Brookfield in talks to acquire Optus from Singtel

Good morning. Here's what happened overnight and what you need to know today.

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1.

Singtel sling: Brookfield is reportedly in advanced talks to by Optus from Singapore's largest carrier, Singtel. Citing unnamed sources, the Australian Financial Review reports that the deal is expected to value Optus at between $16 billion and $18 billion. Shares in Singapore Telecommunications climbed over 4% on Wednesday, its biggest gains in almost two years, before the Singapore Stock Exchange halted trading. Brookfield could bring a consortium partner such as the Canada Pension Plan Investment Board into the deal, according to the AFR. Singtel responded to the media coverage via a statement to the bourse which says: “There is no impending deal to offload Optus for the said sum, as reported. Optus remains an integral and strategic part of the Singtel Group and we are committed to Australia for the long term.”(Singtel statement)(Australian Financial Review)

2.

Last dance: The US House of Representatives has voted in favour of a bill to ban app stores from distributing social media app, TikTok, if its Chinese owner, ByteDance, does not divest ownership. Republicans and Democrats voted 352 to 65 to back the bill, which was carried out under fast-track rules that require support by two-thirds of the House members in order to pass. 15 Republicans and 50 Democrats voted in opposition. The vote was supported by President Joe Biden and opposed by Donald Trump. While the House has passed the bill, it is unclear how the legislation will proceed once it reaches the US Senate. A TikTok spokesperson blasted Wednesday’s decision: “This process was secret and the bill was jammed through for one reason: it's a ban.” (CNN)

3.

Terse telegram: Activist hedge fund, Tribeca Investment Partners, has called on Glencore to move its primary listing from London to Sydney and scrap its plans to spin off its flagship coal business. According to a letter seen by the Financial Times, the fund wrote to Glencore’s board this week with a list of proposals to boost the company’s share price, which has been languishing since its public offering in 2011. Tribeca also recommended Glencore increase dividends by ending share buybacks and shedding a minority stake in its trading division through an IPO. “London is no longer the home of mining,” said Ben Cleary, portfolio manager of Tribeca Global Natural Resources in the letter. “The LSE has a comparatively low appetite for mining investment and is no longer suitable as the company’s primary bourse.” (Financial Times)

4.

Slippery business: US President Joe Biden will issue a statement about Nippon Steel’s planned acquisition of US Steel, ahead of a state visit by Japan’s Prime Minster Fumio Kishida in April. Nippon Steel announced its plans to purchase US Steel for USD14.9 billion($22.26 billion) in late December, in a move that would give the Japanese giant access to the US steel market. According to sources cited by the Financial Times, the draft statement which has been shared with the Japanese government, could jeopardise the progress of the deal and create friction between the allied nations. The deal, which has ignited bipartisan backlash in Washington, could bear an impact on Biden’s campaigning in the swing state of Pennsylvania, where US Steel and the United Steelworkers Union (which opposes the takeover) are headquartered. Trump has previously criticised the proposed merger. (Financial Times)(United Steelworkers Union)

5.

Russian oil: Ukraine’s state security service, the SBU, launched a series of drone strikes on oil refineries deep within Russian territory on Wednesday morning. The oil facilities targeted by Ukraine over the past two days account for around 12% of Russia’s oil-processing capacity. Ukrainian officials told the Financial Times that the SBU attacked three refineries, one of which set the Ryazan plant ablaze, halting work at one of the country’s largest crude-processing facilities. The wave of attacks by Ukraine started on Tuesday, hitting a unit of Lukoil PJSC’s Norsi refinery, and an oil depot in the Oryol region, and aims to disrupt Russia’s exports and fuel supplies to its army on the front lines. In an interview with RIA Novosti news service on Wednesday, President Putin said that the strikes’ “main goal, I have no doubt about it, is to — if not to disrupt the presidential elections in Russia.” (Financial Times)(Bloomberg)

6.

UK rebound: The UK economy rebounded in January following a slip into recession in the second half of 2023. Gross domestic product in the country rose 0.2% in January, following a 0.1% decline the month prior. The estimates released by the Office for National Statistics showed services output grew by 0.2% as the largest contributor to the GDP rise for January, while production output fell by 0.2% in the same period. While growth is on course to pick up in Q1 this year, the Bank of England remains unlikely to ease policy until it receives consistent confirmation that inflation is also nearing its 2% target. On Wednesday, governor of the European Central Bank reaffirmed Europe’s plans to begin cutting rates from June. (Office for National Statistics)(Bloomberg)

7.

High volumes: Payments giant Stripe passed USD1 trillion in payment volume and returned to being cash flow positive during 2023. The fintech told investors on Wednesday that payments processed during 2023 were up 25% on 2022’s volumes, and saw its valuation increase to USD65 billion in February from USD50 billion last year. In an interview with the Financial Times, CEO and co-founder John Collison said the firm is “not in a rush” to IPO, and that “businesses which are profitable have many, many more options than businesses which are dependent on outside capital.” Stripe expects its revenue-automation business which is used by the likes of Figma, OpenAI, Atlassian, and Nasdaq, to see an annual revenue run rate over USD500 million in the next year. (Stripe annual letter)(Financial Times)

8.

Weight loss on demand: Eli Lilly & Co has partnered with Amazon to expand its weight-loss drug sales directly to patients. The agreement will see the world’s largest drugmaker by market value allow Amazon’s online pharmacy business dispense its popular weight-loss injection pen, Zepbound and other drugs through the direct to consumer network. The home delivery service will be available for patients using Eli Lilly’s digital health platform, LillyDirect, which gives users access to third-party telehealth consultations. The move into prescriptions and drug delivery will pit Eli Lilly against pharmacy giants Walgreens and CVS. (Reuters)