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(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Novartis confirmed plans to purchase ocular gene therapy company Gyroscope Therapeutics in a deal that could see the Swiss pharmaceuticals firm pay up to USD1.5 billion. Gyroscope Therapeutics is a clinical-stage gene therapy company based in London and specialising in treating eye diseases. An upfront payment of USD800 million will be made as part of the deal, with potential additional milestone payments of up to USD700 million. Basel, Switzerland-based Novartis highlighted that the acquisition complements its expertise in retinal diseases and gene therapy and builds its position in ophthalmology gene therapy and optogenetics. Syncona, a London-listed investor in healthcare companies, has a 54% stake in Gyroscope following a USD42 million investment in March, after co-founding the business in 2016. In a bumper payday, Syncona will receive upfront cash proceeds of GBP334 million from the deal, representing a GBP180 million uplift to the current holding value.
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Croda International said it has agreed to sell the majority of its Performance Technologies and Industrial Chemicals businesses to Cargill for an enterprise value of EUR915 million on a cash-free, debt-free basis. Croda said the disposal of the businesses follows the strategic review that it announced in May. The operations being sold represent 77% of PTIC's 2020 revenue and consist of five manufacturing facilities in the UK, China and the Netherlands. "The divestment delivers Croda's transition into a focused Life Sciences and Consumer Care company with these two sectors accounting for well over 90% of the group's 2020 adjusted operating profit following completion," Croda said.
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Rio Tinto has agreed to buy the Rincon lithium project in Argentina for USD825 million. The miner said the deal to buy the large undeveloped lithium brine project underscores its commitment to build its battery materials business. The project is a long life, scaleable resource capable of producing battery grade lithium carbonate, it said. "The market fundamentals for battery grade lithium carbonate are strong, with lithium demand forecast to grow 25-35% per annum over the next decade with a significant supply demand deficit expected from the second half of this decade," Rio said. Once bought, Rincon will be subject to studies to confirm the resource, and work will be done to determine the development strategy and timing.
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BHP said it will not bump up its offer for Noront Resources to match the one on the table from Wyloo Metals. Earlier in December, Wyloo sweetened its offer for Noront to CAD1.10 per share, which is 47% above BHP's proposal of CAD0.75. Wyloo said the Noront board supported the latest bid. BHP was given the right to match Wyloo's proposal, but on Tuesday said it has decided not to. "BHP is committed to its strict capital discipline framework. While the Eagle's Nest deposit is a promising resource, we do not see adequate long-term value for BHP shareholders to support an increase in BHP's offer in order to match the CAD1.10 per share proposal from Wyloo Metals Pty Ltd," said BHP Chief Development Officer Johan van Jaarsveld.
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Beiersdorf has agreed to buy the Chantecaille prestige skin care business. "Through the acquisition of Chantecaille, Beiersdorf will complement its position in the premium skin care segment and seeks to enhance growth in particular in North America and the Asian markets," the Hamburg-based personal-care products retailer said. The enterprise value of the deal is between USD590 million and USD690 million, and it is expected the business generated global sales in excess of USD100 million in 2021. The acquisition is expected to close in the first quarter of 2022.
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NatWest's investment bank has plead guilty in US Federal Court to manipulating US Treasuries markets between January 2008 and May 2014. NatWest Markets plead guilty to one count of wire fraud and one count of securities fraud in connection with historical spoofing conduct by former employees. The lender also said the "spoofing" took place during three months in 2018. NatWest will pay USD25.2 million in a criminal fines; about USD2.8 million of criminal forfeiture; and about USD6.8 million in restitution.
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Taylor Wimpey has committed to removing terms from contracts that double ground rents for leaseholders every 10 years, the UK Competition & Markets Authority confirmed. Taylor Wimpey said the CMA investigation into the historical sale of leasehold properties with doubling ground rent clauses by the company is closed, following the agreement of voluntary undertakings. The High Wycombe, England-based housebuilder said the cost of the undertakings falls within the original provision Taylor Wimpey made in 2017. By entering into the undertakings there is no finding that Taylor Wimpey has infringed UK consumer law, it noted.
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UK property developer Land Securities bought a further stake in the Bluewater shopping mall outside London. Landsec said it has completed the acquisition of an additional 25% share in Bluewater from Lendlease Retail Partnership for GBP172 million, representing a net initial yield of 8.15% and an equivalent yield of 8.25%. In a separate deal, Landsec said it will sell 25% of this share - a 7.5% stake - to co-owner M&G for its pro rata share of the purchase price with the deal completing in April 2022. After this, Landsec's ownership of Bluewater will be 48.8%. Bruce Findlay, managing director of Retail at Landsec said: "We're making this acquisition at a time when retail values and rents are starting to stabilise. Together with our co-owners, we have a clear vision for Bluewater which builds on what is already a thriving retail destination. This investment underlines our strategic commitment to major retail destinations that offer something that can't easily be replicated online."
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MARKETS
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Equity prices were narrowly mixed in Europe after a mildly positive session in Asia, with little news to drive sentiment. Confirmation that neither the US nor UK will impose lockdowns before Christmas was taken positively. Wall Street was pointed slightly lower ahead of a US gross domestic product reading due at 1330 GMT. "Investors are preparing to go into hibernation for Christmas and will hope by this time next week we’ll know a lot more about the trajectory of Omicron and the likelihood of further restrictions to contain it, and just how long those curbs will be in place," commented Russ Mould, investment director at AJ Bell. Among companies in the news on Wednesday, Novartis shares were down 0.6% in Zurich, while Syncona shares were up 8.6% in London.
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CAC 40: up 0.1% at 6,969.30
DAX 40: marginally higher, up 4.42 points at 15,451.86
FTSE 100: marginally lower, down 1.54 points at 7,295.87
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Hang Seng: closed up 0.6% at 23,102.33
Nikkei 225: closed up 0.2% at 28,562.21
S&P/ASX 200: closed up 0.1% at 7,364.80
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DJIA: called down 0.1%
S&P 500: called down 0.2%
Nasdaq Composite: called down 0.4%
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EUR: up at USD1.1285 (USD1.1267)
GBP: up at USD1.3295 (USD1.3248)
USD: up at JPY114.30 (JPY114.14)
Gold: up at USD1,789.34 per ounce (USD1,785.40)
Oil (Brent): up at USD74.37 a barrel (USD73.48)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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US President Joe Biden on Tuesday sought to reassure Americans about the country's ability to battle the rapidly spreading Omicron variant, saying it was "prepared" to fight what is now the dominant coronavirus strain in the US. In a televised address, Biden formally announced a raft of new measures to combat the winter surge – including shipping half a billion at home tests – but denied his administration had failed to adequately prepare for the fresh wave of cases. "We should all be concerned about Omicron but not panicked," he said from the White House. "This is not March of 2020," he continued. "Two hundred million people are fully vaccinated. We're prepared, we know more. We just have to stay focused." Biden stressed the country's immunisation campaign would help prevent severe cases among the 62% of the population now fully vaccinated – while scolding the unvaccinated for failing to uphold their "patriotic duty."
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Germany's leaders have limited private New Year's parties to 10 people and banned spectators from football games to stem Omicron's spread, stopping short of imposing new coronavirus curbs before Christmas. Speaking after talks with Germany's 16 regional leaders, Chancellor Olaf Scholz said the country was facing "a fifth wave" as the new, highly contagious Omicron variant sweeps the globe. "We are all tired of the pandemic, but that doesn't help us, we must once again stand together," Scholz said as he announced new measures that will affect the vaccinated as well as the unvaccinated. From December 28, Germany will close nightclubs and dance venues, he said. In a bid to avoid large celebrations over New Year's, just 10 people who are vaccinated or have recovered from Covid-19 will be allowed to gather for private parties.
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UK Prime Minister Boris Johnson has given the go-ahead for people's Christmas plans, although he warned tougher restrictions could be implemented post-December 25. The prime minister said "continuing uncertainty" about the severity of the Omicron variant and hospital admission rates means he does not believe there is enough evidence at the moment to justify stricter measures. But the situation remains "finely balanced" and people should "exercise caution", Johnson added. In a video message, the prime minister said: "There is no doubt that Omicron continues to surge with a speed unlike anything we've seen before. The situation remains extremely difficult but I also recognise that people have been waiting to hear whether their Christmas plans are going to be affected.
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People infected with coronavirus in the UK can now take two lateral flow tests to reduce the self-isolation period from 10 to seven days. The UK Health Security Agency said that those infected with the virus can take two lateral flow tests 24 hours apart on day six and seven of their isolation period, which if negative means they can stop quarantining. The UKHSA said people who leave self-isolation on day seven are strongly advised to limit close contact with other people in crowded or poorly ventilated spaces, and to continue working from home. This comes after analysis by the UKHSA suggested that a seven-day isolation period alongside two negative lateral flow test results had nearly the same protective effect as a 10-day isolation period without testing.
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UK economic growth was revised lower in the third quarter on a quarterly basis but higher on an annual basis, figures from the Office for National Statistics showed. On the quarterly before, UK gross domestic product advanced by 1.1% in the three months to September, slower than a 5.4% rise in the three months to July, but missed consensus of an expansion of 1.3%, which would have matched the first estimate. On a year before, the UK economy grew by 6.8% in the third quarter, slowing sharply from the 24% annual growth rate in the second quarter. The latest reading slightly beat the market forecast, cited by FXStreet, of 6.6% annual growth, which also would have matched the first estimate.
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Producer prices for the home market in France rose by 3.5% in November from October and by 17% from a year ago, according to official statistics agency Insee.
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By Tom Waite; thomaslwaite@alliancenews.com
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