Longboard Pharma sold in $2.6bn deal

BY Richard Summerfield

Neuroscience specialist Lundbeck has agreed to buy Longboard Pharmaceuticals in a $2.6bn deal.

The transactions, which has been unanimously approved by the boards of both companies, is expected to close in the fourth quarter of 2024, subject to the tender of at least a majority of the total number of Longboard outstanding voting shares, receipt of required regulatory clearances, and other customary conditions.

The transaction values Longboard stock at $60 a share, representing $2.6bn in equity value and $2.5bn net of cash.

Longboard is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company is currently working on treatments for forms for epilepsy, including Dravet and Lennox-Gastaut syndromes. Its leading drug, bexicaserin, has shown promising anti-seizure effects in preclinical and clinical studies. Lundbeck estimates bexicaserin could bring in a peak of $1.5bn to $2bn in sales, assuming a launch in the fourth quarter of 2028.

“This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade,” said Charl van Zyl, president and chief executive of Lundbeck. “Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available. With this acquisition, we continue to execute on our Focused Innovator strategy, transforming the lives of patients suffering from severe brain disorders.”

“Longboard was founded to transform the lives of people living with devastating neurological conditions,” said Kevin R. Lind, president and chief executive of Longboard. “I am incredibly proud of what our team has achieved; delivering groundbreaking data with a differentiated and inclusive clinical approach to address the needs of a wide range of DEEs and obtaining Breakthrough Therapy designation.

“Lundbeck’s remarkable capabilities will accelerate our vision to provide increased equity and access for underserved DEE patients with significant unmet medical needs,” he added.

According to Mr van Zyl, the acquisition is part of Longboard’s broader focused innovator strategy. The strategy has already seen the company passing over the US rights for depression drug Trintellix to its partner Takeda in the summer in order to “create financial flexibility and reallocate resources to other growth opportunities”.

News: Denmark’s Lundbeck bets on epilepsy drug with $2.6 bln Longboard deal

Chevron to sell oil sands and shale assets for $6.5bn

BY Richard Summerfield

Chevron Canada, a subsidiary of Chevron Corporation, has agreed to sell its assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources in a $6.5bn deal.        

The all-cash deal is expected to close in Q4 2024, subject to regulatory approvals and other customary closing conditions, and is part of the company’s strategy to divest $10bn to $15bn of assets by 2028.

The deal will see Chrevon sell its 20 percent non-operated interest in the Athabasca Oil Sands Project, 70 percent operated interest in the Duvernay shale, and related interests, all located in Alberta, Canada, to Canadian Natural Resources. The assets contributed 84,000 barrels of oil equivalent per day (boe/d) of production, net of royalties, to Chevron in 2023. Canadian Natural Resources said that these acquisitions add targeted 2025 production of approximately 122,500 boe/d, and the addition of approximately 1448 million boe/d of total proved plus probable reserves.

“These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders,” said Scott Stauth, president of Canadian Natural. “We have made significant progress in driving efficiencies at AOSP over the last 7 years since the original acquisition in May 2017. We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement.

“The light crude oil and liquids rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play,” he continued. “Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long term shareholder value.”

“This is a great opportunity to add to our world class Oil Sands Mining and Upgrading asset at AOSP, as well as light crude oil and liquids rich assets in Alberta,” said Mark Stainthorpe, chief financial officer of Canadian Natural. “Both of these acquisition properties are targeted to provide significant free cash flow generation on a go forward basis. Having operated the AOSP mines and knowing the assets well, eliminates the risks associated with a brownfield or greenfield project. These transactions are immediately cash flow and earnings accretive to Canadian Natural shareholders.

“Given our strong balance sheet and significant free cash flow generation we are in an excellent position to take advantage of these opportunities that don’t come along very often,” he added.

News: Chevron to sell assets worth $6.5 billion to Canadian Natural Resources

ADNOC agrees $16.4bn Covestro deal

BY Richard Summerfield

Abu Dhabi’s state-owned oil firm, Abu Dhabi National Oil Company (ADNOC), has agreed to acquire German chemicals firm Covestro for $16.4bn. The deal comes as ADNOC begins to diversify amid the volatility of oil markets.

To acquire Covestro, ADNOC will offer €62 per share. This represents a 54 percent premium over Covestro’s stock price before initial speculation about a potential deal began in June 2023, and a 21 percent premium to the closing price on 23 June 2024, the last share price prior to Covestro announcing the beginning of the confirmatory due diligence and the start of concrete negotiations. The transaction will be financed through ADNOC’s available cash.

According to ADNOC, the transaction is key to the firm’s international growth strategy as it aims to become a top-five chemicals player globally. A former unit of Bayer, Covestro manufactures polymer materials for construction and engineering processes. Its products are used in sectors such as sports and telecommunications, as well as in the chemical industry.

The deal also saw ADNOC sign an investment agreement under which it pledged to provide additional funding by buying €1.17bn worth of new Covestro shares from a capital increase at an offer price of €62, which Covestro will use to foster the further implementation of its growth strategy.

“We are convinced that the agreement reached today with ADNOC International is in the best interest of Covestro, our employees, our shareholders, and all other stakeholders,” said Markus Steilemann, chief executive of Covestro. “With ADNOC International’s support, we will have an even stronger foundation for sustainable growth in highly attractive sectors and can make an even greater contribution to the green transformation. We regard ADNOC International as a financially strong and long-term oriented partner with whom we will further drive our successful ‘Sustainable Future’ strategy in all market conditions. Our complementary growth strategies, shared commitment to advanced technologies, innovation and sustainability are key cornerstones of our partnership.”

“As a global leader and industrial pioneer in chemicals, Covestro brings unmatched expertise in high-tech specialty chemicals and materials, using advanced technologies including AI,” said Sultan Ahmed Al Jaber, managing director and group chief executive of ADNOC. “This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future proofing strategy and our vision to become a top 5 global chemicals company. It represents a pivotal step for both organizations and embodies our disciplined approach to investing in strategic assets that drive long-term value and unlock new growth opportunities, while reinforcing our commitment to diversifying ADNOC’s portfolio. Our aligned strategies uniquely position us to meet the growing global demand for energy and chemical products, while accelerating the transition to a circular economy.”

News: Abu Dhabi's ADNOC to buy German chemicals firm Covestro for $16 bln

L&G exits Cala Group for $1.8bn

BY Richard Summerfield

Legal and General (L&G) is to sell its UK housebuilder Cala Group to investment groups Sixth Street Partners and Patron Capital in a $1.8bn deal, as part of a plan to slim down and focus on its main operations.

The deal will see L&G receive around £500m when the deal closes, which is expected to happen before the end of the year, and the rest of the cash over five years. The company plans to reinvest the funds in its wider operations, as well as supporting future shareholder returns. L&G paid more than £315m to buy Patron’s majority stake in Cala in 2018. Patron formerly owned Cala alongside L&G but in 2018 sold its stake in the company at an equity valuation of £605m.

“Today’s announcement is excellent news for Cala,” said Kevin Whitaker, chief executive of Cala. “This investment by Sixth Street and Patron demonstrates their confidence in Cala’s business plan and further potential. We look forward to developing a strong partnership with Sixth Street and reigniting the excellent relationship we shared with Patron between 2013 and 2018. I would like to thank Legal & General for their support since they first invested in Cala. With their backing, Cala has successfully tripled the number of homes we build each year, whilst revenue and profits have grown five- and ten-fold respectively.”  

“Cala has a bright future and we are proud to be entering this new chapter as stewards of a company with such a deep history and long track record of sustainable growth,” said Julian Salisbury, co-chief investment officer of Sixth Street. “We, together with Patron, look forward to continuing to support Cala and its management team, not only with capital but also with the significant resources of our London-based real estate investment team led by Giulio Passanisi.” 

“We are pleased to be able to back the Cala business once again,” said Keith Breslauer, managing director and founder of Patron Capital. “Cala is one of the UK’s leading housebuilders with a best-in-class landbank and a focus on building high-quality homes, being consistently ranked five-star for customer service. Furthermore, Cala is also a people business with a strong corporate culture and a business we know well, and we look forward to working closely with Cala’s impressive management team and our partner, Sixth Street, to further build the business and help tackle the undersupply of homes in the UK.” 

“This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses,” said António Simões, group chief executive of L&G. “Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 2013. The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders. I’d like to thank the whole Cala team for their contribution to the Group and wish them every success in the future.”

News: Legal & General sells UK housebuilder CALA Group in $1.8 bln deal

Mastercard acquires Recorded Future in $2.65bn deal

BY Fraser Tennant

In a deal that adds threat intelligence and cyber security technologies to its corporate portfolio, US multinational payment card services corporation Mastercard is to acquire threat intelligence company Recorded Future in a transaction valued at $2.65bn.

The combination of technology and expertise will help enable the development of even more robust practices and drive greater synergies in cyber security and intelligence, as well as helping to protect people and businesses.

“Trust is the foundation of any relationship,” said Craig Vosburg, chief services officer at Mastercard. “Recorded Future adds to how we deliver that greater peace of mind before, during and after the payment transaction. Together we will innovate faster, create smarter models and anticipate emerging threats before cyber attacks can take place – in payments and beyond.”

A current collaboration is an artificial intelligence (AI)-supported service that alerts financial institutions more quickly and with greater accuracy when a card is likely to have been compromised. Since its launch earlier this year, the service has doubled the rate at which compromised cards are identified, as compared to the same time period last year.

Headquartered in Boston with offices and employees around the world, Recorded Future works with over 1900 businesses and government organisations across more than 75 countries to provide real-time, unbiased and actionable intelligence.

The company offers real-time visibility into potential threats by analysing a broad set of data sources to provide insights that enable its customers to take action to mitigate risks. This ability, coupled with its use of AI and other best-in-class technologies, will add to Mastercard’s identity, fraud prevention, real-time decisioning and cyber security services.

“We created Recorded Future with a simple goal to secure the world with intelligence,” said Christopher Ahlberg, chief executive of Recorded Future. “By joining Mastercard, we see an opportunity to help more businesses and governments determine the steps to realise their full potential – and to enable everyone to feel safer in their daily lives.”

The transaction, which is anticipated to close by the first quarter of 2025, is subject to regulatory review and other customary closing conditions.

As new technologies are introduced and adopted, the acquisition bolsters the insights and intelligence used to secure today’s digital economy – in the payments ecosystem and beyond.

News: Mastercard bolsters threat intelligence capabilities with $2.65 billion deal for Recorded Future