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-Allergan to throw down tax-reform gauntlet

November 23, 2015

The drug firms are shrugging off Uncle Sam’s latest attempt to prevent mergers predicated on relocating to low-tax jurisdictions. The largest-ever inversion, at some $150 bln, ought to raise pressure on lawmakers to find more comprehensive fixes to the great M&A tax dodge.

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.

Valeant CEO gets called on $100 mln excess

November 6, 2015

Paying bosses in equity nudges them to serve shareholder interests. The pharma giant went to extremes, allowing chief Michael Pearson to borrow heavily against his shares. The tumbling stock forced him to repay the debt - an example of how skewed incentives have rocked Valeant.

Bill Ackman pushes limits of activism at Valeant

November 5, 2015

The hedge fund boss hinted the drugmaker’s CEO may need to go and was invited into the boardroom mid-crisis, according to a newspaper report. Ackman also seems to have usurped Valeant’s defense. The $55 bln of quickly lost market value suggests his involvement isn’t helping much.

Shire pays up for easier prey than Baxalta

November 2, 2015

The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.

Merger Monday has a scary Halloween afterglow

November 2, 2015

At least six corporate buyers unmasked acquisitions of $1 bln or more to sustain the freakish pace of M&A. Some of them, including Visa’s, are tricky, while others like Shire’s treat sellers to rich prices. The zombie-like deal march is causing investors to take fright.

Ackman’s Valeant defense nervy but unpersuasive

October 30, 2015

The hedge fund founder says the drug firm is a victim of bad PR, naive investors and jealous rivals. He even likened his stake to Warren Buffett’s savvy investment in lenders cheated by a 1960s salad-oil scandal. The reality is Valeant is flawed in ways a “pep talk” won’t fix.

Pfizer may overdose on quick and complex deals

October 29, 2015

The drug giant is in talks to buy Allergan and seems likely to split the merged firm. It is moving briskly to take advantage of low share prices and tax benefits that could vanish with a new Congress. Speed can prompt missteps, though, as the pharma giant knows only too well.