MORNING NEWS CALL

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U.S. Edition Mo~. Mey 15, 2023

TOP NEWS
• In critical week, Biden, Republicans search for outline of debt-limit deal
President Joe Biden and congressional Republicans enter a critical week for debt-ceiling talks hoping they can find
common ground on spending levels and energy regulations to avert a devastating default.

• In the Market: Why US regional banks are doomed to a doom loop

Banking regulators have been pushed by market volatility in recent weeks into doing things that they haven't really
wanted to do, like letting the largest U.S. bank get even bigger. Their hand may be forced again.

• Macron courts Tesla's Musk and other investors to 'Choose France'

France is poised to win record foreign investment pledges when President Emmanuel Macron receives global
business leaders, including Tesla's Elon Musk, at the annual Choose France summit in Versailles.

• G7 leaders to target Russian energy, trade in new sanctions steps -sources

Leaders of the Group of Seven (G7) nations plan to tighten sanctions on Russia at their summit in Japan this
week, with steps aimed at energy and exports aiding Moscow's war effort, said officials with direct knowledge of
the discussions.

• US pipeline operator ONEOK moves into oil, products with $18.8 bln Magellan deal
ONEOK agreed on Sunday to buy U.S. pipeline operator Magellan Midstream Partners in a cash-and-stock deal
valued at about $18.8 billion including debt, bringing natural gas-focused ONEOK into transporting refined
products and oil.

BEFORE THE BELL

Ahead of a busy week for Federal Reserve officials, U.S. stock index futures rose on optimism that lawmakers
will reach an agreement to raise the debt limit to avoid a catastrophic default. Both European and Japanese
shares were higher, with the Nikkei notching its highest close in 1-1/2 years. Oil prices were slightly higher as
bullish sentiment about tightening supplies from OPEC+ cuts and a resumption in U.S. buying for reserves. Gold
regained its footing after three straight sessions of losses as the dollar eased.

STOCKS TO WATCH
Results
• Mitsubishi UFJ Financial Group Inc: Japan's top three banks said they expect solid lending income at home
and abroad to boost net profits this business year, with the biggest Japanese lender forecasting a record annual
profit. MUFG forecast a 16% increase in net profit to 1.3 trillion yen for the year ending in March 2024, exceeding a
previous record set two years ago and beating the 1.18 trillion yen average of 14 analysts' estimates compiled.

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"Our main scenario for Japan is that solid consumer consumption and inbound tourism will continue to support a
mild economic recovery," said MUFG Chief Executive Officer Hironori Kamezawa.

Deals Of The Day

• Magellan Midstream Partners LP & ONEOK Inc: ONEOK agreed on Sunday to buy U.S. pipeline operator
Magellan Midstream Partners in a cash-and-stock deal valued at about $18.8 billion including debt, bringing
natural gas-focused ONEOK into transporting refined products and oil. ONEOK will pay $25 and 0.6670 shares of
ONEOK common stock for each outstanding Magellan common unit, representing a premium of 22% based on
Magellan shares' closing price on May 12. The buyer will also assume Magellan's $5 billion debt pile. The deal will
give ONEOK, until now a transporter of natural gas liquids and natural gas, access to Magellan's refined products
and crude oil transportation business. The combined company will have 44% of its business in NGLs, and 21% in
refined products, according to a presentation.

In Other News
• Alphabet Inc: Brazil's Supreme Court on Friday ordered an investigation into executives at social messaging
service Telegram and Alphabet's Google who are in charge of a campaign criticizing a proposed internet
regulation bill. The decision by Justice Alexandre de Moraes to open an investigation, based on a request by
Lower House Speaker Arthur Lira, came after tech firms campaigned against the bill on their platforms. Justice
Moraes gave the federal police 60 days to carry out their probe and ordered authorities to identify and take
testimony from all those responsible at the companies for the "abusive campaign" against the bill.

• Amazon.com Inc: The e-commerce giant said it has optimized its delivery network coming out of the COVID-19
pandemic, allowing it to increase delivery speeds and lower costs, while also reducing the ecommerce giant's
carbon emissions. The online retailer on Saturday said it has reduced delivery times, reshaped its inventory
management system as well as search capabilities to show customers items closest to them, leading to products
reaching 12% less touchpoints before being delivered. At a time of slack consumer demand, Amazon and other
online retailers have also been making efforts to slash costs for home delivery and returns.

• Analog Devices Inc: The company said it will invest 630 million euros in a new research and development and
manufacturing plant in Ireland, as the U.S. chipmaker looks to boost its production capacity in Europe. The
company expects to triple its European wafer production capacity and create 600 jobs at the new 45,000 square
foot facility in the city of Limerick. The Wilmington, Massachusetts-based firm makes chips that are used for
industrial robots, 5G telecommunications equipment and automobiles. It has been located in Limerick, its
European headquarters, since the mid-1970s.

• Apollo Global Management Inc: Shares in John Wood Group were on track for their biggest one-day drop on
record after U.S.-based Apollo Global Management said it would not proceed with a takeover of the British
engineering services firm on its fifth attempt. Shares were changing hands at around, after private equity firm
Apollo said ahead of the market open it would not go ahead with an offer following an exploratory bid last month.
Apollo had until later this week to either submit a formal offer or walk away from talks following last month's bid at
240 pence per share, which valued the company at about 1.66 billion pounds.

• Athenex Inc: The drugmaker and certain of its subsidiaries voluntarily filed for Chapter 11 proceedings, the
company said on Sunday. Athenex reached an agreement with its lenders to move forward with an expedited sale
process of its assets, the company said in a statement. The Buffalo, New York-based company has listed
estimated assets and liabilities in the range of $100 million-$500 million, according to a filing with the U.S.
Bankruptcy Court for the Southern District of Texas. The company said it has sufficient resources to support
Athenex Pharma Solutions operations, and fulfill APD customer orders during the sale process.

• BlackRock Inc: The company's Chief Executive Officer Larry Fink has been preparing five key leaders to take
his role whenever he decides to step down in the future, the Wall Street Journal reported on Saturday. Though
Fink has no imminent plans to retire, he along with President Robert Kapito has been training these candidates for
"The Great Race" - to choose the successor - in what Fink calls is the "No. 1 priority", the report said, citing an
interview with the CEO. Fink did not give a definite timing as to when he would retire but said he "would prefer to
not be at BlackRock in his late 70s", the report said, adding there was a chance he could stay on as chairman after
stepping down as CEO.

• Biogen Inc: Wide coverage of Alzheimer's drug Leqembi would raise future costs for the U.S. Medicare health
plan by $2 billion to $5 billion a year, according to a study led by researchers at the University of California, Los
Angeles (UCLA). Leqembi, sold by partners Eisai and Biogen at an annual list price of $26,500, was approved this
year under the U.S. Food and Drug Administration's accelerated pathway. Trial results later showed it slowed the
rate of cognitive decline by 27% compared with a placebo in patients with early disease. Eisai and Biogen have

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estimated Leqembi would be used to treat around 100,000 U.S. patients in its first three years on the market.

• EQT Corp: Sweden-based EQT said it is launching a new strategy for private wealth clients to broaden its
investor base and offer individuals the chance to invest. EQT Nexus will be the private equity firm's first offering for
individual investors to make single investments. The Nexus portfolio will invest in mature buyouts to early-stage
investing, focusing on EQT's private equity and infrastructure funds. It will also co-invest in firms alongside the
Swedish sponsor's funds.

• Ford Motor Co: The automaker said it was working to reduce costs in China as it strives to recover from a long
sales slump in the world's largest auto market. “Our costs are not competitive, and we are working internally and
with our partners to reduce costs in all areas,” a representative of Ford China told Reuters in a statement. Ford will
also restructure its China operations to turn one of its joint ventures into an export hub for low-cost commercial
electric and combustion vehicles, chief executive Jim Farley said in April.

• General Motors Co & Stellantis NV: The National Highway Traffic Safety Administration (NHTSA) demanded
the recall of 67 million air bag inflators because it believes there is a safety defect, but auto supplier ARC
Automotive Inc rejected the U.S. regulator's request, documents released on Friday show. GM on Friday agreed to
recall nearly 1 million vehicles with ARC air bag inflators after a rupture in March resulted in facial injuries to a
driver. Separately, Stellantis and South Korea's LG Energy Solution (LGES) are implementing "contingency plans"
related to a more-than C$5 billion battery plant investment in Canada because the federal government has not
delivered on its promises, a Stellantis spokesperson said on Friday.

• Illumina Inc: Proxy advisory firm Institutional Shareholder Services (ISS) on Friday backed only one of Carl
Icahn's three nominees to Illumina's board, saying that the activist investor's push to remove the company's CEO
was too disruptive. ISS backed Icahn's candidate Andrew Teno and said he could be an adequate replacement for
Illumina Chairman John Thompson, but did not support any other Icahn nominee. The partial backing by ISS
comes just two days after another proxy adviser, Glass Lewis, backed Teno and another Icahn nominee, and said
shareholders should vote against the re-election of current CEO Francis deSouza and Chairman Thompson.

• JPMorgan Chase & Co: The bank on Friday asked a federal judge to deny class-action status to more than 100
women who said the bank helped enable the late financier Jeffrey Epstein to sexually abuse them. In a filing in
Manhattan federal court, the largest U.S. bank said Epstein's accusers had too many differences to sue under an
"oversimplified" theory that it was liable to all of them by having provided Epstein with banking services. The
question "is not whether Epstein's behavior was monstrous. It was," JPMorgan said. "The question before the
court is whether to certify a class in this lawsuit. It should not."

• KKR & Co Inc: The company-backed Envision Healthcare and its wholly owned subsidiaries filed for Chapter 11
bankruptcy protection. The U.S. provider of physicians has estimated assets and liabilities in the range of $1 billion
to $10 billion each, the company said in a court filing. The company said that it entered into a restructuring support
agreement for debt obligations of about $7.7 billion under which its unit AMSURG which manages ambulatory
surgery centers and Envision Physician Services will be separately owned. All of the company's debt, with the
exception of a revolving credit facility , will be cancelled, deleveraging about $5.6 billion, it added.

• Luminar Technologies Inc: The company's CEO Austin Russell will buy a majority stake in Forbes Global
Media Holdings in a deal that values the business news publisher at nearly $800 million, Russell and Integrated
Whale Media Investments (IWM) said in a statement on Friday. The automotive tech billionaire has agreed to
acquire 82% of Forbes, which includes the remaining portion of the company owned by the Forbes family, the joint
statement to Reuters said. As part of the deal, which was first reported by Wall street Journal, Forbes' Hong Kong-
based parent IWM will retain a minority stake in the company and also keep one board seat. Forbes will also add a
new board to the company consisting of American media, tech, and AI experts, the statement added.

• NeoGames SA: Australia's Aristocrat Leisure said it will acquire Israel-based online gaming solutions provider
NeoGames for about $1 billion, leading the target's shares higher in premarket trading. Aristocrat will pay $29.50
per share to shareholders of the Nasdaq-listed firm for 100% of its shares, representing a premium of about 130%
to NeoGames' last close of $12.84. The takeover will give Sydney-based Aristocrat entry into the attractive but
highly regulated iLottery market, and facilitate further penetration across other online real-money gaming (RMG)
verticals, it said in a statement. NeoGames provides content and technology solutions for the online RMG industry.
Its group of companies include sports betting solution provider BtoBet and content provider Pariplay.

• Newmont Corp: Australian gold miner Newcrest Mining said it would back Newmont's $17.8 billion takeover offer
in one of the world's largest buyouts so far this year. The deal, subject to approval from shareholders of both
companies and other regulatory hurdles, would lift Newmont's gold output to nearly double its nearest rival, Barrick

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Gold, and catapult the miner past Freeport McMoRan to become the largest U.S. gold and copper producer by
market capitalisation. Newmont is also allowing Newcrest to pay a franked special dividend of up to $1.10 per
share on the implementation of the deal that returns tax credits to Australian shareholders.

• Norfolk Southern Corp: A Norfolk Southern freight train that derailed near New Castle, Pennsylvania, on
Wednesday night received an alarm several miles before the incident, according to preliminary findings released
Friday by the National Transportation Safety Board (NTSB). The derailment of nine train cars was about 20 miles
(32 km)from the site of a Feb. 3 incident in East Palestine, Ohio, in which Norfolk Southern-operated train cars
carrying toxic vinyl chloride and other hazardous chemicals spilled and caught fire.

• Sarepta Therapeutics Inc: Advisers to the U.S. Food and Drug Administration on Friday narrowly recommended
that the agency grant accelerated approval to Sarepta Therapeutics's first-of-its-kind gene therapy for Duchenne
muscular dystrophy (DMD). If approved, the potential one-time therapy could change the way patients with the
muscle-wasting disease are treated, although the FDA earlier this week said the company did not provide
"unambiguous evidence" that it will benefit patients with DMD. Sarepta is hoping to gain approval through the
FDA's accelerated pathway based on limited current data, and is conducting a late-stage trial to confirm the
therapy's actual benefit to patients. Initial data from that trial is expected by December with more full results to be
unveiled early next year.

• Shake Shack Inc: Activist investor Engaged Capital is planning a proxy fight for three board seats at high-end
burger chain Shake Shack, the Wall Street Journal reported on Sunday, citing people familiar with the matter.
Including swaps, Engaged has a roughly 6.6% stake in the chain, the report said. The U.S.-based shareholder
activist has determined ways to double the company's profitability within two years and believes the burger chain
should get rid of its staggered board, which means that not all directors are up for election at the same time,
according to the report.

• TotalEnergies SE: Influential proxy advisory ISS recommended that TotalEnergies investors support a climate
activist shareholder resolution calling for faster emissions cuts at the May 26 annual general meeting, according to
a document seen by Reuters. The resolution filed by climate activists Follow This, supported by a number of
institutional investors, asks the French firm to align to the Paris Agreement goal of keeping global warming below 2
degrees Celsius above pre-industrial levels. TotalEnergies forecasts its overall greenhouse gas emissions will not
see a big reduction by 2030 given it wants to grow its gas business and has recommended shareholders vote
against Follow This.

• TPG Inc: U.S. private equity firm will buy Angelo Gordon, an investment company with focus on credit and real
estate markets, in a deal valued at $2.7 billion, the companies said. The deal will allow TPG to expand into credit
investing since splitting from its credit arm Sixth Street in 2020 and provide Angelo Gordon with the scale to
capitalize on the credit and real estate markets. The cash portion of the transaction will be funded from TPG’s
current cash balance and undrawn revolver.

• Western Digital Corp: Kioxia Holdings and Western Digital are speeding up merger talks and nailing down a
deal structure, two sources with direct knowledge of the matter said, as a slumping flash memory market puts
fresh consolidation pressure on the world's No. 2 and No. 4 players. Japan's Kioxia and U.S. chipmaker Western
Digital have been hit hard by plunging market demand and oversupply. Combining their flash memory businesses
could boost competitiveness against rivals like South Korea's Samsung Electronics. Activist investor Elliott
Management, which owns convertible preferred shares in Western Digital, has been pushing the U.S. company to
split off its flash-memory business from its hard-drive division since making an initial stock investment last year.

FOCUS
Washington is determined to govern AI, but how?
U.S. lawmakers are grappling with what guardrails to put around burgeoning artificial intelligence, but months after
ChatGPT got Washington's attention, consensus is far from certain.

ANALYSTS' RECOMMENDATION
• 8X8 Inc: Baird cuts target price to $4 from $5, citing ongoing competitive concerns and a high debt level.

• Guardant Health Inc: Piper Sandler cuts target price to $30 from $35, reflecting higher operating expenditure
estimates.

• Harley-Davidson Inc: Citigroup lowers target price to $37 from $39, citing the risk of a guidance cut.

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ECONOMIC EVENTS (All timings in U.S. Eastern Time)

0830 NY Fed Manufacturing for May: Expected -2.50; Prior 10.80

COMPANIES REPORTING RESULTS

Catalent Inc: Expected Q3 earnings of 33 cents per share

CORPORATE EVENTS (All timings in U.S. Eastern Time)

1630 Cymabay Therapeutics Inc: Q1 earnings conference call
1700 Ast Spacemobile Inc: Q1 earnings conference call
1700 Grindr Inc: Q1 earnings conference call
1700 Navitas Semiconductor Corp: Q1 earnings conference call
1700 Nu Holdings Ltd: Q1 earnings conference call
1700 P10 Inc: Q1 earnings conference call
1700 Xp Inc: Q1 earnings conference call

EX-DIVIDENDS
Alcoa Corp: Amount $0.10
B Riley Financial Inc: Amount $1.00
Carlyle Group Inc: Amount $0.35
Chord Energy Corp: Amount $1.25
ConocoPhillips: Amount $0.51
Dolby Laboratories Inc: Amount $0.27
Exxon Mobil Corp: Amount $0.91
Hercules Capital Inc: Amount $0.39
MSA Safety Inc: Amount $0.47
PC Connection Inc: Amount $0.08
PennyMac Financial Services Inc: Amount $0.20
Permian Resources Corp: Amount $0.05
Reinsurance Group of America Inc: Amount $0.80
Timken Co: Amount $0.33
Welltower Inc: Amount $0.61

(All analysts' estimates are according to I/B/E/S Refinitiv data

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