Morning briefing: SpaceX “to file” IPO prospectus; Int’l Biotechnology boosted by Merck bid for Terns; Golden Prospect considers management proposals from CQS, Tufton and others
SpaceX is to file a prospectus for an initial public offering with US regulators as early as this week, according to reports, with the Times saying this starts a countdown to a $1.5trn flotation that could see Elon Musk’s rocket, satellite and AI group raise $75bn. Baillie Gifford trusts Scottish Mortgage Trust (SMT), Edinburgh Worldwide (EWI), Baillie Gifford US Growth (USA) and Schiehallion (MNTN) have big holdings between 11% and 15% of assets. RIT Capital Partners (RCP) held a 2.5% weighting at 31 December.
International Biotechnology Trust (IBT) rose 3% yesterday following the latest acquisition of one of its holdings by big pharma. Merck has agreed to buy Terns Pharmaceuticals for $6.7bn in a $53 cash per share bid at a 31% premium to the 60-day average. Terns represents 3.6% of IBT’s assets and it originally invested at $3 a share in March last year. The purchase price gives it a 17.7 times return on its investment in 12 months. Fund managers Ailsa Craig and Marek Poszepczynski said: “The wave of M&A activity in the biotechnology sector shows no sign of slowing, and this is the second M&A transaction this month for our portfolio companies following the acquisition of Day One Biopharmaceuticals by Servier earlier in March.”
Golden Prospect Precious Metals (GPM) has received a number of proposals from fund managers including CQS, the incumbent, and Tufton, where managers Keith Watson and Robert Crayfourd are set to join in June. It will consider all proposals and does not expect its strategy to change. Chair Toby Birch said: “The Company, which in October this year will reach its 20th anniversary, stands out in the investment trust sector as the only trust with the characteristics of a leveraged play on the gold price by investing in gold and precious metals mining equities – therefore it can act as a portfolio hedge and has the potential to deliver outsized returns, like it did in three of the last seven years. Furthermore, GPM makes full use of its closed-end structure by investing exclusively in small and mid-cap stocks.” Last year it was the best performing investment company in the UK with a 165% shareholder return underpinned by the 56% rally in the sterling gold price.
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