben Martin

LONDON, Feb 7 (Reuters) - British specialty chemicals maker Croda International Plc CRDA.L has ended talks with U.S. peer Ashland Global Holdings Inc ASH.N about a possible merger, a source familiar with the matter told Reuters on Wednesday.

The unsuccessful deal talks show that Ashland is viewed among its rivals as a potential target for consolidation in the sector, following the initial public offering (IPO) of its automotive lubricants unit Valvoline Inc VVV.N in 2016.

Croda, which has a market value of 5.6 billion pounds ($7.79 billion), ended talks with Ashland last month, the source said.

Details of the terminated discussions were not available.

Ashland, which has a market value of $4.5 billion, is active in more than 100 countries providing chemicals products to various industries including automotive, energy and construction.

Ashland did not respond to a request for comment.

>>> Seattle Genetics target raised to $74 at Needham

Seattle Genetics target raised to $74 at Needham -- Solid '18 ADCETRIS Guidance; Expect Frontline HL Approval, 3 Drugs in Pivotal (54.24)
Needham raises their SGEN tgt to $74 from $72. 4Q ADCETRIS sales of $83.7M were near their ests and at the top end of recently updated guidance of $82-84M. Seattle gave solid 2018 guidance for $340-360M in North American ADCETRIS sales, exclusive of sales in frontline HL which they expect to begin in 2H assuming approval in this indication by the May 1 PDUFA. Firm believes frontline HL sales will be significant and forecast $417M in sales including frontline HL, growing to >$1B by 2020. Seattle has two other late stage programs including Enfortumab Vedotoin (EV) which is in a pivotal trial for urothelial cancer and Tisotumab Vedotin (TV) which will start a pivotal study in cervical cancer in 1H. Last month Seattle signed a merger agreement with Cascadian Therapeutics that could provide a 4th pivotal stage asset in HER2+ breast cancer.

FT : Rio Tinto: steel yourselves

Rio Tinto: steel yourselves
China’s capacity cuts likely to damp the party mood in the near term

Last year was great, let’s do it again. Rio Tinto lifted its 2017 underlying earnings by 69 per cent to $8.6bn. The group committed to a record annual dividend and added to its buyback programme. Shareholders can gleefully count their booty — but should keep a watchful eye on China’s steel and aluminium capacity cuts.

Rio’s results were boosted by iron ore prices a fifth above those of the previous year. Operating margins before depreciation and amortisation exceeded those of any of the past decade. Nevertheless the group remains focused on cost reductions and shareholder returns. The group has cut $8.3bn from its cost base since 2013, but management highlights the risks posed by higher labour and raw material costs. Higher energy and input prices were already enough to offset cost cuts elsewhere last year.

Analysts at Macquarie estimate that miners will generate $80bn of excess cash in the next three years, including $14bn from Rio Tinto. Hopes for growth investment rest with China, given that most of Rio’s underlying earnings come from iron ore and aluminium. Yet both steelmaking and aluminium smelting are targets of Beijing’s drive to reduce overcapacity and air pollution.

Last year China cut steel capacity while increasing output. This boosted demand for the high-grade iron ore that Rio digs out of the Pilbara in vast quantities. When steel prices are high, steelmakers tend to prefer using high-grade ore. Aluminium capacity was cut by nearly a tenth, according to Rio Tinto.

Economists expect China’s growth to decelerate this year. The country’s regulators aim to tame the housing market, a big consumer of metals. Both could hurt Rio’s shares in the near term. And a sustained shift in the country’s approach to steel and aluminium would be significant for global markets as well as for returns on new projects.

Jean-Sébastien Jacques, Rio’s chief executive, is right to continue prioritising value over volume. But in order to justify buying the shares, investors need to believe that China’s Communist leaders will do the same.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • BBOX -17.2%, MTSI -15.5%, MANH -10.8%, CMG -8.4%, PAGP -8%, TCS -7.4%, MCHP-6.4%, HAS -6.3%, HAIN -6.2%, JCOM -5%, CDW -4.5%, OLN -3.9%, SITO -3.7%, NTGR-3.6%, SNY -3.4%, HCSG -3%, PAA -2.6%, PFPT -2.4%, EXTR -2.3%, GGP -2.3%, EXC-1.8%, XEL -1.7%, ACXM -1.4%, GILD -1.4%, PRO -1.4%, TKR -1.4%
Other news:
  • HK -4.9% (prices 8 mln shares of common stock at $6.90 per share)
  • JKS -4.1% (announces follow-on offering of 3,600,000 American depositary shares)
  • SMPL -4.1% (commences 8,843,714 common stock offering by selling stockholder Roark Capital )
  • TRGP -1.4% ( entered into development joint ventures with investment vehicles affiliated with Stonepeak Infrastructure Partners)
  • PDCE -1% (announces year-end 2017 proved reserves of appox 453 MMBoe )
  • RIG -0.9% (files mixed securities shelf offering; separately files for offering of up to 98,622,996 shares and approx $553 mln 0.5% exchangeable senior bonds due 2023 by selling securityholders )
Analyst comments:
  • PSTG -3.2% (initiated with a Sell at Goldman)
  • CBOE -3.4% (downgraded to Neutral from Overweight at JP Morgan)
  • ICPT -3.8% (downgraded to Sell from Neutral at Goldman)

>>> Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • SNAP +21.6%, AVXL +14%, GNW +11.3%, GAIN +10.6%, ACLS +10.3%, DPW +10.2%,NANO +8.2%, KORS +7.8%, SCSC +7.4%, MODN +7.3%, AKAM +7%, ZEN +6.6%, APC+3.7%, MTCH +3.7%, PXD +3.5%, (to divest its properties in South Texas, Raton and the West Panhandle field; terms not disclosed), CG +3.5%, ULTI +3.2%, AI +2.9%, MX +2.7%,USNA +2.5%, NEWR +2.4%, CVCO +2.4%, CTSH +2.2%, JLL +2.1%, DIS +2%, BLL +2%,STO +1.9%, TWO +1.7%, MNTX +1.2%, CAMT +1%, ICE +0.9%, CERN +0.8%, JEC +0.8%
M&A news:
  • PERY +12% (WSJ reporting that former exec made $27.50/share bid), SVU +2.6% (activist wants company to consider sale or breakup, according to WSJ), .
Other news:
  • NQ +17.9% (rebounding from 44% decline), AVXL +14% (Anavex is using advanced genomic biomarkets in CNS trials; filed to update IND for ANAVEX 2-73 for Rett Syndrome; plans to submit IND for Alzheimer's in 1H18; reports Q1), RIOT +9.7% (continued strength), WYNN +9.5% (CEO/Chairman Steve Wynn steps down; appoints President Matt Maddox as CEO; also - upgraded to Overweight from Neutral at JP Morgan), VSTM +8.6% (submits a NDA to the FDA seeking full approval for its lead product candidate duvelisib), REXX +6.8% (reports Q4 production at the high end of guidance range), EVTC +4.9% (to join S&P SmallCap 600), SGMO +4.6% (Sangamo Therapeutics and Case Western Reserve University announced the award of an $11 million grant from the National Institutes of Health for a planned study of gene-edited T cells), APC +3.7% (increases quarterly dividend to $0.25/share from $0.20/share; authorizes a $500-mln increase to previously announced $2.5 mln share-repurchase program, bringing the total repurchase program to $3.0 bln), REI +3.5% (will replace Boyd Gaming in the S&P SmallCap 600), TWTR +2.9% (following SNAP results), SIGA+2.6% (announces that the FDA has accepted for priority review the company's New Drug Application for its oral formulation of TPOXX), KALA +2.4% (Orbimed discloses the purchase of additional shares), JRVR +2.1% (to join S&P SmallCap 600), CHK +1.3% (average 2017 fourth quarter production projected at 593,000 boe per day), .
Analyst comments:
  • NTNX +4.6% (initiated with a Buy at Goldman)
  • CLF +4.1% (upgraded to Outperform from Underperform at Credit Suisse)
  • ALLT +3.4% (upgraded to Buy from Underperform at BofA/Merrill)
  • DISH +2.8% (upgraded to Buy from Neutral at Citigroup)
  • CME +1.5% (upgraded to Buy from Neutral at Goldman)
  • ANET +1.4% (initiated with a Buy at Goldman)
  • ACOR +1.4% (upgraded to Neutral from Sell at Goldman)
  • LB +1% (upgraded to Buy from Neutral at Northcoast)