|To: richardred who wrote (2462)||12/15/2010 11:21:29 AM|
|Novartis Buys Rest of Alcon for $12.9 Billion|
By GORAN MIJUK, JEANNE WHALEN And DANA CIMILLUCA
ZURICH—Novartis AG Wednesday paved the way to take full ownership of Alcon Inc. after sweetening its original share offer with a cash component, ending a drawn-out battle to acquire the remaining 23% of the U.S. eye-care company in a deal worth $12.9 billion.
The full acquisition—intended to help Novartis capitalize on an eye-care market that is expected to grow faster than pharmaceuticals in coming years—will now cost Novartis about $51.6 billion, making it Switzerland's biggest takeover so far and one of the biggest ever in the industry.
Under the new agreement, Novartis will guarantee minority shareholders $168 per share. The number of Novartis shares it's offering hasn't changed, and still stands at 2.8. When the offer to the public shareholders was made at the beginning of the year, it was valued at about $153 per share, but Novartis stock has risen since then. The new $168-a-share offer equals the average of what Novartis previously paid Nestle SA for two chunks of Alcon totaling 77% of the company. Novartis paid Nestle $38.7 billion in total.
Novartis said it will add cash if necessary to guarantee a value of $168 per share should its stock drop. If the value of 2.8 Novartis shares is more than $168, then the number of Novartis shares will be reduced accordingly. When Novartis made its initial bid to minority shareholders, they rejected it as too low.
Minority shareholders meanwhile pressed Novartis to provide them with some sort of cash buffer that would help shield them if Novartis's share price were to fall in value.
Alcon's independent board of directors, which backs the new deal, had previously threatened possible litigation and had opened a $50 million trust to finance potential lawsuits.
"With this step Novartis takes full ownership, becoming the global leader in eye care, a rapidly expanding, innovative platform based on the growing needs of an aging population," Novartis chairman Daniel Vasella said in a statement.
The full buyout reflects Novartis's drive to broaden its product portfolio and help it tap the growing eye-care market. Alcon's inclusion will add about $6.5 billion in additional sales to Novartis, which last year had revenue of about $44 billion. The buyout should also help the Swiss company mitigate a steep sales drop from lost patent protection for its two biggest medicines, heart drug Diovan and cancer drug Glivec.
Novartis predicts that fully acquiring Alcon will help it create annual synergies of about $300 million, up from $200 million that would have resulted from a partial acquisition. Also, owning only 77% of the company would have forced it to run Alcon at arm's length.
Novartis shares traded 6.6% higher in Zurich on Wednesday, up 3.20 Swiss francs at 56.80 francs—still valuing the stock portion of the bid at marginally below the guaranteed value. Shares of Alcon had closed at $162.43 on the New York Stock Exchange Tuesday and are likely to move toward $168 on Wednesday.
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|From: richardred||12/15/2010 1:04:31 PM|
|ETFs to Play Biotech M&A|
By Kevin Grewal, Contributor 12/15/10 - 11:40 AM EST
This activity has been fueled by cash-heavy companies looking to diversify and broaden their horizons.
To put this into perspective, in just two days, nearly $3.1 billion in biotech-related deals were announced, and some suggest more activity is to come.
Big Pharma front-runners such as Pfizer(PFE_), Sanofi-Aventis(SNE_), Amgen(AMGN_) and Merck(MRK_) are expected to find themselves in something of a rut because of expiring patents and lackluster drug pipelines.
As a result, Big Pharma is likely to look at smaller, more nimble companies that are focusing on specific treatments and medical specialties.
Some ETFs that are likely to be influenced by this increased activity include:
* SPDR S&P Biotech ETF, which allocates nearly 51.5% of its assets to small-cap companies and 30.75% to medium-cap companies, which are the most susceptible to M&A activity.
* iShares Nasdaq Biotechnology ETF, which tracks big players like Amgen as well as small and mid-cap stocks that are prime targets for M&A.
* Biotech HOLDRs, which predominantly allocates its holdings to large-cap companies such as Amgen, Gilead Sciences(GILD_) and Biogen Idec Inc(BIIB_). These are the likely acquirers in the sector.
* iShares Dow Jones US Pharmaceuticals, which includes drug giants Pfizer and Merck among its top holdings.
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|To: richardred who wrote (2296)||12/21/2010 10:56:09 AM|
|I Hit the Takeover bullseye today with MATK-Entered at 20.60-in July-Nice weighted position for me also. :+ )|
DSM to buy US biotech company Martek for $1.09B
Martek Biosciences accepts $1.09 billion cash bid from Dutch chemicals maker DSM
On Tuesday December 21, 2010, 10:09 am
AMSTERDAM (AP) -- Royal DSM NV, the world's biggest maker of vitamins, said Tuesday it will bid $1.09 billion (euro830 million) in cash for U.S. biotech firm Martek Biosciences Corp., in a management-endorsed buyout that would improve its presence on the American infant formula market.
The Dutch chemicals company's $31.50 per share offer for Martek represents a 35 percent premium to Martek's closing price on Dec. 20. In U.S. premarket trading, Martek shares surged $8.04, or 34.4 percent, to $31.40.
DSM, based in Heerlen, the Netherlands, makes nutritional supplements, fibers used in bulletproof vests, and ingredients used in vaccines, as well as industrial chemicals.
DSM's CEO Feike Sijbesma said the purchase "will add a new growth platform to our nutrition business," while Martek would benefit from DSM's larger distribution network.
Martek, based in Colombia, Maryland, sells nutritional oils, ingredients for infant formula and dietary supplements. Its customers include Danone, Nestle, Kellogg's and General Mills, among others.
DSM said its offer will begin in mid-January and is conditional on receiving a majority of shares. It expects the deal to close sometime in the second quarter.
DSM said the deal, which must also be approved by regulators, would add at least euro0.15 to annual per share earnings in the first year.
Shares in DSM rose 4.5 percent to euro42.845 in Amsterdam.
In November, DSM reported a third quarter net profit of euro79 million, or euro0.76 per share, on sales of euro2.15 billion. As of Tuesday, the company has a stockpile of more than euro2 billion in cash due to profits and recent sales of several low-margin businesses.
Martek earlier this month reported a fiscal fourth-quarter loss of $6.2 million on higher costs and a hefty restructuring charge linked to the sale of assets at its Winchester, Ky., manufacturing facility. Revenue rose 36 percent to $119.1 million, on higher sales of nutritional ingredients and branded consumer health products. The results topped analysts' average estimates.
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|To: richardred who wrote (2317)||12/21/2010 1:26:24 PM|
|MMI continues to press hard. |
MMI Investments, L.P. Calls on EMS Technologies Board to Pursue a Sale of the Company
Press Release Source: MMI Investments, L.P. On Monday December 20, 2010, 9:15 am EST
NEW YORK, Dec. 20, 2010 /PRNewswire/ -- MMI Investments, L.P., one of the largest stockholders of EMS Technologies (Nasdaq:ELMG - News), announced today that it has sent a letter to the Board of Directors of EMS in which MMI argues that a sale of the company would deliver substantially greater value to shareholders than its present stock price with considerably less risk than management's current operating plan.
The full text of the letter follows:
December 20, 2010
The Board of Directors
c/o William S. Jacobs, Secretary
EMS Technologies, Inc.
660 Engineering Drive
Norcross, Georgia 30092
Dear Members of the Board,
During the four weeks since our meeting with Chairman Mowell, Director Bolton and members of senior management, we have spent considerable time and effort reviewing our analysis of EMS Technologies, Inc. ("EMS"). We have reaffirmed our conclusion that despite EMS' subscale and disjointed operations and its poor financial and stock price performance over the long-term, it remains a highly valuable franchise with assets that should be monetized through a sale of the company at a value substantially higher than its present stock price. We have furthermore reconfirmed our conclusion that such an outcome could be achieved with considerably less risk than management's operating plan, which even if successful could take several years to fully implement and still not generate a higher nominal value.
We have also reflected on Chairman Mowell's and Director Bolton's resolute confidence in EMS' historical execution and future strategy. We believe an accurate appraisal of EMS' track record and proper risk assessment of its outlook is wholly incompatible with this version of the past and vision of the future.
We could not have demonstrated this disconnect any clearer than was done by Chairman Mowell's own letter to us of November 8th, and management's recently released presentation to stockholders. We believe it is disingenuous to boast of the stock's performance since the day you had to replace your CEO because the company had just lost its largest contract, reported disastrous earnings and lowered its full-year EPS forecast by 35%, causing the stock price to plummet by 40% from the month prior. I can assure you your stockholders know all too well that 40% up after 40% down means you've still lost value.
Long-term performance matters to investors. Allow us to cite other stock price return statistics that we believe more accurately illustrate the long-term trend in EMS' performance:
EMS' stock return in the last 15 months (from prior to the disclosure of 3Q09 earnings, reduced guidance and the loss of the B2 contract);
EMS' stock return for the last two years;
EMS' stock return for the last three years;
EMS' stock return for the last four years;
EMS' stock return for the last five years;
EMS' average underperformance relative to the S&P 500 over these time periods; and
EMS' average underperformance relative to the Russell 2000 over these time periods.
This record is consistently poor, and I note it merely covers the last five years of the Board's eight year average tenure, Chairman Mowell's ten years as Chairman and his 27 years as a director. Still, the Board's position, as we understand from the new investor presentation, is that investors should trust management and the Board to create stockholder value by executing a "stay-the-course" strategy. This is despite the fact that investors who have trusted EMS with their capital have been punished consistently over many years, and that EMS continues to be highly undervalued relative to its peers and precedent transactions despite the new strategies and products described in the investor presentation.
Instead of staying-the-course and expecting a different result, EMS should explore a sale of the company – an effort that according to the investor presentation "would deprive EMS shareholders of significant future value." If the strategies you have implemented and products you have developed are indeed so valuable, a competitive sale process to knowledgeable potential acquirors would in our view be virtually certain to monetize them in a way the public markets have not over so many years. Moreover, we believe such an outcome could be achieved promptly and generate significantly higher value without the time and operational risk of maintaining the status quo (not to mention the risks of a declining US defense budget). On a risk-adjusted basis, considering EMS' track record, we believe there is no comparison.
Importantly, an EMS strategic alternatives review process at this time would also benefit from a robust mergers and acquisitions market – a window of opportunity that is unlikely to remain open forever. This highly conducive environment coupled with EMS' attractive, undervalued assets provide the Board with an excellent opportunity to achieve an optimal outcome for stockholders. We strongly urge the Board to seize it. As always, we remain available to you for further discussion of these issues.
Clay B. Lifflander
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