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The Morning Ledger: AstraZeneca CFO Defends Share Sale to Raise Funds
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AstraZeneca’s decision to turn to the stock market was partly motivated by a desire to protect its credit rating. PHOTO: ANDREW YATES/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Hello. A $3.5 billion stock sale announced last month by U.K. drugmaker AstraZeneca PLC—its first in 20 years—has polarized analysts and investors and forced the company’s finance chief to defend the funding move, reports CFO Journal.
“There is nothing wrong with it,” Chief Financial Officer Marc Dunoyer said of the decision. While AstraZeneca doesn’t regularly sell new shares, this was an opportunity to invest in an asset that has the potential to transform the company, he added. The Cambridge, England-based company is using the proceeds to help fund an investment of up to $6.9 billion in shared rights for a new cancer treatment and pay down $1 billion in U.S.-dollar-denominated debt due Sept. 18.
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The shared-rights deal, struck with Japanese drugmaker Daiichi-Sankyo Co., will help AstraZeneca expand its portfolio of oncology drugs, analysts said. But the unusual funding source sparked concern among some analysts and investors.
AstraZeneca’s decision to turn to the stock market was also motivated by the desire to protect its investment-grade credit rating. “We knew that if we had tapped the bond market, our credit rating would have been stretched,” Mr. Dunoyer said. “We don’t want to be at the bottom of the pack.”
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Stocks: U.S. futures pointed to opening gains of 0.1% for both the Dow Jones Industrial Average and the S&P 500.
Currencies: The WSJ Dollar index, which measures the greenback against a basket of 16 of its peers, slid 0.1%.
Treasurys: Yields on 10-year U.S. Treasurys edged up to 2.509%, from 2.506% on Friday.
Commodities: Brent crude shed 1.1% to $70.82 a barrel. Gold slid 0.3% to $1,284.50 an ounce.
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The U.S. Commerce Department releases personal income and spending data for March, as well as fresh inflation data. Economists surveyed by The Wall Street Journal forecast personal incomes grew 0.4% in March, while projecting consumer spending climbed 0.7%.
Alphabet Inc., Canadian National Railway, Chegg Inc., Cooper Tire & Rubber Co., MGM Resorts International, Yum China Holdings Inc., NXP Semiconductors NV, Tenet Healthcare Corp. and Western Digital Corp. are among the companies scheduled to report earnings today.
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On Tuesday, China will release its official gauge of factory activity for April. Economists expect the official manufacturing purchasing managers index to edge down to 50.4 from March’s 50.5. The European Union's statistics agency publishes its preliminary estimate of eurozone economic output in the first three months of the year. France and Italy also release growth figures.
On Wednesday, another round of trade talks between the U.S. and China will commence in Beijing. The U.S. Federal Reserve releases a policy statement. The Bank of England meets a day later on Thursday to discuss monetary policy.
On Friday, the U.S. Labor Department publishes the April jobs report. Economists surveyed by The Wall Street Journal forecast nonfarm payrolls grew by 185,000 in April and the unemployment rate remained at 3.8%.
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Deutsche Bank's headquarters in Frankfurt, Germany. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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The scuttled tie-up between Deutsche Bank AG and German rival Commerzbank AG underscores the uneven recovery between lenders on either side of the Atlantic and how decisions made during the financial crisis are reverberating today. The collapse of the merger leaves Berlin few tools to prop up the two lenders.
Bayer AG’s supervisory board said Saturday that it stands behind the company’s management after a majority of shareholders refused to ratify management’s actions in 2018, Bloomberg reports.
Gardner Denver Holdings Inc. is nearing a deal to merge with a division of Ingersoll-Rand PLC, in a combination that would create the world’s second-largest manufacturer of industrial pumps and compressors.
Many pharmaceutical companies expect cancer treatments to drive growth in the coming years. One notable exception: the world’s largest cancer-drug maker, Roche Holding AG.
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5.4 Million
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The number of people that are likely to be affected if PG&E Corp. blacks out homes in fire-prone areas of California during high winds.
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The cockpit of a grounded Lion Air Boeing 737 Max 8 aircraft at Soekarno-Hatta International Airport in Indonesia. PHOTO: DIMAS ARDIAN/BLOOMBERG NEWS
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Boeing Co. didn’t tell airlines or federal authorities that it had shut off a safety system on its 737 MAX jets that warns pilots about malfunctioning sensors. Accident investigators have linked such bad data to the deadly Ethiopian Airlines and Lion Air crashes.
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U.S. aviation regulators and congressional investigators are looking into complaints by roughly a dozen purported whistleblowers alleging safety problems with Boeing's beleaguered 737 MAX jets, according to government officials familiar with the matter.
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Tesla Inc. Chief Executive Elon Musk reached a deal Friday with U.S. regulators that would eliminate the risk of him being held in contempt for allegedly violating an earlier court order over his use of Twitter.
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President Trump’s push to revamp North America’s trade rules is hitting a roadblock in Washington as Democrats and labor groups demand changes, dimming its chances of passage before next year’s presidential election.
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“No one survives this kind of thing. It’s like the kiss of death.”
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— Modell's Sporting Goods Chief Executive Mitchell Modell on regaining the confidence of vendors after word got out that he had hired a restructuring firm.
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U.S. hogs remain free of African swine fever, a disease that has forced the culling of millions of hogs in China. PHOTO: DANIEL ACKER FOR THE WALL STREET JOURNAL
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A deadly disease sweeping China’s hog barns is reinvigorating the fortunes of U.S. meat companies.
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European stocks have been among the least liked investments for fund managers in recent months. Yet some investors, sensing Europe’s economic gloom lifting, are gingerly returning to the region.
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Young & Co.'s Brewery PLC, a U.K. brewer and pub operator, named Michael James Owen as chief financial officer, effective Sept. 9. Mr. Owen joins from Hall & Woodhouse, where he has been group finance director since 2016.
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