HIGHER: Altisource (ASPS), up 18% after entering a cooperative brokerage agreement with New Residential (NRZ)... Gilead Sciences (GILD) is up 1% and Kite Pharma (KITE) is up 29% after the companies announced that Gilead will acquire Kite for $180 per share in cash. UP AFTER GILEAD/KITE ANNOUNCEMENT: bluebird bio (BLUE), up 8.3%... Juno Therapeutics (JUNO), up 18.8%... Cellectis SA (CLLS), up 10.2%. LOWER: China Cord Blood (CO), down 1.2% after it announced the adoption of a 10b5-1 sales plan... Merit Medical Systems (MMSI), down 1.2% after being downgraded to Outperform from Strong Buy at Raymond James... Kimco Realty (KIM), down 1.3% after being downgraded to Hold from Buy at Argus.
China Cord Blood announced that Magnum Opus Second Limited, an entity holding ordinary shares on behalf of certain directors and members of senior management, has adopted a 10b5-1 sales plan to sell up to 2,275,700 ordinary shares from time to time in ordinary brokerage transactions, primarily to meet the individuals' personal needs. Under the company's corporate trading policies, a 10b5-1 sales plan is recommended for directors and members of senior management in order to comply with insider trading principles and reduce the possibility of opportunistic selling by management. In accordance with such sales plan, the trustee intends to sell up to an aggregate of 2,275,700 ordinary shares over time, representing approximately 1.9% of the company's total outstanding shares as of August 2017. Rule 10b5-1 allows corporate insiders to establish prearranged written plans to buy or sell a specified number of shares of company stock over a predetermined period of time. Insiders may adopt such plans when they are not in possession of material inside information in order to gradually change their investment portfolio to minimize the market effects of significant stock sales or purchases by spreading them out over an extended period of time and to avoid concerns about initiating stock transactions while in possession of material nonpublic information. Any sales by the company's insiders may also be made in privately negotiated transactions, in block trades or other legally permissible ways from time to time depending on market conditions and in accordance with applicable rules and regulations.
Shares were last up over 14.8% to $14.34. At that price there is no established resistance suggesting a test into the $14.50-$15 area may be next. Support is also not established, with the nearest support at the old high of $13.22.
Jayhawk Capital, in an open letter sent to China Cord Blood's (CO) board, said: "We recommend the Board repurchase 30 million shares as an effective use of the excess cash on the balance sheet that benefits all shareholders. Shareholders who would like to sell may do so of their own free will, while other shareholders like Jayhawk can hold their shares to participate in the future growth of the company. This will increase the ownership of the remaining minority shareholders as well as the soon-to-be new majority shareholder, Nanjing Ying Peng Hui Kang Medical Industry Investment Partnership. NYPHK is an affiliate of the Sanpower Group, which recently completed the $820M acquisition of Dendreon Pharmaceuticals LLC, the maker of a stem cell treatment for prostate cancer, from Valeant Pharmaceuticals International (VRX)... Assuming the Board authorizes the share repurchase, and completes 30 million shares at an average price of $15 per share, the company will still have over $100M of cash on their balance sheet, plus generating $25M of cash each quarter. The reduction in share count would increase our average valuation of $59 per share to $74 per share, resulting in an increased value to the shareholders of the remaining 90.6 million shares of $1.4B! We sincerely hope the Board immediately initiates this repurchase plan. If the Board delays too long, the stock price could be above $20, which would greatly reduce the potential benefit to remaining shareholders."
China Cord Blood, in response to the non-binding proposal letter dated April 27 received by the company's board from Golden Meditech Holdings, relating to the acquisition of all of the outstanding ordinary shares of the Company not already owned by Golden Meditech in a "going private" transaction, has adopted the recommendation of the special committee of independent directors formed to evaluate such proposal to terminate any further evaluation and negotiation regarding such proposal. In its recommendation, the special committee had taken into account various factors including but not limited to the pending transaction between Golden Meditech and Nanjing Ying Peng Hui Kang Medical Industry, the purchaser's future plans regarding CCBC after the acquisition is completed and the overall viability of the proposal. The special committee's recommendation was unanimous and the adoption of its recommendation by the full board was unanimous, with Chairman Kam Yuen abstaining.