Daily Review

Eli Lilly acquired Loxo Oncology for $8bn.

Elliott Management acquired QEP Resources for $2.1bn. (FS)

Canyon Capital to vote against Ensco’s $2.4bn takeover of The Rowan Companies. (FS)

Pentair acquired Aquion for $150m.

Sears picked Abacus Advisory as its potential liquidator. (FS)

Starboard Value acquired a stake in Dollar Tree for $370m. (FS)

DXC Technology, a B2B multinational corporation that specializes in delivering end-to-end, information technology services and digital transformative solutions for large and mid-scale global organizations, acquired Luxoft, an international custom software development company, for $2bn. Pursuant to the agreement, all of the issued and outstanding Luxoft ordinary shares will be acquired for $59.00 per share in cash.

Together, DXC and Luxoft will offer a differentiated customer value proposition for end-to-end digital transformation by combining Luxoft’s digital engineering capabilities with DXC’s expertise in IT modernization and integration. The acquisition will accelerate the digital growth and scale-out strategy outlined by DXC at its Investor Day last fall and will broaden access to key digital talent.

Guggenheim Securities, Bank of America Merrill Lynch, Latham & Watkins and Harney Westwood & Riegels advised DXC. Credit Suisse, Conyers Dill & Pearman and White & Case advised Luxoft.

 

PPF Group announced its intent to acquire Nova Broadcasting, which offers television and news broadcasting services in Bulgaria, in February of 2018. The company was sold by MTG, a digital entertainment company based in Stockholm, for €185m ($210m). The deal was canceled due to its rejection by Bulgarian antitrust regulators.

Citigroup advised Nova and MTG. Allen & Overy advised MTG.

 

The European Union’s competition watchdog will decide by February 18 whether to approve a merger of the rail operations of Siemens, a German conglomerate company, and Alstom, a French multinational company operating worldwide in rail transport markets. The €15bn ($17bn) merger was announced in September 2017.

The concerns over how the merger would affect competition center around the supply of very high-speed rolling stock for trains such as the Eurostar which links Britain, France, Belgium and the Netherlands.

Alstom was advised by Cleary Gottlieb Steen & Hamilton, JP Morgan and Rothschild & Co, while Siemens was advised by Goldman Sachs, Latham & Watkins and Sullivan & Cromwell.

 

Sanofi, a French multinational pharmaceutical company, and Regeneron, a biotechnology company, revised their collaboration deal to develop two clinical-stage bispecific antibodies. Sanofi will pay Regeneron $462m representing the balance of payments due under their original deal and up to $120m in other development costs.

Sanofi shares fell 1.1% in response to the news.

 

The administrators of Banco Carige, an Italian bank based in Genoa, will meet with the heads of the fund that has propped up the troubled lender as the parties look to resolve an impasse standing in the way of the bank’s rescue. The bank's finances were severely hit when it failed to gain shareholder approval for an up to €400m ($455m) new share issue.

Carige’s failure to approve the capital increase triggered a stepping up of the coupon to 16% from 13%. That represents €51m ($58m) in annual interest, further stretching the loss-making bank’s finances.

 

Ophir Energy, an oil and gas exploration and production company based in London, expects to report a non-cash write-down of $300m in its full-year results after being denied the extension of a block license which houses a liquid natural gas project in Equatorial Guinea. The company, which is in talks to be acquired by Medco Energi Internasional, holds an 80% interest in the block which contains the Fortuna gas discovery.

Ophir said that Medco knew it was possible that it would not get the license extension for the block and that deal talks with the Indonesian company were continuing.

 

Chanel, a high fashion house that specializes in women's haute couture and ready-to-wear clothes, luxury goods, and fashion accessories, looks to strengthen its position in luxury watchmaking with recent investments including in small Swiss parts maker Kenissi. Chanel holds a 20% stake in the company, which it acquired in 2017 for $20m.

“The size of our investment has not changed and remains at 20%,” Chanel said, adding it was publicizing its holding ahead of the Baselworld trade fair in March.

Eli Lilly, a global healthcare company, acquired Loxo Oncology, a biopharmaceutical company focused on the development and commercialization of highly selective medicines for patients with genomically defined cancers, for $8bn or $235.00 per share.

 

"Lilly Oncology is committed to developing innovative, breakthrough medicines that will make a meaningful difference for people with cancer and help them live longer healthier lives," said Anne White, president of Lilly Oncology. "The acquisition of Loxo Oncology represents an exciting and immediate opportunity to expand the breadth of our portfolio into precision medicines and target cancers that are caused by specific gene abnormalities. The ability to target tumor dependencies in these populations is a key part of our Lilly Oncology strategy. We look forward to continuing to advance the pioneering scientific innovation begun by Loxo Oncology."

Deutsche Bank and Weil Gotshal and Manges advised Eli Lilly. Goldman Sachs and Fenwick & West advised Loxo Oncology. 

 

Elliott Management acquired QEP Resources, which operates as a natural gas and crude oil exploration and production company in the United States, for $2.1bn. The $8.75 per share offer represents a premium of 44%.

Elliott believes QEP "remains deeply undervalued" and says a sale of the company would be the best approach to deliver maximum value to shareholders.

 

Canyon Capital, which holds a 6.3% stake in The Rowan Companies, an offshore drilling contractor that provides well-drilling services to the petroleum industry, announced it would vote against the proposed takeover, claiming that the offer by Ensco undervalues the target.

“Canyon is a strong believer in the strength and quality of the company’s assets,” Canyon said. “Unfortunately, the proposed transaction does not reflect such a belief, and fails to offer Rowan shareholders adequate compensation.”

Rowan is being advised by Cleary Gottlieb Steen & Hamilton, Goldman Sachs, Kirkland & Ellis and Latham & Watkins. Ensco is being advised by Citigroup, HSBC, Morgan Stanley, Gibson Dunn & Crutcher and Slaughter & May.

 

Pentair, a leading water treatment company, acquired Aquion, which offers a diverse line of water conditioners, water filters, drinking-water purifiers, ozone and ultraviolet disinfection systems, reverse osmosis systems and acid neutralizers for the residential and commercial water treatment industry, for $150m.

The addition of Aquion and its affiliated dealer network, offering complete systems and solutions, will highly complement Pentair’s value chain in residential water offerings. This benefits consumers by increasing access as well as providing more choices to meet their water treatment needs.

Citigroup and Foley & Lardner advised Pentair. Baird and Quarles & Brady advised Aquion.

 

Sears, an American chain of department stores, picked Closter, New Jersey-based Abacus Advisory as its potential liquidator, should the $4.4bn rescue deal with chairman Edward Lampert end unsuccessfully. Lampert’s bid to rescue Sears through an affiliate of his hedge fund, ESL Investments, has fallen short so far.

The bid would preserve 425 Sears stores and up to 50k jobs across the United States, according to a letter delivered to Sears on December 28. A liquidation would put roughly 68k people Sears now employs out of work.

 

Activist investor Starboard Value bought a 1.7% stake in Dollar Tree, an American chain of discount variety stores. The investor is seeking majority control of the board and is also pushing for Dollar Tree to tweak its pricing model. Soon after obtaining the shareholding, Starboard urged Dollar Tree to sell its underperforming Family Dollar business and proposed replacing a majority of its board.

“We believe Dollar Tree should explore all strategic alternatives for Family Dollar, including a sale of the business,” Starboard Chief Executive Officer Jeffrey Smith said in a letter to the company.