Healthcare

Hostile health deal now requires intensive care

11 Apr 2011

Unsolicited offers, like Community Health's $3.3 bln bid for Tenet, can get nasty. But this poison pill alleging its suitor has engaged in fraud is plain toxic. Shares of both companies suffered badly. Until regulators uncover the truth, any deal will be on life support.

Republican U.S. budget plan enlists market forces

7 Apr 2011

The blueprint is simple: cap federal healthcare spending to cut debt. But the idea risks backlash if medical cost inflation doesn't slow. The GOP thinks competition rather than bureaucratic tinkering will help. International examples provide some encouragement.

U.S. property hotspot revealed by $17 bln of deals

28 Feb 2011

Giant wagers in commercial real estate, exemplified by the Blackstone and Ventas transactions unveiled on Monday, might appear risky. After all REITs, one gauge of the sector, are trading at premium valuations. But a recovering economy and tight supply make it a sound bet.

HCA provides cure for what ails mega-buyouts

22 Feb 2011

The hospital operator, possibly worth $43 bln, pared its IPO size by a fifth. But by virtue of HCA's valuation and dividends, private equity backers should still triple their 2006 investment. It's a healthy sign for the era's giant LBOs though many others still need nursing.

Deal machine beats PE barons to $5.8 bln deal

7 Feb 2011

Danaher has snatched medical group Beckman Coulter, outbidding buyout firms in the process. It shows that despite relatively easy credit, private equity isn't the only acquirer that can pay up. But the acquisitive Danaher isn't your typical strategic buyer, either.

Sanofi, Genzyme head towards uncertain compromise

14 Jan 2011

The U.S. biotech may succumb to Sanofi's advances if both groups can agree on a payout tied to future performance. A contingent value right, worth some $1.5 bln, may leave investors wanting. But with Genzyme still struggling, this may be the best choice.

S&N no pushover for J&J

10 Jan 2011

The UK orthopedics group is in play, with U.S. rival J&J the likely predator. A low rating makes S&N vulnerable, although management can plausibly argue it deserves an $11 blnplus valuation. Either way, its first step should be to clarify the status of any approach it has had.

Companies hold off eating R&D seed corn

16 Dec 2010

Hard times hurt. One danger of a sharp recession is that companies cut back spending on innovation, as they did during the Great Depression. Luckily, only truly hard up industries did so during the last crisis. That's good news for future growth.

Novartis throws in towel on Alcon minorities fight

15 Dec 2010

The Swiss drugmaker has upped its offer to Alcon's minority shareholders to $168 a share the same it is paying Nestle for its 77 pct stake. Alcon's independent directors have won their spirited fight. Now Novartis can extract the synergies it needs from the $52 bln deal.

Obamacare’s constitutionality not the only hurdle

13 Dec 2010

A Virginia court ruling means the Supreme Court will decide if a key piece of Obama's healthcare law is constitutional. If the majority rules Americans can't be forced to buy insurance, the plan may implode. Even if it doesn't, U.S. health spending is on an unsustainable course.

Tenet tries novel, if risky, dart frog defense

10 Dec 2010

The U.S. hospital operator pulls out many arguments in rejecting a $3.3 bln hostile bid from rival Community Health. The most unusual: our past performance has been so ghastly that you'll be sorry if you buy us and you can't pay enough either.

Deficit panel soft-pedaled Medicare burden, anyway

3 Dec 2010

Obama's commission defined tough fiscal choices for Washington, though its members weren't unanimous enough to force the ideas on Congress. But even if they had, the panel pulled punches on healthcare cuts. Reducing that burden may be central to the next presidential election.

Happiness index must be quantitative and broad

25 Nov 2010

David Cameron has launched a national debate on ways to measure UK wellbeing. He's right that economic development cannot just be measured in money. But to succeed where others have failed, the indicator should be modelled on respected series of data like the retail prices index.

HCA takes advantage of more pliant bondholders

9 Nov 2010

The hospital chain had filed for an IPO to help pay down debt. Now it s selling $1.5 bln of highyield bonds to pay a massive dividend to its private equity backers. If bond investors are clamoring for risky debt at crazily low yields, HCA s owners would be mad to resist.

The American Avon lady may be a poison pill

13 Oct 2010

Takeover talk has lifted shares of the doortodoor cosmetics firm. Strong demand in emerging markets may make Avon a tempting target for L Oreal or others. But the Avon ladies in Brazil and China come with American sisters whose business model might turn off erstwhile suitors.

Calpers move shows U.S. activism going mainstream

18 Jun 2010

The California pension giant is recruiting potential directors in anticipation of new rules making it easier to nominate them. Traditional activists motives aren t always clear. But in Calpers, Main Street investors may finally have a champion to help shake up clubby boards.

Mental health deal should ease shareholders’ minds

17 May 2010

Executives at Psychiatric Solutions were awarded rich options packages shortly before news leaked of a buyout with the CEO onboard. The timing looked unsavory, and led to a federal investigation. But it also spurred an auction, bringing a higher $2 bln bid from rival UHS.

Buyout barons may exit mega-LBOs with aplomb

7 May 2010

At least that's the implication of HCA's planned IPO. KKR and other backers are taking the U.S. hospital operator public in a deal that could nearly double their investment and chalk up annual returns of some 20 pct. Perhaps there's a place for gigantic buyouts after all.

Russia’s budget misses greatest health care need

23 Apr 2010

Putin has pledged to boost health care spending by $8 billion annually in the runup to key elections. The economic logic is shaky, and more money won't do much to cure Russia's health crisis. Prevention, not least a serious crackdown on hard alcohol, would be more effective.

Unilever’s shocking idea: put the customer first

6 Apr 2010

There's no business without customers. This blindingly obvious truth is frequently lost in the clamour for shareholder value. Unilever's CEO Paul Polman has reasserted it and the shares have risen dramatically. Other bosses, and investors, might learn something from him.