Qube edges ahead in Aussie infrastructure fight

November 26, 2015

Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.

Pfizer’s war chest stealthily rebuilt by Allergan

November 25, 2015

The $160 bln mostly stock deal will create a combination gushing $25 bln of operating cash flow annually. An offshore tax address means there’s no reason to keep over $60 bln of cash on its balance sheet. That’s a lot of financial firepower to buy back shares and fuel more M&A.

Delay in Pfizer split is material adverse event

November 24, 2015

The $160 bln acquisition of Allergan will cut taxes and add solid assets, but it’s also causing Pfizer to defer until 2018 a decision on splitting up. Even though the company’s disposals have added greater value than acquisitions, CEO Ian Read seems more eager to bulk up.

Pfizer barely washes face in $160 bln Allergan deal

November 23, 2015

The biggest inversion ever will bring hefty tax and cost savings worth slightly more than the $30 bln premium on offer. Snag is, the structure will upset U.S. authorities. And slamming two drug giants together often creates dis-synergies in the labs.

Pfizer’s $150 bln plan is high-risk, low-benefit

November 19, 2015

Buying Allergan would give the drug giant a low-tax domicile in Ireland and one good drug, Botox. At the reported price, Allergan would accrue nearly all of the obvious upside. Pfizer would be left with a possible integration hangover – and tax savings that might disappear.

Rail deal needs more than $28 bln to stay on track

November 18, 2015

Canadian Pacific justifies its hostile bid for Norfolk Southern by touting cost savings worth over $12 billion. But CP shareholders will keep $5 billion of that amount for themselves. Given antitrust risks, a higher offer will be necessary to bring this merger into the station.

Chancellor: The illusion of debt-fuelled earnings

By Edward Chancellor
November 18, 2015

Low borrowing costs enabled acquisitive drugmaker Valeant to ratchet up EPS with leverage. Earlier episodes of financial engineering - like Japan’s zaitech and the 1960s conglomerate boom - came unstuck after rates rose and stocks fell. It won’t be any different this time.

Air Liquide’s bid for Airgas leaves value vacuum

November 18, 2015

The French gas company’s $13.4 billion acquisition melds two complementary businesses – the larger Air Liquide supplies mainly big customers; its U.S. rival serves smaller outfits. Yet unless the buyer can superheat the synergies, the deal will leave its shareholders worse off.

Heads won’t roll at Mylan despite blunders

November 13, 2015

Rather than take a $40 bln-plus offer from Teva, the drug firm pursued Perrigo, whose owners rejected the bid on Friday. The vote was partly against Mylan’s poor governance – which also makes it unusually hard for its own shareholders to turf out inept executives and directors.

China catalyst could spark Syngenta chain reaction

November 13, 2015

The Swiss pesticides group has rejected a $42 bln bid approach from China National Chemical Corp, reports say. Interest from rival Monsanto was rebuffed earlier this year, and last month the Syngenta CEO stepped down. It looks vulnerable to a round of chemical re-engineering.