2023-12-18 18:23

Dec 18 (Reuters) - Activist investor Carl Icahn said on Monday that he plans to oust directors at Illumina (ILMN.O), laying the groundwork for a second board challenge at the gene-sequencing company months after shareholders elected one of his director candidates. Icahn disclosed his plans without offering details in a letter to other shareholders less than 24 hours after Illumina said it will divest blood test maker Grail. The billionaire investor had long been critical of Illumina's $7 billion Grail acquisition and made it a centrepiece of his previous proxy fight in which Andrew Teno, a portfolio manager working for Icahn, won a seat on the 11-member board. In Monday's letter, Icahn blamed the Grail acquisition, which has faced regulatory challenges since 2021, for a 75% drop in Illumina's share price that he says wiped away $55 billion in value for shareholders. The stock was up more than 2% at $130.39 on Monday. In October Icahn sued the board, accusing directors of breaching their fiduciary duties. Icahn cheered the company's decision to divest Grail, but said the job at Illumina has not been fully completed. "Our third goal is to remove these legacy conflicted directors," Icahn wrote in a letter that was made public in a regulatory filing. His first two goals were to push out former CEO Francis deSouza, who resigned in June, and get Illumina to divest Grail, the letter said. Illumina declined to comment. Illumina's legacy directors cannot be trusted to oversee the disposal of Grail, Icahn wrote. "It would be a great mistake to allow the legacy conflicted directors to influence Illumina given their history of reckless decision-making and value destruction." While Icahn has not revealed details about his plans, people familiar with his thinking note that only four directors - Scott Ullem, Teno, Stephen MacMillan and the company's new CEO Jacob Thaysen - played no role in recent decisions. This would suggest that Icahn, one of the industry's most feared activists, could target as many as seven directors, including a Nobel Prize winner and a former U.S. Food and Drug Administration Commissioner, for removal. A spokesman for Icahn declined to comment beyond the contents of the letter. Over the last months, the investor base has changed some at Illumina with more hedge funds increasing their holdings, regulatory filings show. Activist ValueAct, for example, listed Illumina as a new stake in its most recent 13-F regulatory filing. A greater concentration of hedge fund investors is often seen as a positive sign for a potential proxy contest as they are generally seen as ready to back a dissident investor's push for changes. https://www.reuters.com/business/healthcare-pharmaceuticals/icahn-aims-remove-illuminas-legacy-directors-letter-2023-12-18/

2023-12-18 17:54

Dec 18 (Reuters) - The U.S. Securities and Exchange Commission (SEC) has delayed its decision on the listing of the Grayscale Ethereum Futures Trust ETF, according to a regulatory filing on Monday. Grayscale joins a list of firms whose petitions have either been delayed or denied by the top U.S. markets regulator. Last week, the SEC denied a petition by Coinbase Global (COIN.O), seeking new rules from the agency for the digital asset sector. Coinbase later said it had filed a petition for review of the decision in court. The SEC also delayed crypto asset management firm Hashdex's Ethereum ETF on Monday, a separate filing showed. https://www.reuters.com/technology/us-sec-delays-decision-listing-grayscale-ethereum-futures-trust-etf-2023-12-18/

2023-12-18 17:19

TORONTO, Dec 18 (Reuters) - Bank of Nova Scotia (Scotiabank) (BNS.TO) is eyeing North America's booming $1.6 trillion trade with its renewed Mexico bet, a strategy that offers hope but brings risks that have seen many global lenders including Citigroup Inc. (C.N) scaling back. Scotiabank's new CEO Scott Thomson, who built a career specializing in Latam, sees the "Mexico First" strategy unveiled last week, offering clients in Canada, the United States and Mexico end-to-end trade finance, helping to differentiate Scotiabank among its Canadian rivals. The plan will see Canada's No. 4 lender move away from other struggling South American markets. Still, it will expose Scotiabank to a market with unpredictable political risks and where foreign banks have struggled to make inroads, analysts said. But that is not deterring Scotiabank. "Trade is a key component of why Mexico is attractive. ... When you see the connectivity of a North American corridor, that's the essence of what we're going after," Scotiabank head of international business Francisco Aristeguieta said in an interview. Since the three countries hammered out a "New NAFTA" deal in 2020, North American trade has hit $1.6 trillion in 2022 and international companies are moving production closer to customers to tackle supply chain woes. That is expected to add about 1.2% to Mexico's GDP this year. Aristeguieta, who joined the bank in May, said 14% of Scotiabank's Canadian commercial bank clients have operations in North America and has a 10% market share in Mexico, giving its clients more access to the corridor. He highlighted auto, energy and medical equipment as attractive sectors. Mexico accounts for more than a third of Scotiabank's international income. While the strategy shows promise, analysts and shareholders were not convinced as it comes with risks. "Focusing on that (Mexico) market does make sense. ... But despite those tailwinds, there's still more political, economic, and currency risks in Mexico and Latin America than in Canada or the U.S.," Veritas Investment Research analyst Nigel D'Souza said. Scotiabank's new strategy is key to reviving confidence in Canada's worst-performing big bank stock this year, which is down 6.6% versus a 5.9% rise in the financial sub-index (.SPTTFS). It trades at a forward price-to-earnings ratio of 9.6, compared with an industry average of 10.7, according to LSEG data. Aristeguieta sees 12% growth in the multinational business in Mexico and 50% of its commercial and wealth banking incremental earnings coming from Mexico by the next five years as trade finance often opens door to higher-margin businesses. Aristeguieta is paying close attention to Mexico's June 2024 election and is hoping that regardless of the outcome, the country offers a stable regulatory framework for foreign investment. Some 48 banks operate in Mexico, but just seven control 78% of the market share by total assets. Foreign banks like Citigroup have lost market share to local Mexico banks, prompting the U.S. lender to exit. But after struggling to find a buyer, Citigroup is planning an IPO of its Mexico unit. Flavio Volpe, president of Automotive Parts Manufacturers Association of Canada said Scotiabank could face competition from China, as exporters setting up factories in Mexico to preserve their sales to the United States rely on Beijing lenders. Tapping the North American trade drove Canadian Pacific Railway to buy Kansas City Southern to create the first direct railway linking Canada, the United States and Mexico in 2021 in a hotly contested deal. Volpe said Scotiabank could make it work. "It's a smart strategy for Scotiabank. Because the (manufacturers) in Mexico are the same ones that they probably have as customers here on a retail basis," he said. (This story has been refiled to fix a typographical error in paragraph 1) https://www.reuters.com/business/finance/scotiabanks-mexico-bet-eyeing-16-trillion-namerica-trade-is-riddled-with-risks-2023-12-18/

2023-12-18 17:09

Dec 18 (Reuters) - Coinbase filed a petition in a federal appeals court requesting a review of a decision by the U.S. Securities and Exchange Commission to deny the crypto exchange's request for new rules for the digital asset sector. The five-member commission, in a 3-2 vote, said Friday it would not propose new rules because it fundamentally disagreed that current regulations are "unworkable" for the crypto sphere, as Coinbase has argued. https://www.reuters.com/technology/coinbase-petitions-court-review-sec-denial-its-request-crypto-rules-2023-12-18/

2023-12-18 16:45

Dec 18 (Reuters) - Japan's Nippon Steel's (5401.T) $14.9-billion acquisition of U.S. Steel (X.N), finalized at auction on Monday, is the culmination of multiple bids by a range of suitors for the 122-year-old company, once the largest corporation in the world. Several quarters of falling revenue and profit made the Pittsburgh-based firm, which was also the first company ever to be valued at more than $1 billion, an attractive takeover target for rivals looking to add a maker of steel used by the automobile industry. Here's a timeline of recent events leading up to the deal between Japan's largest steelmaker and the company whose steel was used to build iconic structures such as the United Nations building in New York City and the New Orleans Superdome. Sources: Reuters reports, company records https://www.reuters.com/markets/deals/road-nippons-149-billion-acquisition-us-steel-2023-12-18/

2023-12-18 16:04

Egypt inflation poll data: CAIRO, Dec 18 (Reuters) - The Central Bank of Egypt (CBE) is likely to leave its overnight interest rates fixed at a policy meeting on Thursday, even though economic reforms are expected in the weeks following President Abdel Fattah al-Sisi's re-election. The National Election Authority announced on Monday that Sisi had won 89.6% of the vote for his third, six-year term in an election that saw no serious challengers. Many analysts believe Egypt will wait until January, well after the Dec. 10-12 vote, before hiking interest rates or devaluing the currency. The median forecast in a poll of 14 analysts is for the CBE to hold its deposit rate steady at 19.25% and lending rate at 20.25% when its regular monetary policy committee (MPC) meets. Six analysts expected a hike of between 100 and 300 basis points (bps). "I don't see much to gain from a hike at this point - on a sequential basis inflation is already coming down, and the weak GDP and PMI data tell you there's no need to hike rates to curb demand," said Simon Williams of HSBC. "I do see policy tightening, but only in tandem with FX adjustment and fresh support from the IMF and others." Reluctant to allow changes, the CBE has kept the Egyptian pound fixed at 30.95 to the dollar since March and last raised interest rates by 100 basis points in September. The pound has since fallen to 50 to the dollar on the black market. Some analysts, however, saw the CBE potentially moving before January. "We envisage that the pound is devalued by more than 20% to 40 to the dollar and interest rates are hiked by 300 bps, to 22.25%," said James Swanston of Capital Economics. "Even if all of this isn't delivered next week, a change in approach to macro policy will be needed soon and the MPC meeting gives an opportunity for officials to at least provide more guidance on the policy path," Swanston said. Egypt agreed in a $3 billion financial package with the International Monetary Fund (IMF) a year ago to let its currency float freely and to speed the sale of state assets. Progress on both counts has been slow, prompting the IMF to delay disbursements. But since Israel went to war in neighbouring Gaza in October, multilateral lenders appear to have softened their tone. The IMF said this month it had begun talks with Egypt on additional financing as part of its current program. https://www.reuters.com/world/middle-east/egypt-seen-keeping-interest-rates-hold-thursday-2023-12-18/