Mega-rejections signal M&A’s Taylor Swift moment 22 Jun 2015 U.S. health insurer Cigna brushed off a $54 bln takeover bid from Anthem while pipeline operator Williams spurned Energy Transfer’s $53 bln approach. Meantime, the 25-year-old pop idol forced Apple to pay up for music. In a hot market like this, love won’t be unrequited forever.
Health insurer M&A is risky Obamacare side effect 15 Jun 2015 Cigna rebuffed Anthem’s $45 bln offer while mulling a $32 bln bid for Humana. The urge to merge is a predictable attempt to boost profit after the controversial law clamped down on premiums. With only five big insurers, though, any deals will get a thorough antitrust checkup.
Biotech bonanza foils Big Pharma schmuck insurance 11 Jun 2015 Six months after GlaxoSmithKline sold a compound for $5 mln to a hedge fund manager, he has taken it public and landed a $3 bln valuation. It shouldn’t prevent unloved lab discoveries from being licensed. The Axovant IPO just suggests the deal structures could be smarter.
Shire can justify $19 bln price tag for Actelion 8 Jun 2015 Dublin-based drugmaker Shire is pondering a $19 bln bid for Swiss peer Actelion, media reports say. The speculation pushed shares in the potential target up 9 pct. Possible cost synergies underpin the implied 21 pct premium, but a higher markup would quickly become a stretch.
CVS-Omnicare portends lower doses of pharmacy M&A 21 May 2015 The drugstore giant’s $10 bln purchase of the pharma services firm gives it entrance to nursing homes and expands specialty medicine distribution. But the increasingly concentrated industry is already raising antitrust concerns. The era of frantic mergers may be nearing an end.
TPG’s $8 bln drug sale far from generic 18 May 2015 With the sale of Par Pharmaceutical, a maker of off-brand medicines, the buyout firm will generate an eight-fold return on its investment in three years. Though it’s a rare development, the eagerness of buyers like Endo International means more sellers are bound to benefit.
Fitbit IPO flaunts refreshing financial health 8 May 2015 The maker of wearable fitness trackers marks a rare Silicon Valley stock sale with strong profit alongside fast sales growth. Fitbit’s founders also exhibit an uncommon focus. A dual-class share structure runs with the crowd, however, and Apple is just now sprinting in this race.
Glaxo smartly bucks the breakup trend 6 May 2015 The British drugmaker scrapped a flotation of its HIV unit and slashed a planned cash return. That’s unfashionable in an era of spinoffs and shareholder payouts. GlaxoSmithKline, though, needs diversity and financial firepower while it tends to the core pharmaceutical business.
Alexion puts high stock to good use in biotech bid 6 May 2015 The drugmaker’s $8.4 bln offer for rival Synageva includes a whopping 136 pct premium. The stonking price is based on the rare disease specialist’s view that the market underestimates its target’s value. Exchanging a chunk of pricey paper for the assets may be a savvy move.
Pharma Arbageddon fears keep traders on sidelines 27 Apr 2015 Teva is after Mylan, which wants Perrigo. Such multibillion-dollar hostile deals are usually catnip for M&A punters. Recent failures have made them skittish, though. And these two battles come with cross-border complexity, antitrust and a poison pill. No wonder arbs are wary.
AstraZeneca’s reliance on one-offs is unsettling 24 Apr 2015 The pharma group managed to beat expectations in Q1 despite wrestling with patent expiries. One-off disposals of $309 million helped boost operating profit to $1.8 billion. Raising funds makes sense at a time when Astra is challenged, but investors shouldn’t rely on them.
Actelion’s pay spat reflects tech myopia 17 Apr 2015 A Citigroup analyst has questioned Actelion’s exclusion of stock options from its chosen earnings measure. The Swiss biotech firm may be an outlier in Europe, but custom-made earnings are common in U.S. tech and biotech companies where valuation is more art than science.
Alibaba health hype needs dose of financial logic 15 Apr 2015 The e-commerce group will transfer its small online pharmacy unit to a listed affiliate for $2.5 bln in shares. The unit’s market value promptly soared 65 pct. Becoming Alibaba’s sole online health vehicle is valuable. But the financials of the deal don’t justify the excitement.
Mylan’s $29 bln Perrigo play may keep suitor away 8 Apr 2015 The specialty drugmaker joined pharma’s deal frenzy with an unsolicited bid for its Irish-based rival. An over $3 bln rise in Mylan’s share price reflects more than possibly juicy synergies, though. It suggests the firm’s a target – and eager for a dose of takeover prevention.
$12.8 bln prescription may clear up pharmacy M&A 30 Mar 2015 UnitedHealth should generate savings worth more than the 27 pct premium it’s paying for drug middleman Catamaran. But United is playing catch-up. And its target is usually a buyer. Catamaran’s capitulation indicates benefits managers no longer need a dose of dealmaking.
Novo Nordisk can stay on Glaxo’s level 27 Mar 2015 The Danish drugmaker’s shares jumped 10 pct on hopes of drug approval. That puts its market cap above $140 bln: firmly in pharma’s big league and now well above GlaxoSmithKline. Novo’s much higher earnings multiple is deserved, given its inventiveness and focus on diabetes.
Biotech-insurer connection looks wildly premature 23 Mar 2015 Early results for Biogen’s Alzheimer’s drug added $10 bln to its value on Friday. Now an analyst comment that it might cut long-term care payouts for Genworth has sent the insurer’s stock up 5 pct. Past failed treatments make that a step too far – and even a sign of a bubble.
Drugmaker IPO should ease any TPG anxiety 19 Mar 2015 The buyout firm may quadruple its investment – at least on paper – in Par Pharmaceutical, a generics maker it bought for $1.9 bln less than three years ago. The return delivers a useful lift as TPG raises a new $10 bln fund. It’s also good therapy for a dispiriting lawsuit.
Valeant’s $11 bln bid may have scored two knockouts 16 Mar 2015 By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.
Valeant’s mini-me turns into a hostile M&A rival 11 Mar 2015 The drugmaker’s stock has rocketed up as it has rolled over competitors, cut costs and preserved profit with a low offshore tax rate. Endo International, now led by Valeant’s ex-president, has copied the model in spades, trumping its rival’s offer for Salix with an $11 bln bid.