The year 2014 saw $3.5 trillion in merger and acquisition (M&A) transactions, the most since 2008, and according to KPMG data, this year could be even bigger. The highly acquisitive Canadian pharmaceutical company, Valeant (VRX), recently added to 2015’s already growing total by entering a deal to purchase Salix Pharmaceuticals (SLXP) for a total value of $14.6 billion. (more…)
A 587 Million Dollar Stake
At the start of the month, Sunac China Holdings Limited took a risk and bought 2.54 billion shares giving them a 49.3 percent stake in the struggling Chinese developer, Kaisa Group Holdings Ltd. The large stake cost Sunac over $587 million, with shares at roughly $1.80, according to the Hong Kong stock exchange. This deal has made Sunac the largest shareholder in Kaisa.
Insider Trading Requirements: Second Circuit Case could have Major Consequences for Prosecutors
In the context of insider trading cases involving tippers, the personal benefit test is most controversial. To hold a tippee liable, prosecutors are required to prove the tippee’s knowledge of the personal benefit of the tipper when revealing the tip. On December 10, 2014, the United States Court of Appeals for the Second Circuit heightened the benefit requirement, which could have a major impact on insider trading cases to come.
American Express Loses Antitrust Fight against U.S. Department of Justice
On February 19, 2015, Judge Nicholas Garaufis of the U.S. District Court for the Eastern District of New York ruled that American Express violated U.S. antitrust laws with its practice of preventing merchants from encouraging customers to use some types of credit cards over others.
FDA Approves First Direct-to-Consumer Genetic Test After Year-Long Ban
Last week the U.S. Food and Drug Administration (FDA) granted approval to the personal genetic testing company, 23andMe, to sell a genetic carrier test for Bloom Syndrome directly to consumers. Bloom Syndrome is a rare inherited disorder associated with short stature and an elevated risk of cancer. This marks the first FDA authorization of a direct-to-consumer genetic test and creates a path towards regulatory approval for future related genetic tests.
RadioShack Filed for Chapter 11 Bankruptcy Protection
On February 5, 2015 electronics retailer RadioShack Corp. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, after reaching a deal to sell up to 2,400 of its stores to the hedge fund Standard General LP, one of the lenders and its largest shareholder.
Burger King’s Parent Poised for Continued Growth Despite Fourth Quarter Loss
Restaurant Brands International, the third-largest fast-food chain restaurant group in the world, posted a quarterly loss in the fourth quarter of 2014. The rather large net loss of $514.2 million, attributable to shareholders, is particularly significant because it marks the first quarterly financial data available since the formation of the group through Burger King’s purchase of Canadian coffee and doughnut chain Tim Hortons. The loss can primarily be explained by “one-time costs related to the merger.”
Puerto Rico District Court Strikes Down Debt Restructuring Law
Puerto Rico’s recently enacted debt restructuring law was struck down. On February 6, 2015, Judge Francisco Besosa of the United States District Court in Puerto Rico ruled that the law was unconstitutional and enjoined its enforcement.
CIT and One West to Merge
Commercial Investment Trust, a private commercial lender that focuses mainly on middle-market lending in various industries, recently announced its intent to acquire fellow bank One West. The CEO of CIT, John Thain, wants to take advantage of the synergies that will be created by marrying the commercial lending of CIT to the residential lending that dominates One West’s asset sheet. Yet investors may not be as keen on the deal given the two banks rocky experiences with the financial crisis.
Payday Lenders’ Extortionate Practices Face Consumer Protection Crackdown
For many Americans who survive from one paycheck to the next, payday loans are one of the only forms of credit available. However, while providing emergency credit is a vital service, these loans often carry shockingly high interest rates that have drawn increased scrutiny from the Consumer Financial Protection Bureau. In order to finally address these predatory lending practices, the CFPB expects to hand down its first set of federal rules regulating this 46 billion dollar industry in the coming weeks.