Breakingviews

Monsanto may be overestimating independence

July 19, 2016

The U.S. crop giant rejected Bayer's latest $64 bln takeover offer, calling it "financially inadequate." To achieve the $125 a share on offer on its own over three years would be tough, however, even with aggressive assumptions. Monsanto boss Hugh Grant is protesting too much.

Bayer’s Monsanto bid yields poor financial harvest

May 27, 2016

The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.

BASF best leaving Monsanto seeds for the birds

May 19, 2016

Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.

Biotech firm’s stock buyback emits bad bouquet

November 12, 2015

NantKwest wants to snap up a large chunk of stock at a big discount to its July IPO. Yet the biotech controlled by Patrick Soon-Shiong needs the money as it’s likely to burn cash for years. A buyback would, though, prop up the price ahead of an expiring lockup for executives.

Novartis spinoff is neat cure for Big Pharma ills

July 29, 2015

The $275 bln Swiss pharma group is injecting three drugs-in-development into a new entity backed by UK investors. Venture capital markets can be better at valuing and nurturing small drugs than Big Pharma shareholders. With biotech markets hot, there’s room for copycat deals.

Danaher breakup eases sting of pricey Pall deal

May 13, 2015

The $60 bln dentures-to-lasers concern is not cutting enough costs to justify its $13.8 bln pounce for the filter maker. But boss Tom Joyce’s surprise decision to voluntarily split Danaher in two dangles the prospect of better value for shareholders. The trick is to deliver.

Pure play gets new spin in filter maker M&A

May 13, 2015

Suitors may be willing to splash out $13 bln for Pall, the largest publicly traded air and water purification company. That’s punchy and cost cuts might not cover the premium. But Pall’s scarcity value, profitability and burgeoning biotech customer base make it a tempting target.

Alexion puts high stock to good use in biotech bid

May 6, 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.

Valeant’s $11 bln bid may have scored two knockouts

March 16, 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.

AbbVie CEO may have overpaid again in $21 bln deal

March 5, 2015

Richard Gonzalez, the pharma firm’s boss, shelled out $1.6 bln last year to get out of a hard-won bid for Shire. Now he has come out on top in an intensely competitive biotech auction. AbbVie may get a blockbuster drug, but at a high cost: It must share profits with rival J&J.