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Swiss Stocks Blink Red; PolyPeptide Group Gains Amid Takeover Bid

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Swiss stocks kicked off the new trading week in negative territory, with the Swiss Market Index down 0.62% on Monday's close, as investors gear up for a busy week of earnings releases, economic data prints and the European Central Bank's latest rate move.

Sika (SIKA.SW) is among several manufacturers of construction chemicals active in France, Germany and Spain to whom the European Commission sent its statement of objections over allegations of violating European Union antitrust rules. The companies are suspected of colluding to raise prices of chemical additives for cement and chemical admixtures for concrete and mortar between 2021 and 2022 amid higher raw material costs due to the COVID-19 pandemic and the Russia-Ukraine war. The Switzerland-based specialty chemicals company's stock shed 1.89% at closing.

On the flip side, PolyPeptide Group (PPGN.SW) saw its shares rise 4.79% after Samsung Biologics made an all-cash public tender offer to acquire the Swiss contract development and manufacturing organization for an equity valuation of 1.46 billion francs. PolyPeptide's board intends to unanimously recommend that shareholders accept the offer, with completion of the deal anticipated toward the end of 2026.

"The Polypeptide board has recommended an offer from Samsung Biologics at CHF44.31 per share. The offer price is almost exactly at our CHF44 fundamental price target and consistent with the LBO framework we laid out in April, where we estimated that a 40% premium to the undisturbed CHF31.65 price could still generate a c.30% IRR for an acquirer," analysts at RBC Capital Markets said in a quick take note. "Draupnir's commitment to tender its 56% stake effectively makes this a done deal, in our view, and we doubt there will be competition issues given Samsung does not operate in the peptide space."

Elsewhere and on the geopolitical front, the US has Iran's foreign ministry spokesman, Esmaeil Baghaei, said diplomatic exchanges with the US are continuing through mediators and that his country will "take the necessary measures" to protect its sovereignty. The US is on its ninth consecutive night of strikes against Iran since the interim peace deal between the two countries collapsed.

Meanwhile, Andy Burnham is now the 59th prime minister of the UK after Keir Starmer formally resigned from the post. The change also marks the country's fifth prime minister in four years.

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