Yahoo Finance Trending tickers: Glencore | Novartis | Frasers | UBS
The latest investor updates on stocks that are trending on Monday
Glencore (GLEN.L)
Glencore has offered to buy Teck Resources’ steelmaking coal business for cash, it revealed to shareholders this Monday, in the latest twist in the $23bn takeover battle.
Under the fresh proposal, Glencore would buy Teck’s steelmaking coal business and then demerge the business unit together with its own energy coal assets one to two years after the deal closes.
Glencore has so far been thwarted in its attempts to buy all of Teck (TECK-B.TO), with the Canadian miner refusing to engage. Glencore had proposed merging the two companies’ metal businesses and creating a new coal-mining unit in a $23bn deal.
The Swiss commodities giant said it has approached the Canadian mining company to purchase its coal assets as part of an alternative to a previous plan to buy the entire company for $23bn (£18.3bn).
“Glencore’s purpose is not to win friends but to make money and it seems to have spotted an opportunity to do so at Teck Resources. Having attempted to buy the whole company, it is now offering to purchase the steelmaking coal part of the business which Teck has been attempting to spin off," AJ Bell investment director Russ Mould, said.
“There’s a merry-go-round of coal assets in the industry as companies don’t want to be left holding what is seen as a dirty fuel. Even for Glencore a plan to demerge Teck’s coal operations with its own within a couple of years of any deal suggests it wants to quarantine the rest of its assets from coal," he added.
Read more: FTSE up as UBS completes Credit Suisse takeover
Glencore said it remained “willing to pursue” its offer to buy the whole of Teck — including its North American industrial metal mines — and split into two separate businesses.
"If Teck is unwilling to consider a sale of Teck Metals at this juncture, an attractive 'middle ground' could be the sale of the coking coal assets to Glencore," Deutsche Bank analysts said.
"It would provide Teck with a cleaner exit from coal and allow Glencore to split its own business into CoalCo and MetalsCo."
Teck has said it has received several proposals for deals involving its coal operations.
Other parties are interested, including Canadian mining entrepreneur Pierre Lassonde and Japanese steel maker Nippon Steel Corporation (5401.T).
Novartis (NVS)
Swiss pharmaceutical giant Novartis has reached a deal to buy US kidney treatment developer Chinook Therapeutics (KDNY) for up to $3.5bn (£2.8bn).
Chinook Therapeutics, which is based in Seattle, is developing two medicines to treat a rare and progressive kidney disease that mostly affects young adults, Novartis said.
As many as three in 10 patients progress to kidney failure and dialysis within 10 years.
Under the agreement, Chinook shareholders will receive $3.2bn in cash, or $40 per share, which is 67% above Friday’s closing price.
They would receive an additional $300m, or $4 per share, “upon the achievement of certain regulatory milestones”.
The transaction, in the form of a merger of a newly formed Novartis subsidiary and Chinook, is expected to close in the second half of 2023, the Swiss drugmaker said in a statement on Monday.
Frasers (FRAS.L)
Mike Ashley’s Frasers Group has taken an 18.9% stake in the online electricals retailer AO World (AO.L) in a £75m deal.
The investment comes after ‘productive talks over the last two years about establishing a strategic partnership', the group said.
The deal will help Frasers expand its business delivering homeware ranges and bulk equipment. The retail giant is behind brands like Sports Direct, Jack Wills, Sofa.com and others.
Frasers Group is understood to have acquired shares from Odey Asset Management, as the business reels from the departure of founder Crispin Odey after allegations of sexual misconduct, which he denies.
AO World CEO John Roberts said:“As we continue to build on our strategy of pivoting to profitable growth, it will be hugely exciting to have a range of compelling strategic opportunities to explore together and we're very much looking forward to working with Michael and his team.”
The deal makes Frasers the second-largest shareholder in AO World, behind Camelot Capital Partners, with a 20.4% stake, and ahead of Roberts, with an 18.3% stake.
“Frasers is always one to spot a bargain and the big sell-off in AO’s share price – from above 400p in 2021 to sub-40p last summer – will not have gone unnoticed. It describes the investment as the foundation for forming a strategic partnership – while it is easy to speculate that Frasers will eventually acquire AO outright, it has form for taking equity stakes but not making full takeovers," AJ Bell's Mould said.
Read more: HMRC digital tax transformation to cost £1bn more
Michael Murray, who now runs Frasers Group, added: “AO is a fantastic business with a clear strategy which is leading the market in online-only electricals.
"Through this investment, Frasers will benefit from AO’s valuable know-how in electricals and two-man delivery, helping us to drive growth in our bulk equipment and homeware ranges. In turn, AO will have the opportunity to benefit from Frasers’ expertise and ecosystem.”
UBS (UBS)
Switzerland's UBS moved higher after announcing it had completed the takeover of its embattled former rival Credit Suisse (CS), which will cease trading.
Shares of the bank extended gains to 1% after it said it expected that Credit Suisse operating losses and “significant” restructuring charges would be offset by reductions in risk-weighted assets.
The combined Swiss banks will create a global wealth-management titan and ends Credit Suisse’s 167-years of independent existence.
UBS is to impose tight restrictions on its new bankers including a ban on new clients from high-risk countries and on complex financial products, according to the Financial Times.
Executives have reportedly drawn up a list of nearly two dozen “red lines” that prohibit Credit Suisse staff from a range of activities from the first day the two banks are combined.
Watch: Should We Still Ride The Inflation Winners?
Download the Yahoo Finance app, available for Apple and Android.
