State Dept veteran arrested over cash, gifts from China

The Justice Department announces the arrest of a veteran State Department employee for failing to disclose contacts with Chinese intelligence operatives who allegedly provided her family with gifts.

FDA Approves New Drug For Severe Multiple Sclerosis

The Food and Drug Administration on Tuesday approved the first treatment for primary progressive multiple sclerosis (PPMS), a severe form of the neurological condition that had no approved treatment until now.

This sort of opens the door for us,” Dr. Fred Lublin, an investigator for the clinical trials and director of the Corinne Goldsmith Dickinson Center for Multiple Sclerosis at Mount Sinai Hospital, told The New York Times. “Once we open that door, then we do better and better and better. It’s a very encouraging result.”

Clinical trials found a 24 percent lower risk of disability progression in participants with PPMS who took the new drug, compared with those who received a placebo. 

The list price for ocrelizumab, which will be sold under the brand name Ocrevus by Genentech, is $65,000 per year. (Genentech is part of the Swiss pharmaceutical company Roche.) The drug is also approved for relapsing-remitting multiple sclerosis, the most common form of the disease. It’s expected to be on the market within two weeks.

More than 400,000 people in the United States and 2.3 million people worldwide have MS, according to the Multiple Sclerosis Foundation. About 10 percent of patients are diagnosed with PPMS at the onset of their disease. PPMS is progressive and not marked by relapses or remissions. 

Although women are twice as likely to have MS as men, the rate of people with PPMS is equal among men and women, with onset usually occurring from ages 35 to 39.

“The FDA’s approval of Ocrevus is the beginning of a new era for the MS community and represents a significant scientific advance,” Sandra Horning, Roche’s chief medical officer, told Reuters.

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Republicans try to move past bitterness to tackle U.S. tax reform

WASHINGTON (Reuters) – Raw feelings and mistrust could pose an obstacle to President Donald Trump and hard-line conservative lawmakers in his Republican Party as they seek to rebound from defeat on healthcare legislation by launching into an overhaul of the U.S. tax code.

If a bidder wants to go hostile, the new takeover rules are not an inhibiting factor

The country’s new takeover bid regime is less than one year old.

The rules — which include a 50 per cent minimum tender requirement, a 10-day extension following satisfaction of all conditions and a minimum 105-day tender period — were meant to provide enough time to complete a takeover and to prevent target companies from using shareholder rights plans as a defence.

Under the new regime, whose rules were promulgated in early 2016 and became effective in May, there would be no more scurrying off to the regulator for a poison pill hearing: instead the parties would have to work matters out under a set of rules that were uniform across the country.

And we now know, thanks to two successful hostile deals this month, including one this week, that the rules are not so restrictive as to prevent hostile takeovers. That possibility was a concern when the rules came into effect, in part because bidders needed to secure a financing commitment for a longer period than had been the case in the past.

In general, it was felt lenders would want to limit their commitment period, because the longer period would expose them to interest rate risk and market uncertainty, all of which would make it more expensive for the bidder.

And if the transaction was hostile, from start to finish — as was Total’s plan to acquire Savanna Energy Services — then the lenders’ commitment would need to be longer than 105 days. According to a report from Oslers, the rules for a hostile bidder mean that it can’t take-up shares until at least 105 days after the launch and a “bidder is required to affect a second take-up no earlier than 115 days after the launch.”

Total announced its intention to make an all-paper offer last November and an offer came in mid-December. This week, Total, which beat out a friendly negotiated transaction between Savanna and Western Energy Services, announced it had received the support of 51 per cent of Savanna’s shareholders it has extended the offer to April 7.

While the financing tension between bidder and lender wasn’t concern with Total/Savanna, the bidder had some hurdles to clear: it called a shareholders meeting seeking approval to issue shares in the event it was successful in its pursuit of Savanna.

Daniel Halyk, Total’s chief executive said, “the new takeover bid rules are certainly not favourable to bidders generally. They are definitely pro-target but ultimately it’s a shareholder’s decision. The lesson we all can learn is, ‘Listen to your shareholders.’”

But such concerns were alive and well with Chemtrade Logistics Income Fund’s planned acquisition of Canexus Corp., a transaction that closed this month. That transaction started off hostile last October but became friendly and negotiated — with a higher offer — in December.

Rohit Bhardwaj, Chemtrade’s chief financial officer, said the new takeover rules, “were a consideration,” in the company’s plans to go hostile. But what gave Chemtrade “some comfort” was that Canexus had conducted a strategic review that resulted in a deal in with Superior Plus. The U.S. regulator nixed that deal.

“Once Superior was out of the running we felt we were a logical buyer and were willing to take the risk. (But) going hostile was not our first preference,” he said, adding a hostile bid was more expensive because the necessary financing “was tied up for a longer period of time. The extra costs in the grand scheme were material but not that significant,” he said, noting Chemtrade was required to line up extra fire-power to allow a change of control offer to be made for debentures and high yield notes issued by Canexus.

Financial Post
bcritchley@postmedia.com

U.S. judge to consider objection to Trump University settlement

NEW YORK (Reuters) – A U.S. judge will hear arguments on Thursday over whether to grant final approval to a $25 million settlement of fraud lawsuits against President Donald Trump over his Trump University real estate investment seminars, with at least one former student objecting to the deal.