Major market indexes waffled between positive and negative territory before edging into the green Monday ahead of a full slate of quarterly earnings reports this week. The Dow Jones Industrial Average (DJINDICES:^DJI) modestly extended Friday's record high, while the S&P 500 (SNPINDEX:^GSPC) was basically flat, as gains in technology and consumer staples helped to largely offset declines from the energy and financial sectors.
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As for individual stocks, Symantec (NASDAQ:NLOK) plunged after a potential suitor reportedly walked away from takeover talks, while Gilead Sciences (NASDAQ:GILD) and Galapagos (NASDAQ:GLPG) jumped on news of a significant new pharmaceutical collaboration.
Symantec gets rejected by Broadcom
Shares of Symantec dropped 10.7% after anonymous sources told CNBC the cybersecurity software leader has ended takeover negotiations with Broadcom (NASDAQ:AVGO). Today's decline essentially brings Symantec close to where it traded at the start of this month, when rumors of an "imminent" deal sent the stock soaring. Broadcom climbed 1% on the news.
Indeed, CNBC's sources elaborated Broadcom was initially ready to pay as much as $28.25 per share for Symantec -- a hefty 25% premium from its current trading price -- but ultimately reduced its proposed price to below $28 after performing further due diligence.
That's not to say acquisition talks couldn't resume in the future. But after coupling this failed takeover effort with Symantec's recent executive turnover and uninspiring growth, it's hardly surprising the stock pulled back today.
Gilead's new $5.1 billion bet
Shares of Galapagos skyrocketed 17.2% after Gilead Sciences revealed yesterday that the two pharmaceutical leaders have entered into an expanded long-term global research and development collaboration. Gilead stock rose 2.7%.
Per the terms of the agreement, Galapagos will receive a $3.95 billion up-front payment and a $1.1 billion equity investment from Gilead at a price of 140.59 euros ($158.43) per share -- a roughly 10% premium from Friday's close. The proceeds will be used to expand and accelerate Galapagos' R&D programs.
The move increases Gilead's stake in the Belgian-Dutch company to approximately 22% from 12.3%, though Galapagos says it will seek shareholder approval to issue warrants allowing Gilead the option of increasing its ownership to up to 29.9% of its total issued and outstanding shares. Meanwhile, Gilead agreed to a 10-year standstill limiting its ability to try to acquire Galapagos or increase its stake beyond 29.9%.
Gilead, for its part, will receive an exclusive product license and option rights to develop and commercialize all current and future programs outside of Europe.
"We are excited to enter into this unique agreement, which will generate both long-term strategic value and mutual, immediate benefits," stated Gilead Chairman and CEO Daniel O'Day. "We chose to partner with Galapagos because of its pioneering target and drug discovery platform, proven scientific capabilities and outstanding team."