Healthcare

Indian hospital deal merits a second opinion

24 May 2018

A Fortis Healthcare director was ousted by shareholders after three others facing a similar fate resigned a day earlier. It’s a rebuke of the decision to sell a minority stake to local tycoons. A fresh review of four other offers by a new board should lead to a better prognosis.

Review: Silicon Valley gets a reality transfusion

18 May 2018

“Bad Blood” tells how Theranos, a company with a single flawed idea, attained a $9 bln valuation. A combination of need, greed, ignorance and hubris made it possible for a seductive fairy tale to outpunch scientific skepticism. Companies can’t live on stories forever, though.

U.S. drug-price plan needs more bully, less pulpit

14 May 2018

Donald Trump wants to cut the cost of pills. His approach targets flush middlemen, Medicare’s limited negotiating ability, murky pricing and the inevitable foreign boogeymen. Yet calls for self-regulation have led sector investors to sigh with relief. He’ll have to get tougher.

Hardy Indian hospital auction takes sickly turn

11 May 2018

A divided Fortis board chose selling a minority stake to two investors with little experience running hospitals over four other offers, including a $1.3 bln takeover. Half the directors may be gone before shareholders vote. The disarray leaves room for a hostile bid.

Supply-chain efficiency carries a cost

9 May 2018

Ford, ZTE and Mylan are suffering as subcontractors can’t provide sufficient parts for pickup trucks, mobile phones, and allergy pens. Economies of scale, lean inventories and specialization raise returns to capital – and make companies more vulnerable to disruption.

Indian hospital penta-scrum poses board quandary

9 May 2018

Five bidders want to invest in ailing Fortis, valuing it at up to $1.4 bln. Offers range from small stakes to a full takeover. Lenders and hedgies may want a quick exit, but in a critical care business, directors would do well to consider a treatment that works for the long term.

Takeda swallows big dose of risk to buy Shire

8 May 2018

The Japanese drugmaker finally reached a deal to buy its Irish peer, for $62 bln. Takeda can just about make the deal math work with $1.4 bln of annual cost savings. It requires big cuts to R&D, however, and operating with excessive debt for a while. That's a dangerous mix.

Sickly IPO may infect Hong Kong waiting room

8 May 2018

The group behind medical app Good Doctor fell below its float price on the second day of trading. The diagnosis is simple: this was overpriced, like other recent deals. With giants such as Xiaomi set to list, bankers may want to leave more on the table to keep the market healthy.

Elliott weaves snare around subpar Athenahealth

7 May 2018

The healthcare-software firm is long on vision under founder Jonathan Bush, but it has been patchy on performance despite the activist’s presence. Elliott’s $6.9 bln bid, including debt, raises the pressure on the board to do more and may force other bidders out of the woodwork.

China offers miracle cure for Aussie cancer unit

7 May 2018

Beijing-based buyout firm CDH Investments is offering $1.4 bln for Sirtex, the liver cancer specialist. The non-binding bid is a 20 pct uplift on an agreed deal with U.S. suitor Varian. The rich valuation upsets the logic that a strategic buyer can pay more than a financial one.

China’s Ping An peacocks for its tech feathers

30 April 2018

The finance giant has raised over $1 bln in an IPO of its medical arm, says IFR, and three more spinoffs are in the works. Ping An wants to be seen as a tech titan, not a lumbering insurer. That’s a stretch but showing off its new economy divisions is a smart and valuable move.

Once-bitten merger arbitrageurs are twice Shire

27 April 2018

The $62 bln Takeda bid should in theory be an attractive hedge-fund plaything. A yawning gap between the offer value and the target's share price suggests otherwise. Multiple currencies and time zones act as deterrents. So too do the scars from Shire's deal with AbbVie.

Australian hospitals operator given LBO lifeline

27 April 2018

An unwanted $3.1 bln offer values Healthscope only a bit higher than its 2014 IPO price. The deal is also being led by the same buyout executive who bought and sold the company for TPG. Healthy skepticism is warranted, but there's a chance to be discharged without further injury.

Ping An healthcare IPO looks pricey but fit

23 April 2018

The Chinese finance giant has launched a $1 bln IPO of its medical arm. By connecting patients with doctors, drugs and health services online, the Good Doctor app supports policy while accumulating valuable data. It’s not yet profitable, but the premium looks justifiable.

Takeda pushes its globetrotting ambitions too far

23 April 2018

The Japanese drugmaker led by a French CEO added cash to a slightly sweeter $60 bln bid for Irish rival Shire. Takeda's target is cheap, but the big premium will be hard to justify. The deal also would flood the market with shares and ratchet up debt. It's all a big stretch.

Shire makes needy suitors work for risky bet

19 April 2018

The London-listed pharma group has rejected a 42 bln pound offer from Osaka-based Takeda, and may now face a bid from Botox-maker Allergan. Shire’s business has its challenges, but its would-be acquirers have strategic issues and need a deal. The risk of overpaying is going up.

P&G drug deal needs vitamin shot to persuade Peltz

19 April 2018

The U.S. consumer giant is paying 3.4 bln euros for the consumer arm of Germany’s Merck. For it to make sense P&G will have to crank up sales of Seven Seas vitamins while cutting out costs. Board member Nelson Peltz’s criticism of past acquisitions further raises the stakes.

Shire cancer sale boosts weak takeover defences

16 April 2018

The $47 bln drugmaker facing a potential bid from Takeda sold its cancer treatments for $2.4 bln. Shire’s debt and doubts over its business weaken its resistance. The best bet may be to show that a Takeda offer undervalues its business. But more radical surgery could be tricky.

Ailing Indian hospitals warrant healthy bid action

16 April 2018

Buyout firm TPG is backing one of three rival offers valuing scandal-hit Fortis at up to $1.3 bln. Private services are in demand with rising incomes and an increase in lifestyle diseases set against New Delhi's failure to provide decent healthcare. Medical tourism helps, too.

Bayer investors get unwelcome antitrust present

10 April 2018

The German company has struck a deal with U.S. regulators to clear its $60 billion acquisition of seed group Monsanto, the Wall Street Journal reported. After EU approval in March, a two-year saga is almost over. Bayer’s sagging stock price means shareholders can hold the cheers.