Wall Street set for bounce back, buoyed by vaccine hopes and acquisition news

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Wall Street

Stocks poised to start the week higher

U.S. stock futures were indicating a positive start for Wall Street on Monday amid signs of progress toward a coronavirus vaccine and acquisitions news.

Traders were cheering a slew of acquisition news and reports that AstraZeneca (NYSE: AZN) has resumed its experimental coronavirus vaccine trails in the U.K., which were halted after a participant who received the vaccine contracted an unexplained illness.

At around 5:30 a.m. ET, futures tied to the blue-chip Dow advanced 299 points, or 1.09% to 27,792. The S&P 500 futures jumped 42.13 points, or 1.27% to 3,365.38 while the tech-heavy Nasdaq 100 futures rose 159.13 points, or 1.44% to 11,207.38.

Gilead agrees to buy Immunomedics for 21 billion

On the acquisition front, Gilead Sciences (NASDAQ: GILD) has agreed to buy Immunomedics (NASDAQ:IMMU) in a deal that values the biopharmaceutical company at $21 billion.

The acquisition will strengthen Gilead’s cancer portfolio by gaining access to Immunomedics’ drug, Trodelvy, which is used to treat certain types of breast cancer and being studied for a number of other cancers.

Gilead will pay $88 per Immunomedics share in cash, or 108% premium to Immunomedics’ closing price on Sept. 11, 2020, the two companies said in a joint statement on Sunday. The companies said they expect to close the transaction in the fourth quarter of 2020.

Immunomedics shares gained 106.41% to $87.21 in Monday’s pre-market trading while Gilead shares were down 1.27% to $64.75.

Nvidia to acquire chipmaker Arm from SoftBank

Nvidia (NASDAQ: NVDA) is buying British chipmaker Arm Ltd from SoftBank Group’s Vision Fund, in a deal valued at $40 billion. Under the deal, SoftBank will become one of the biggest shareholders in Nvidia, which will pay the Japanese conglomerate $12 billion in cash and $21.5 billion in common stock.

An additional $5 billion cash payment will be made if Arm hits certain financial-performance targets, the companies said in a joint statement Sunday. Nvidia will also issue $1.5 billion in stock to Arm employees.

SoftBank acquired Arm in 2016 for $32 billion and had struggled to jump-start growth in the business. The companies expect to seal the deal in 18 months, adding that it will require approval of the U.S., EU, UK and Chinese authorities.

As of this writing, Nvidia shares were up $31.42, or 6.46% to 518 in pre-market trading session Monday.

TikTok parent chooses Oracle over Microsoft

Meanwhile, Oracle (NYSE: ORCL) is set to take over TikTok’s U.S. operations after the parent of the popular video-sharing app said it will not sell the operations to Microsoft (NASDAQ: MSFT).

The Wall Street Journal, citing people familiar with the matter, said Oracle won the bidding. According to the people, Oracle will be announced as TikTok’s “trusted tech partner” in the U.S., and the deal is likely not to be structured as an outright sale.

The move could help keep TikTok running in the U.S. after President Donald Trump threatened to ban it by Sept. 20 due to its alleged ties to the Chinese government. Microsoft, which was also in the running for the bid, confirmed over the weekend its takeover bid was rejected.

Oracle shares surged $5.80, or 10.18% to $64.00 in the pre-market trading session.

 

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