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Kohl’s Falls on Report That Sales Process Likely Won’t Lead to Deal

Mark Young

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Kohl’s Corp. (NYSE:KSS) dropped 1.6% in after hours trading after a report that the department store chain’s Q1 results may dissuade potential suitors from making offers.

One source familiar with sales process told the NY Post that they were “shocked” by Kohl’s results and the person didn’t believe any acceptable bids would be offered to the retailer. A lending source at an unidentified bank also told the paper that banks are not lining up to finance a huge acquisition in the current market environment.

The NY Post item comes after Women’s Wear Daily earlier on Thursday reported that Kohl’s (KSS) may be leaning toward remaining independent. Kohl’s Chairman Peter Boneparth is said to be against selling the department store chain, according to the report, which cited a source familiar.

The reports come after Kohl’s earlier Thursday said it expects “fully-financed final bids to be submitted in the coming weeks.” The activist pushing for the company to sell itself was dealt a blow last week when Kohl’s holders rejected all of Macellum’s 10 board nominees.

Late Wednesday Kohl’s (KSS) announced that its chief marketing officer and chief merchandising officer were set to soon depart.

The NY Post reported late last month that Kohl’s received an offer from Simon Property (SPG) and Brookfield Asset Management (BAM) for $68/share.

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Original Article: seekingalpha.com

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Activision Blizzard Board Denies Claims of Harassment Culture

Mark Young

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The board at Activision Blizzard (NASDAQ:ATVI) pushed back Thursday against the drumbeat of media stories about accusations of harassment in company culture.

In a long letter it included in an SEC filing, the board said that it had promised to dig into issues directly, and “What we have come to realize over the past several months is that there are many truths about our company – individual and collective, experiential and data-driven – and sometimes they can be difficult to reconcile.”

Media criticism of the board and senior executives as insensitive to workplace matters, though is “without merit. Activision Blizzard senior executives responded in a timely manner and with integrity and resolve to improve the workplace.”

“Contrary to many of the allegations, the Board and its external advisors have determined that there is no evidence to suggest that Activision Blizzard senior executives ever intentionally ignored or attempted to downplay the instances of gender harassment that occurred and were reported,” the letter read.

While it notes “a single instance of someone feeling diminished at Activision Blizzard is one too many,” the board says there isn’t a systemic problem with harassment, discrimination or retaliation at the company, and that “based on the volume of reports, the amount of misconduct reflected is comparatively low for a company the size of Activision Blizzard.”

Their work also hasn’t unearthed any evidence suggesting any attempt by a senior executive or employee to conceal information from the board, it said.

Notably, that’s pushback on November reports that CEO Bobby Kotick knew for years about sexual-misconduct allegations and that he kept some reports from the board.

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Original Source: seekingalpha.com

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FTC Votes Unanimously to Increase Scrutiny Over Pharmacy Agent Fees

Mark Young

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The Federal Trade Commission (FTC) voted unanimously to adopt a policy statement on Thursday stating its intention to more closely examine the rebates and fees paid by drug manufacturers to Pharmacy Benefit Managers (PBMs) to get preferred coverage for their drugs from payers.

The five-member commission, including two Republican commissioners, voted 5-0 to increase the scrutiny of the practice to assess its impact on payers and patients.

“These rebate and fee agreements may incentivize PBMs and other intermediaries to steer patients to higher-cost drugs over less expensive alternatives,” the FTC wrote.

Acting as middlemen between drugmakers and consumers, PBMs decide which drugs get covered by health insurance plans and negotiate prices with manufacturers.

Leading PBMs include the Caremark unit of CVS Health Corporation (NYSE:CVS), Express Scripts of Cigna (CI), and OptumRx of UnitedHealth Group (UNH).

The commission has paid particular attention to insulin to highlight the impact of the arrangement. Citing research, FTC points out that the wholesale price of the lifesaving medication has nearly tripled between 2009 and 2017, raising out-of-pocket costs for both insured and uninsured patients.

Notable insulin manufacturers include Eli Lilly (LLY), Sanofi (SNY), and Novo Nordisk (NVO).

Last week, the FTC said it would launch an investigation into how vertically integrated pharmacy benefit managers affect the price and availability of prescription drugs.

Under the probe, companies including CVS Health (CVS), Cigna (CI) and UnitedHealth (UNH), and Humana (HUM) were expected to receive subpoenas for information.

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Original Post: seekingalpha.com

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Frontier Sweetens Spirit Airways Deal to Include Reverse Termination Fee

Mark Young

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Frontier (NASDAQ:ULCC) enhanced its agreement with Spirit Airlines (NYSE:SAVE) to include a reverse termination fee after a prominent proxy adviser recommended Spirit holders vote against the deal.

Frontier (ULCC) would pay a reverse termination fee of $250 million, or $2.23 per share, to Spirit (SAVE) if the combination is not consummated for antitrust reasons, according to a statement.

JetBlue (NASDAQ:JBLU) and Frontier (ULCC) have been waging a battle for Spirit (SAVE) over the last few months after Frontier originally agreed to a acquire the ultra-low-cost carrier. Frontier has repeatedly rejected the Jetblue offers arguing that the deal would never get passed U.S. antitrust regulators.

Proxy firm ISS argued in its recommendation on Tuesday that the Spirit/Frontier deal should be rejected as it lacked a reverse termination fee. Jetblue’s (JBLU) offer for Spirit (SAVE) includes a $200 million reverse termination fee.

ISS wrote that Spirit (SAVE) board’s view that a Frontier (ULCC) deal has a safer route toward regulatory approval isn’t supported by “any guarantee of value” for holders if the deal is rejected by regulators.

“The combination of a higher reverse termination fee and a much greater likelihood to close in a Frontier merger provides substantially more regulatory protection for Spirit stockholders than the transaction proposed by JetBlue,” said Mac Gardner, chairman of the Spirt board, said in the statement.

Last week, Spirit Airlines CEO called JetBlue offer “cynical” in scathing rebuke of unsolicited bid.

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Original Source: seekingalpha.com

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