Tuesday proved to be the ebb to Monday’s flow. The major indices cracked amid a drop in oil prices, with the S&P 500 off 1.5%, the Dow Jones Industrial Average down 1.4% and the Nasdaq Composite 1.1% lower by day’s end.
Here’s what’s you should know heading into today’s trading day:
Monsanto Company (MON)
It was just a matter of time.
MON shares weren’t getting much of a ride out of it, but they were up on news that the buyout by Bayer AG (ADR) (OTCMKTS:BAYRY) is, in fact, a go.
The German life sciences company has been trying for months to bring Monsanto under the fold to bolster its agricultural holdings. Bayer first lobbed a $122-per-share offer at Monsanto back in May that was promptly rejected. Another offer back in July — at $125 per share — was kicked to the curb, too.
Monsanto sweetened the deal yet again, offering $127.50 just last week. At the time, a person familiar with the matter said “both sides are gradually nearing consensus.”
Apparently, they were awfully close.
Bayer’s successful offer this time came to $128 per share, or about $66 billion, and the deal will include an antitrust break fee of $2 billion. That will set a few records, including the largest cash buyout in history.
MON shares are up about 1% in Wednesday’s premarket trade.
Herbalife Ltd. (HLF)
HLF stock was set for a strong open today after Carl Icahn commented on what the company’s position in the market should be moving forward.
The hedge fund manager said he believes Herbalife should go private during the CNBC conference Delivering Alpha. Icahn hopes regulators allow him to increase his stake in the company to 50%. The investor currently holds 20% of the company’s shares; he can only go up to 35% for the time being.
In late August, Icahn and fellow billionaire Bill Ackman disagreed about where the company’s future lies, with the former restating his support for Herbalife’s potential in the market, while the latter claimed its business model is a scheme.
The FTC settlement in June seemed to split the middle, not actually accusing Herbalife’s business model of being a scam, but requiring several changes and a $200 million payout.
HLF shares are set to open Wednesday up about 3%.
Exelixis, Inc. (EXEL)
EXEL shares are looking strong this morning, too, amid positive news out of Europe.
Specifically, the European Union has approved the company’s tablet form of Cabometyx — a treatment for advanced renal cell carcinoma after VEGF-targeted therapy. That opens the drug up to 30 countries, including the 28 members of the European Union.
The upshot for EXEL? The approval will trigger $60 million in milestone payments as part of an agreement with Ipsen.
Furthermore, Exelixis will be able to continue to develop the treatment.
EXEL shares are up about 5% this morning on the news.