Biotechnology

AbbVie has to dig deeper to win Shire

20 Jun 2014

The U.S. pharma group’s recent $46 bln bid proposal equates to a lowish 30 pct premium over Shire’s value before speculation intensified this week. Likely synergies and possible rival offers justify Shire’s rebuttal. But the target can’t be complacent about investor support.

Shire’s independence harder to defend than Astra’s

18 Jun 2014

The UK-listed, Dublin-based pharma group is again in the grip of bid speculation after a frenzy of M&A in the sector. Astra may have repelled Pfizer, but the circumstances are very different. At least Shire has the outside chance of using an auction to get a bidder to pay up.

Abstinent Valeant might enable Allergan deal

17 Jun 2014

A slugfest between the acquisitive pharma group and its reluctant $50 bln-plus quarry will probably drag out for months. Wrangling over a shareholder meeting is one big issue. Meanwhile, Valeant will have produced results less muddled by M&A. These could be the deciding factor.

Morgan Stanley email shame begs a tech solution

16 Jun 2014

Messages sent by the bank’s head of M&A to Allergan look bad now that it works for hostile suitor Valeant. Merger practitioners, meanwhile, won’t like Allergan’s scorched-earth tactic releasing them. The episode does, however, prove there’s a market for a corporate Snapchat.

M&A shows symptoms of overheating

9 Jun 2014

Global deal volume is up 63 pct this year, and Monday’s mergers hint at toppiness. Merck is justifying a 239 pct premium with optimistic revenue synergies. Tyson Foods is overpaying in its $8.5 bln sausage deal. And investors are still boosting buyers’ shares. They may regret it.

Valeant urges $54 bln deal with carrot, two sticks

2 Jun 2014

The acquisitive pharma group raised its offer for Allergan again, if the Allergan board cooperates. Meanwhile hedgie Bill Ackman is threatening to unseat six directors – and Valeant could yet decide to go fully hostile. But questions over Valeant’s own stock remain its weakness.

Valeant’s sweetener comes off a little defensive

28 May 2014

Upping its bid for Allergan to $49 bln disappointed investors on both sides. Using a messy financial instrument probably didn’t help, especially after the target rejected the deal math and compared its suitor to Tyco. Valeant needs to do more to reclaim the aggressor’s role.

Nestle’s skincare buy-in has opportunistic streak

28 May 2014

The Swiss company, best known as a chocolatier, is paying Canada’s Valeant $1.4 bln for the marketing rights to a clutch of beauty treatments. It is Nestle’s first big move in the sector after February’s deal with L’Oreal. There are wrinkles. But they are worth wearing.  

Failed bid would leave Astra under pressure

26 May 2014

Pfizer looks foolish for the way it handled a $119 bln offer for the UK drugmaker. But its shares have barely suffered. Astra remains independent and yet it is now under more scrutiny. Some of its shareholders welcomed a possible takeover - and could again.

Astra-Pfizer needs a fresh start later in the year

21 May 2014

Some shareholders want the UK pharma company to talk to its American suitor now. But there is no honest route to a higher bid until August. Talks in the dying days of the bid timetable could actually delay a full move. An amicable cooling off period is the best plan.

Valeant’s slashing could trigger FDA lashing

20 May 2014

The Canadian pharma M&A machine buys rivals and strips costs to the bone. It promises to cut Allergan’s R&D spending from $1 bln to $200 mln and still develop drugs. That doesn’t look sustainable. It may not be enough to even finish studies on existing drugs that regulators require.

Loophole offers Pfizer risky way back into AZ deal

20 May 2014

The U.S. pharma group noted that it could technically make a higher offer for Astra if the target first agreed to its “final” $119 bln proposal. After this dodge, Astra could accept the real, higher price. But the UK takeover watchdog would almost certainly reject such cunning.

Pfizer spins $100 bln-plus deal as inessential

19 May 2014

Not many companies could back off an aggressive 12-digit shopping spree with credibility intact. But with its offer for AstraZeneca rejected, Pfizer’s shares are roughly back where they started. Its pre-existing plan to eventually break itself up makes the UK deal look optional.

AstraZeneca gets a summer reprieve

19 May 2014

The UK pharma group rejected Pfizer’s latest $117 bln approach, but indicated the U.S. suitor’s price was almost acceptable. Strong cancer trial data in June could protect Astra’s independence. Even if the target’s resistance weakens, Pfizer has boxed itself in until August.

Pfizer’s new AZ pitch is as unfriendly as it gets

19 May 2014

The U.S. drugmaker says it won’t go hostile for AstraZeneca, but has upped its non-binding takeover proposal to $117 bln, declared it “final” and slammed the board. The UK group is under real pressure to show it’s worth more. Yet Pfizer’s aggression is also an obstacle to talks.

Where should AstraZeneca shares be trading?

15 May 2014

The right price for the UK pharma group’s stock can be seen as the weighted average of two possible outcomes – a $100 bln-plus sale to Pfizer or a standalone future. A new Breakingviews calculator shows why the market seems to think a transaction will probably happen.

GSK case no cure for Chinese corruption

14 May 2014

Graft charges against three of the British drugmaker’s senior China executives suggest a top-down culture of bribery. What they really show is a broken healthcare system and a government many foreign groups don’t know how to handle. On both fronts, it’s still business as usual.

AstraZeneca saga reverts to UK takeover playbook

13 May 2014

Pfizer’s bosses were cast as villains in a grilling by lawmakers, while Astra’s played unpretentious scientists. Public antipathy raises the risks for the U.S. group of going hostile. With Astra’s CEO outlining the form of acceptable bid, Pfizer knows where it needs to convince.

Rob Cox: The worry now is a brewing M&A bubble

13 May 2014

The corporate urge to merge has gone into global hyper-drive. Activity has surged as investors egg companies on and bid up the shares of acquirers well beyond mathematical prudence. When new metrics to justify the irrational are trotted out, it’s time to exercise caution.

Edward Hadas: AstraZeneca is no one’s property

13 May 2014

Like any big company, the UK drugmaker is a human organisation with many social roles and responsibilities. The property model doesn’t really fit. Investors can lobby for their interests in a proposed $106 bln Pfizer takeover. The board and politicians should listen but not obey.