Healthcare

Aetna pummelled by fears of spiralling costs

28 Jul 2006

The US health insurer beat secondquarter estimates. Yet shareholders sent the stock crashing. Aetna s healthcare bills rose faster than premiums again. Investors are concerned healthcare inflation will rise out of control.

The biggest risk in HCA deal is political

25 Jul 2006

Government intervention in healthcare could play havoc with the fine financial calculations underlying the hospital group's buyout. HCA's close to ties to the Senate's majority leader Bill Frist have helped in the past. But they could turn counterproductive.

Will HCA’s $33bn LBO best RJR’s return?

24 Jul 2006

The takeover of the hospital chain by Bain, KKR and Merrill establishes a new private equity record, trumping the RJR deal. But unlike the lacklustre performance of its predecessor, it is easy to see how HCA s new owners can make this one work out financially.

Wellcome Trust taps exuberant credit markets

3 Jul 2006

The £12bn UK charity is borrowing £500m at ultralow rates for 30 years and using the proceeds for investment. Loose credit markets make this a smart bit of arbitrage. Unfortunately, few other European charities are likely to follow.

Full steam ahead for healthcare buyouts with £2.2bn deal

25 Apr 2006

Netcare s purchase of GHG as the largest healthcare buyout in Europe shows that enthusiasm for the sector is still strong. Aside from an ageing population, a key driver for these transactions is demand for the properties these companies hold.

Investor AB’s $4.9bn Gambro buyout looks clever

4 Apr 2006

The Swedish investment company is participating in the buyout of the healthcare company in which it already owns a 20% stake. The deal almost triples its stake. Assuming normal levels of leverage, Investor will also take out E90m in cash.

Boston slugs J&J with $27bn Guidant bid

17 Jan 2006

The US medical device company looks to have knocked Johnson & Johnson out of the bidding for Guidant by offering $80 per share. J&J could rise from the canvas. But letting Boston Scientific claim Guidant is a better idea.

Bird flu could create economic havoc

10 Jan 2006

The odds on a pandemic have risen after an outbreak in Turkey. It has highlighted the inadequacy of many countries' contingency planning. If the disease does start to spread between humans, the economic disruption could be immense.

Biotech has mixed record on 30th anniversary

6 Jan 2006

The industry may have bright prospects, but biotech stocks have not been a cureall. Returns have been unevenly distributed and volatile. The market doesn t appear as attractive now as it did in 2002. But some value probably resides in the biotech minnows.

Boston Scientific debt deal sign of buoyant times

13 Dec 2005

The medical devices maker has been able to borrow $14bn at thin margins to buy Guidant despite its aggressive leverage. Following hard on the heels of Koch s $11bn mega loan, Boston s deal shows just how eager banks are to lend.

HealthSouth turncoat had it coming

12 Dec 2005

The 5year sentence for the former HealthSouth finance officer who testified against acquitted boss Scrushy may look harsh. But it's wrong to conclude he s paying for Scrushy. There s a lesson here for cooperating witnesses in future fraud trials.

Boston Scientific springs $25bn Guidant bid

5 Dec 2005

The surprise counterbid puts J&J on the back foot. It cut its bid, saying Guidant was worth less than it thought. Raising now would be hard. Boston's tactics have been smart, but has it also been smart on value? The fall in its share price suggests investors aren't yet convinced. Boston's tactics have been smart. But has the group been smart on value?

Smith & Nephew shares look cheap

27 Oct 2005

The UK orthopaedic group s shares have sunk to a twoyear low over concern that implant prices will stagnate. This is overblown. The market should see 15% sales growth for years, as an older and obese population needs more joints replaced.

Fresenius spending spree continues

14 Oct 2005

The German medical group is determined to play a leading role in the consolidation of the country s fragmented healthcare market. But Fresenius is paying a full price for the Helios hospital chain.

ABN Amro wins E1.3bn auction for The Priory

5 Jul 2005

The Dutch bank outbid its financial sponsor clients to nab the UK s renowned mental health clinic for a price well above what was expected. This is more than just a principal investment. ABN hopes to award itself financing, hedging and even M&A mandates as the company grows.

Market cools to healthcare IPOs

20 May 2005

This was supposed to be the year European companies would raise boatloads of money. It isn t. Prostrakan is the latest and largest group to try its luck. It may be a better bet than most, but the window is closing.

Investors should block Fresenius transformation

16 May 2005

The dialysis group plans to simplify its capital structure but also adopt a legal form that vests more control with the family company. Ordinary shareholders have little to gain from this change. And it may result in FMC trading at a discount.

Johnson & Johnson shells out $24bn for Guidant

16 Dec 2004

The price suggests that the US healthcare giant is destroying a slight amount of capital in exchange for growth. One wild card: combining the two groups technologies could yield synergies. But any resulting products aren't likely until 2008.

Smiths’ conglomerate strategy works – for now

10 Dec 2004

Investors cheered the UK engineering group s acquisition of Medex. Its four pillars haven t landed it with much of a conglomerate discount. More bolton acquisitions could make sense. But in the long term, the best option may still be to break itself up.

Can private equity make money from nursing homes?

1 Dec 2004

Funds have bought up most of the major UK nursing companies in hopes of getting in on the growing market. But the high prices being paid, and the limited scope for cost cutting could make outsize returns a thing of the past.