Friday, 13 January 2012

Mergers & Acquisitions - Week Ending 01/13/12

On the weekend, it was announced that Bristol-Meyers Squibb would buy Inhibitex, a hepatitis C treatment provider, for $2.5 billion in an all-cash deal. This is the latest in a string of niche deals by drug companies attempting to compensate for losses due to their generic counterparts. On Monday, Inhibitex was boosted a massive 140% trailing the huge premium offered, while the pharmacutical giant was down 0.9%. The midweek saw Apple confirmed its purchase of Anobit, which manufactures the flash memory found in several of its product lines. The price tag is believed to be in the range of $500 million; should this be the case, it would be Apple's largest acquisition to date. The tech giant was down 0.2%. Also that day, Raymond James bought fellow broker Morgan Keegan from Regions Financial for $930 million. Regions is expected to use the proceeds to pay back its 2008 government bailout; it is the only major lender who is yet to do so. The bidder was relatively unchanged as the vendor saw a 2.1% increase.

On Friday, Lions Gate Entertainment took over Summit Entertainment in a deal worth $412 million. Despite the move strengthening Lions Gate's film library and home entertainment lines, they dropped 1.3%. Also that day, Carl Icahn acquired a 14.5 percent stake in CVR Energy for $115 million. The prolific investor believes that shares in the petroleum refiner are undervalued. Although shares had risen 3.6% by the bell, management reacted defensively, saying that a shareholder rights plan would be triggered if Icahn increased his holdings further.