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Nicole Lunger/Missouri Business Alert

Missouri Minute: Judge approves T-Mobile, Sprint merger; state marijuana chief to testify



Good morning, MBA readers,

Sprint’s marathon merger is one major step closer to the finish line. A federal judge on Tuesday approved T-Mobile’s $26 billion acquisition of Sprint, allowing a deal that would reshape the U.S. wireless industry and take away one of the Kansas City area’s most prominent corporate headquarters. U.S. District Judge Victor Marrero said the deal between Bellevue, Washington-based T-Mobile, the country’s No. 3 wireless carrier, and Leawood, Kansas-based Sprint, the No. 4 wireless carrier, wouldn’t substantially lessen competition in the industry. A group of state attorneys general had sued to block the merger, claiming it would hurt consumers. Wireless stocks spiked on the news, a signal that investors expect elevated profits across the industry. Read on for more about Sprint’s merger and the rest of the day’s top business news.


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Federal judge approves merger between T-Mobile, Sprint
U.S. District Judge Victor Marrero said the deal between T-Mobile, and Sprint would not significantly reduce competition in the industry. His ruling eliminates one of the final hurdles to the $26 billion merger. (Wall Street Journal, Associated Press)

Missouri marijuana chief to testify on licensing complaints
Lyndall Fraker, who oversees Missouri’s medical marijuana program, has agreed to testify before a Missouri House committee Wednesday about how his department awarded licenses to sell medical marijuana. House leaders asked Fraker to testify because some 200 complaints have been filed over the licensing process, which some applicants say was ripe with inconsistencies. (Kansas City Star)

Bayer asks California court to reverse $86 million Roundup cancer verdict
The German pharmaceutical and chemical conglomerate has asked a California appeals court to overturn an $86 million verdict that found the company and its Roundup weedkiller responsible for a couple’s cancer. Chief mediator Ken Feinberg has also asked a judge overseeing a bulk of the thousands of Roundup lawsuits to postpone all legal deadlines by one month, a move that some analysts believe signals at a comprehensive settlement. (Reuters)

Edgewell folds $1.37 billion deal for Harry’s after FTC flexes opposition
The personal care company, which formerly had its headquarters in St. Louis County and maintains a large employee presence there, is forgoing its plan to acquire upstart Harry’s after the Federal Trade Commission threatened to sue to block the deal. The FTC argued that the acquisition by Edgewell, which owns Schick razors, would harm competition in the U.S. shaving industry. (Reuters)

KC’s Country Club Plaza changes hands after $3.6 billion real estate merger
Simon Property Group, the largest shopping mall operator in the U.S., has agreed to acquire rival mall-owner Taubman Centers and most of a real estate investment trust that owns the Country Club Plaza in Kansas City. The current Taubman executive team will continue to manage its properties. Simon also owns St. Louis Premium Outlets in Chesterfield, Osage Beach Outlet Marketplace in Osage Beach and Battlefield Mall in Springfield. (Kansas City Business Journal)

Ronnoco continues expansion beyond coffee with Houston acquisition
The St. Louis-based beverage company announced Monday that it has acquired Trident Beverage, a 30-person firm in Houston that distributes health drinks and dispenser products in 14 states. The deal gives Ronnoco a foothold in multiple new markets. Terms of the deal were not disclosed, but Ronnoco said the combined company is expected to surpass $100 million in sales this year. (St. Louis Post-Dispatch)

St. Louis law firm names seven local partners
Lewis Rice has named seven new partners specializing in a range of practices in its St. Louis office. Six of the new partners are women. (St. Louis Business Journal)

Digital Ally turns to the market to keep Nasdaq listing
The Lenexa, Kansas-based maker of recording devices for law enforcement agencies has proposed a new issuance of stock and stock warrants totaling $30 million. The move comes as Digital Ally fights to meet Nasdaq’s minimum required market value of $35 million following a July compliance warning from the exchange. (Kansas City Business Journal)

Wash U Alzheimer’s drug study fails to yield progress
Two experimental drugs developed by Washington University researchers have failed to prevent or slow mental decline in relatively young patients with Alzheimer’s Disease as initially hoped. The five-year study involved 200 participants in the U.S. and was funded by the U.S. National institute on Aging and the Alzheimer’s Association. (Associated Press)

Chateau on the Lake named best Missouri resort
Branson’s Chateau on the Lake Resort, Spa & Convention Center was named the best resort in the state by U.S. News & World Report. It was picked 14th-best hotel in the state and ranked 311th among U.S. resorts. (U.S. News & World Report)

Arizona company sells $3.3 million Springfield hotel
Tri-Star Hotels, which owns 65 properties in 17 states, has sold the Sleep Inn in Springfield to Avyukth LLC. Rolling Oaks Hospitality, which had managed the property for 17 years, will no longer manage Sleep Inn. (Springfield Business Journal)


Say that again

“We see the role of Elliott here as playing matchmaker for a potential sale.”

That’s J.P. Morgan analyst Christopher Turnure writing in response to a scathing shareholder letter from activist investor Elliott Management to Evergy, the Kansas City-based electric utility, the St. Louis Post-Dispatch reports. Elliott, a New York-based hedge fund that owns 4% of the utility, expressed dissatisfaction with the way things are being run at Evergy, adding that one of the options for relief could be a merger with another utility. In 2016, St. Louis-based Ameren expressed interest in a merging with Westar Energy, one of the companies that ultimately merged to form Evergy. Turnure called an Ameren-Every marriage “logical.” Other analysts, such as Edward Jones’ Andy Smith, say Ameren is not Evergy’s most compatible mate. Ameren, Smith said, has its own growth plan and doesn’t need to make a “very expensive acquisition.”


Go figure

14%

The Service Employees International Union chapter in St. Louis voted Monday to ratify a new contract mandating a 14% wage increase each year of the three-year agreement. That means St. Louis janitors are going to get the $15 per hour minimum wage they’ve been asking for — but not immediately, the St. Louis Post-Dispatch reports. With the janitors’ current median wage of $10.75 per hour, the annual increases are projected to put wages over $15 per hour by 2022. The contract, ratified after months of demonstrations and negotiations, also freezes health care costs for janitors and mandates higher pension contributions and paid sick days. The union represents more than 2,100 janitors employed by private cleaning companies.


Hello, my name is

Marc Naughton

One of Cerner’s longest-serving executives just sold a bunch of stock — 176,000 shares, worth nearly $14 million, the Kansas City Business Journal reports. Naughton, who has served as the company’s CFO since 1995, still owns just under 100,000 shares of stock in the North Kansas City-based health care IT company, worth around $8 million. In June, former Cerner COO Mike Nill sold 85% of his company stock for around $17 million. Five months later, he announced his departure.


It’s been a pleasure doing business with you this morning.

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