AstraZeneca buying Gracell Biotechnologies, HgCapital selling stake in IRIS

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The FTSE 100 is expected to open 44 points higher on Wednesday, having closed up 0.04% on Christmas Eve at 7,697.51.

Stocks to watch

AstraZeneca on Wednesday said it was buying Gracell Biotechnologies, a global clinical-stage biopharmaceutical company developing cell therapies for the treatment of cancer and autoimmune diseases, for $1.2bn. Under the terms of the deal, AstraZeneca will acquire all of Gracell’s shares at $2 per share in cash, plus a non-tradable contingent value right of $0.30 per ordinary share payable upon achievement of a specified regulatory milestone. The upfront cash portion represents a 62% premium to Gracell’s closing market price on 22 December.

HgCapital Trust said on Wednesday that its manager Hg has agreed to a partial sale of its investment in IRIS Software Group to LGP, a Los Angeles-based private equity firm. The transaction's financial terms were not disclosed, but valued HgCapital Trust's investment in IRIS at around £99.8m, with a net distribution of approximately £42.1m to the trust. Following the sale, its exposure to IRIS would be £57.7m, representing 2.5% of its net asset value as of 30 September, with HgCapital Trusts’s available liquid resources estimated at £705m.

Newspaper round-up

The Conservatives will promise to cut the up-front cost of a home for first-time buyers as a pre-election giveaway to win over younger voters. In what is expected to be a central element of the party’s campaign, Michael Gove told The Times that it would “definitely” have a new offer in place before polling day. - The Times

Downing Street is considering axing inheritance tax in three months’ time in a pre-election giveaway to boost Rishi Sunak’s chances of victory. The move is one of a handful of major tax cuts that have been discussed by senior figures in Number 10. - Telegraph

Sir Jim Ratcliffe is expected to ask an external auditor to assess Manchester United’s structure and expenditure with a view to a major streamlining exercise, meaning as many as 300 jobs are potentially under threat. Ineos executives have been in discussions with United over the past weeks regarding Ratcliffe’s plans before his purchase of 25% of the club becoming official on Christmas Eve, with the club’s management already having been reminded to curb rising costs to ensure maximum funds for transfers within the strictures of financial fair play. - Guardian

Anglo American is gearing up to sell a minority stake in Britain’s biggest mining project as it seeks to share the cost of the $9 billion development in North Yorkshire. Duncan Wanblad, chief executive of the FTSE 100 miner, told City analysts that it was moving “at pace to find a partner” for the Woodsmith fertiliser mine. - The Times

Retailers have recorded a small pickup in Boxing Day footfall, but visits to stores remained well below pre-pandemic levels as several high street chains stayed shut. Retailers have been braced for weak spending over the Christmas period as the UK economy stagnates amid the cost of living crisis. - Guardian

US close

Wall Street stocks closed higher on Tuesday as traders returned from the Christmas break in a jolly mood.

At the close, the Dow Jones Industrial Average was up 0.43% at 37,545.33, while the S&P 500 advanced 0.42% to 4,774.75 and the Nasdaq Composite saw out the session 0.54% firmer at 15,074.57.

The Dow closed 159.36 points higher on Tuesday, extending gains recorded on Friday as market participants cheered a recent surprise reading of the Federal Reserve's favourite inflation gauge. Markets were closed for Christmas Day celebrations on Monday.

As for Tuesday, stocks started the final week of 2023 with some early gains, with Intel picking up roughly 3% as a result of the Israeli government awarding the chipmaker a $3.2bn grant for the erection of a $25.0bn plant - the largest ever investment by a company in Israel.

With Israel in mind, residents of the occupied West Bank woke up to an attack on Jenin on Christmas day, commonly viewed as a symbol of Palestinian resistance.