Rothschild to advise on potential RBS split: FT

Monday, July 1st, 2013 | Finance News

(Reuters) - The British government is set to name Rothschild to advise on a potential break-up of Royal Bank of Scotland , the Financial Times reported on Monday.

Rothschild beat competition from Deutsche Bank and Bank of America Merrill Lynch at presentations last week and its role as adviser could be announced as soon as this week, the newspaper said, citing people close to the situation.

Finance Minister George Osborne said last month he would examine whether to split RBS -- 81 percent owned by the government and still lumbered with toxic loans from a boom-era property binge in the UK and Ireland -- into a good bank and hive its soured assets off into a so-called "bad bank.

Rothschild is expected to begin its study on the potential split immediately, with a view to completing it by September, the FT said. It added that the Treasury is also expected to pick an asset valuation specialist to go through RBS' loan book.

"The government will set out more details on the review of RBS assets in due course," a Treasury spokesman said via email.

RBS and Rothschild declined to comment.

(Reporting by Abhishek Takle in Bangalore; Editing by Dan Grebler)


Pfizer, Novartis may join Amgen in bidding for Onyx: sources

Monday, July 1st, 2013 | Finance News

By Soyoung Kim and Jessica Toonkel

NEW YORK (Reuters) - Onyx Pharmaceuticals Inc , whose cancer drugs promise a strong revenue stream, is attracting preliminary buyout interest from several large pharmaceutical companies such as Pfizer Inc and Novartis AG , two people familiar with the matter said on Monday.

Onyx, a biotechnology company with a market value of around $9.5 billion, put itself up for sale on Sunday, citing "expressions of interest" from unnamed companies. It also said it had rejected a recent $8.7 billion offer from larger biotech Amgen Inc as too low.

Pfizer, which is due to pay Onyx royalties on a promising experimental breast cancer drug, and Novartis, with a strong franchise of cancer medicines, are among the parties interested in Onyx and its portfolio of marketed cancer treatments, the two sources said.

Amgen's $120-per-share offer in June was its first and the company did not indicate if it was the best and final, according to a third person familiar with the matter, who expected Amgen to participate in the auction process.

The offer represented a 38 percent premium to Onyx's Friday closing share price of $86.82.

Onyx surged 51.3 percent to close at $131.33 on Nasdaq on Monday, well above Amgen's offer, suggesting investors expect bids to go much higher.

San Francisco-based Onyx could appeal to a wider group of large biotech and pharmaceutical companies, including Bayer AG , AstraZeneca Plc and Merck & Co , several people familiar with the matter said.

All the sources in this story were not authorized to speak with the media and asked not to be identified.

An Onyx spokesperson declined to comment beyond the company's statement on Sunday that it would reach out to potential buyers.

Amgen, Pfizer, Novartis, Bayer and Merck declined to comment. AstraZeneca did not immediately return calls seeking comment.

Shares of other mid-size biotech companies that have long been rumored as potential takeover targets also rose on Monday, as takeover interest in Onyx underscored the sector's attractiveness.

Large pharmaceutical and biotech companies have been looking to acquire smaller biotech firms to gain access to new drugs, often high-priced cancer treatments, as they face significant revenue losses stemming from expired patents.

Ariad Pharmaceuticals jumped 11.7 percent to $19.53, Isis Pharmaceuticals Inc rose 5.95 percent to $28.47 and Seattle Genetics Inc climbed 3.97 percent to $32.71.

Onyx sells Nexavar, a treatment for liver and kidney cancer, and the new colon cancer drug Stivarga - both in partnership with Germany's Bayer. Onyx last year began selling Krypolis, which some analysts estimate will reach peak annual sales of $3 billion.

In addition to very high prices - some new oncology medicines can cost more than $100,000 per patient - cancer drugs are desirable because they require relatively small sales forces and tend to be covered by medical insurers.

Onyx is particularly attractive because it has three cancer drugs on the market - two of which are new with their best sales days ahead, while the third - Nexavar - is firmly established and being tested for additional uses. It has other promising drugs in its pipeline.


Amgen has faced growing pressure to beef up its drug development pipeline as safety concerns trimmed sales of its flagship anemia drugs. The company is best known for these and other medicines used in supportive care of cancer patients. Patents on four of Amgen's five top-selling drugs will expire, starting in 2015.

Amgen Chief Executive Bob Bradway, a former Morgan Stanley investment banker, took over from Kevin Sharer just over a year ago. Amgen shares have risen more than 30 percent since then as investors applauded the company's higher dividends and share repurchases.

Amgen's late-stage pipeline has several cancer drug candidates, including some acquired through takeovers.

The company, which held more than $21 billion in cash at the end of March, has not done a deal for more than $1 billion since its buyout in 2006 of Abgenix for $2.2 billion. Amgen's largest acquisition so far is Immunex Corp, which was valued at about $10 billion when completed in 2002.

(Adds dropped word, "Onyx", in seventh paragraph)

(Reporting by Soyoung Kim and Jessica Toonkel in New York, additional reporting by Bill Berkrot in New York and Deena Beasley in Los Angeles; Editing by Richard Chang)


Exclusive: Walmart to start work on opening in Peru – source

Monday, July 1st, 2013 | Finance News

By Omar Mariluz

LIMA (Reuters) - Wal-Mart Stores Inc will start work this year to eventually open stores in Peru and plans to form a local management team to run the effort, a source with the global retailer said on Monday, but a spokesman at Wal-Mart headquarters in the United States denied there were any such plans.

Wal-Mart spokesman Kevin Gardner said the company was only going to run a quality assurance office in Peru for procuring products.

Websites of Peru's public registry and national tax collection agency both showed the U.S.-based retailer has filed as "Walmart Peru" with authorities in recent days.

The source, who declined to be identified, said the company had ruled out buying a local chain of stores and that opening its own stores would take some time.

"Wal-Mart is entering Peru this year," the source told Reuters. "It is coming no matter what, before the end of the year, maybe in October."

"If you ask me if the store will be ready this year - well, no - because you have to start construction," the source said.

In April, Reuters reported Wal-Mart was eyeing an expansion into Peru, where retail sales are on track to grow 20 percent this year.

Wal-Mart already owns a plot of land in Lima that came with its purchase of Chilean retailer Distribucion Y Servicios several years ago. DyS does not operate stores in Peru, but does have an office.

Peru's retail sector has long been dominated by Chilean companies, and Wal-Mart's debut in Peru will likely heat up competition in the growing market.

Chain stores control just 15 percent of the retail business in Peru - compared to 60 percent in Brazil and Chile.

Wal-Mart already has a strong foothold in other Latin American countries, with more than 3,000 stores from Mexico to Argentina.

(Reporting By Omar Mariluz; Editing by Terry Wade and Carol Bishopric)