US stock futures were almost flat on the final trading day of 2020 in what looks like a muted finish to an eventful year. After declining sharply earlier in the year due to the pandemic, markets rebounded strongly as investor sentiment improved backed by government stimulus. Over the recent days, COVID-19 vaccine roll-outs and the second round of stimulus influenced market movements.
In Thursday’s pre-market, futures tied to the S&P 500 and Dow Jones were down 0.03% and 0.07%, respectively, while the Nasdaq futures were up 0.09% at the time of writing.
Energy giant Exxon Mobil (XOM) is set to write down as much as $20 billion on its upstream assets despite an improvement in chemical margins driven by higher oil and gas prices during the fourth quarter. The company expects to write down between $18 billion-$20 billion of its natural gas assets in 4Q. The leading US oil producer posted losses in the first three quarters this year as the pandemic significantly weakened fuel demand and prices.
In M&A news, UGI Corporation (UGI) has signed an agreement to acquire Mountaintop Energy Holdings LLC, owner of Mountaineer Gas Company, the largest local gas distribution company in West Virginia. The $540 million acquisition is expected to close in the second half of 2021. The acquisition is in line with the company’s strategy to expand its presence in the natural gas and renewable energy space. UGI expects the Mountaineer Gas acquisition to increase its regulated utility rate base and customers served by nearly 14% and 30%, respectively.
Tiffany (TIF) shareholders approved the merger of the luxury jewelry retailer with French luxury goods giant LVMH, after the deal was initially announced more than a year back. At the special meeting held on Dec. 30, over 99% of Tiffany stockholders voted in favor of the merger. The $15.8 billion deal is expected to close on January 7, 2021.
Following a dispute between the two companies, the deal was saved after Louis Vuitton owner LVMH on October 29, 2020 agreed to acquire Tiffany at a lower price of $131.50 per share, down from the $135 proposed originally.
Fiat Chrysler Automobiles (FCAU) disclosed that it has received a request to consider an alternative buyout proposal to the proposed merger to form STELLANTIS, from Frank B. Rhodes, Jr., the great-grandson of Chrysler Founder, Walter P. Chrysler. In December 2019, Fiat Chrysler Automobiles signed a 50-50 merger agreement with PSA Group (Peugeot) to create a Dutch-based multinational automotive company called STELLANTIS.
However, Rhodes, who has filed an objection to the proposed merger, recommends that the existing agreement with STELLANTIS be terminated, a cash price be negotiated, and all existing debt be paid off. Existing shareholders will then be granted the option to buy shares in the buyer entity if it goes public in the future.
Media giant Walt Disney Company (DIS) is being sued by Mexican soccer club, Santos Laguna, for damages resulting from alleged contract violations, Reuters reported. The litigation is related to a deal that the club signed with FSLA Holdings, formerly a unit of Fox, covering broadcast rights of games both in Mexico and internationally beginning in the 2019/2020 season. The lawsuit claims that contract violations resulted from Disney’s acquisition of Twenty-First Century Fox last year. Following the acquisition, Disney agreed to divest itself from FSLA, which is now known as TFCF Holdings. As per Reuters, Disney spokesperson stated, “We believe the claims are utterly without merit and will defend against them vigorously.”
In healthcare news, Incyte (INCY) has entered into a global collaboration agreement with Cellenkos, a privately held, clinical-stage biotech company, for evaluating the combination of ruxolitinib (Jakafi) and CK0804, cord blood-derived T-regulatory cells, in patients with myelofibrosis. Under the deal, Incyte has an exclusive option to acquire sole rights to CK0804, and genetically-modified variants of CK0804, in benign and malignant hematology indications.
