By Taryn Cooper, at 11:58 am on November 26th, 2008
Deutsche Bank analyst Barbara Ryan suggests that due to rising costs and conservative regulation in the drug market, we may see an uptick in pharmaceutical mergers in the next year or so to drive some of the newest merger trends. That’s not at all surprising — in this volatile market, the only constant is healthcare, and pharmaceuticals are pretty “recession-proof” as they come. But what will that mean for the economy in general? Back in 2002, Pfizer acquired Pharmacia, which was hailed as the largest purchase that year. 2002 marked the lowest turn in merger volumes since the “tech bubble” burst. However, a year and change later, Wellpoint and Anthem announced their merger and Bank of America agreed to buy FleetBoston, creating the largest domestic banking chain. Point being – if we see consolidation in the healthcare market, perhaps after we’ll see some positivity in the markets leading to more consolidations and sales in the next trend.
By Taryn Cooper, at 11:52 am on November 26th, 2008
For well over a year now, BHP Billiton has been courting one Rio Tinto, to the tune of a $66 billion in cash-and-stock. Yesterday, BHP pulled its offer, citing the ever famous “market conditions,” not to mention that Rio has depleted in value since the bid was announced. Now? Markets have not reacted favorably to the deal being called off (which was one of the largest of all time and possibly a future bright spot in the now-dormant merger industry), and Rio may have to sell assets now in order to recoup its losses. While BHP pursued Rio heavily (and Rio kept denying), what’s worse – BHP losing face, or Rio losing so much value? My guess? Don’t be surprised if Alcan gets spun off or sold eventually…
By Robert Perrego, at 9:03 am on November 26th, 2008
Obama claims he is going to ‘JOLT’ the economy with a massive spending package. I am dying to see how this is going to work out and I am getting a bit scared and here is why…
You know that little thing called the TARP? You may have heard of it – just a small program pumping $700 billion into the economy.
Oh yeah – then the Fed only injected about another $1+ trillion or so into the money markets.
Then someone gave AIG another $35 billion over and above the $85 billion we already gave them and we tossed Citibank a cool $30 billion with another $290 billion guaranteed in the future.
And then, just yesterday, The Fed decided to inject another $800 billion into the system. No one knows where this $800 billion came from, no one voted on it and I was under the impression that if you started a new spending program over $799 billion someone had to sign off on it somewhere and the worst part (not really) is it did not get a cool new name like ‘TARP‘ or ‘Warf’ or ‘Chewbacca’, but lets not lose sight of the fact that this is a lot of money.
So this leads me to ask – just how much is this JOLT going to cost us? So far we are down $2.65+ trillion and Obama has something more that is going to JOLT us?
If he pops out something that actually does JOLT us – this thing is going to have to be massive – as in multiple trillions to have a relative impact greater than the last $2 to 3 trillion or so.
I dont know about you – but I am starting to get a bit scared.
By Mark Pason, at 7:22 am on November 26th, 2008
This is an opportunity for those not faint of heart. This morning, KPMG this stated that there is no way that Bell Canada can service the $33bb of debt they need to take the company private. Bell Canada, of course, is very dissapointed in the news. Citigroup, Deutsche Bank, RBS and TD Bank are happier than pigs in s**t, because they may be off the hook, no longer forced to loan the funds to Bell Canada. The original deal was for C$42.75 ($32.80 US) in cold cash. NYSE: BCE (Bell Canada) is hovering around $19.00 in premarket trading.
Chances are very good that BCE will not get bought for the original price of $32.80 per share. However, the current price of $19.00 per share creates a compelling buying opportunity. Stay tuned!
By Mark Pason, at 7:32 am on November 25th, 2008
Today’s New York Post makes a strong point to replace the Board at Citigroup. Enough is enough. This situation did not happen overnight. It was a car crash that started months ago. Dick Bove and Meredith Whitney have been pounding the table about Citi for a long time. There were no surprises here.
Sell off Smith Barney and bring in someone like Vernon Hill, the founder of Commerce Bancorp, to run retail banking. As Hill said. . .“While the conventional wisdom says Citi is too big to fail, the reality is it’s too big to manage.”
