(BN) Mylan Chairman Said to Consider Perrigo Sweeteners to Make Deal


BFW 05/11 22:58 Mylan Chairman Said to Consider Perrigo Sweeteners to Make Deal
Mylan Chairman Said to Consider Perrigo Sweeteners to Make Deal
2015-05-11 22:54:00.127 GMT


By Cynthia Koons and Jeffrey McCracken
(Bloomberg) -- Mylan NV’s chairman told investors he may
sweeten the company’s cash-and-stock offer for Perrigo Co. by
adding terms to reduce the risk to its shareholders, said people
who recently met with him.
In private meetings with investors, Mylan Executive
Chairman Robert Coury was adamant that Mylan won’t be bought by
Teva Pharmaceutical Industries Ltd., which has made an
unsolicited bid for Mylan. Teva’s offer for Mylan is contingent
on Mylan dropping its bid for Perrigo.
Instead, Coury laid out other scenarios that could play
out, according to the people, who asked not to be named because
the meetings were private. In one possibility, Coury suggested a
Mylan-Perrigo combination would be an attractive future target
for Pfizer Inc., and that Pfizer could use a deal to move its
legal address abroad and lower its tax rate.
Perrigo has rejected Mylan’s most recent offer of $75 in
cash and 2.3 Mylan shares for each Perrigo share. Coury said
Mylan could add payments to Perrigo in the event a deal fell
apart, or include other sweeteners to reduce the risk to Perrigo
shareholders, said the people.
Mylan spokeswoman Nina Devlin declined to comment on the
meetings. Representatives for Teva and Perrigo didn’t
immediately respond to requests for comment, and Pfizer declined
to comment.
Mylan, a generic drugmaker, has made two unsolicited
takeover overtures for Perrigo, which generates about half of
its sales from consumer health-care products. Perrigo has
rejected those offers.
Teva, meanwhile, has made a $40.1 billion offer to buy
Mylan. Mylan has rejected that as well, calling it a bad
cultural fit that couldn’t get cleared by U.S. antitrust
regulators.

Why Not Novartis

At the meetings with investors, Coury also brought up the
idea that Mylan could eventually make a deal with Novartis AG’s
generic business Sandoz, the people said. One possibility raised
was Mylan buying Sandoz in exchange for a stock stake in Mylan,
said one of the people.
Novartis declined to comment.
Mylan’s rejections of Teva have been firm. In a public
letter on April 27, Mylan said Teva’s opening offer of $82 a
share “grossly undervalues” the company and that the Israeli
drugmaker shouldn’t even bother coming back until it’s prepared
to pay “significantly in excess of $100 per share.”
Teva responded with a letter of its own, asking Coury to
quit the “mudslinging.”


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To contact the reporters on this story:
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jmccracken3@bloomberg.net
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Drew Armstrong

(BFW) Pall Said Near Deal to Sell Near Valuation of $10b: WSJ


BFW 05/11 22:01 *PALL SAID NEAR DEAL TO SELL NEAR VALUATION OF $10B: WSJ
Pall Said Near Deal to Sell Near Valuation of $10b: WSJ
2015-05-11 22:04:26.769 GMT


By Theo Mullen
(Bloomberg) -- Danaher and Thermo Fisher Scientific are
said to be vying for Pall, with final bids due later this week,
WSJ said, citing people familiar.
* Price couldn’t immediately be learned and the talks may not
lead to a deal: WSJ
Story: http://on.wsj.com/1dY9ZkG
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tmullen11@bloomberg.net

>>> US Close Dow-0,47% S&P-0,51% Nasdaq-0,20% Russell+0,07%


Stock Market Slumps as Long-term Rates Jump

The stock market followed up Friday's broad-based rally with an outing on Monday that never got on track due to a variety of reasons:
  • Technical resistance
    • The S&P 500 got brushed back early following a test of its closing high for the year (2117.69)
  • Rising long-term rates with the yield on the 10-yr note hitting new highs for the year at 2.27% and the 30-yr bond yield jumping 13 basis points to 3.03%
    • Selling was steady all day and unwound all of Friday's post-employment report gains
  • A particularly weak showing from the energy sector (-2.1%), which failed to get on track after news reports indicated OPEC expects oil prices to stay below $100 for the next decade
  • Concerns about the state of China's economy after the People's Bank of China announced an interest rate cut for the third time in the last six months
    • Main lending rate was lowered 25 basis points to 5.10%
    • Deposit rate was reduced 25 basis points to 2.25%
  • Ongoing angst about Greece's ability to win access to the next bailout tranche
  • Relative weakness in Apple (AAPL 126.32, -1.30, -1.0%); and
  • A lack of leadership in general
    • Every sector finished lower
    • The energy sector was the only sector to lose more than 1.0%
By and large, the lack of follow through after testing the all-time closing high took the wind out of the market early and then the market trended steadily lower as long-term rates crept steadily higher.

The Dow Jones Industrial Average (-0.5%), Nasdaq Composite (-0.2%), and S&P 500 (-0.5%) all ended the day in red figures.  The Russell 2000 (+0.2%) finished off its highs for the day, but still managed to close the session higher.

There wasn't any economic data of note out of the U.S. today, yet things will get more interesting on that front later in the week with the release of the April Retail Sales report on Wednesday, the April Producer Price Index on Thursday, and the April Industrial Production report on Friday.

On a related note, San Francisco Fed President Williams (an FOMC voter) told CNBC that he believes the first quarter weakness was an anomaly and that he expects the economy to rebound.  That didn't help sentiment at the front of the Treasury curve either as the yield on the 2-yr note jumped four basis points to 0.62%.

The three major indices ended the day with a whimper, finishing at or near their lows for the session.  After falling 15% on Friday, the CBOE Volatility Index increased 7.3% on Monday

Trading volume was light with just 680 million shares changing hands at the NYSE.  That was approximately 14% below the volume seen in Friday's rally effort.

>>> Rosetta held sale talks with multiple suitors, source says

Deal Reporter

Rosetta held sale talks with multiple suitors, source says

Rosetta Resources (NASDAQ:ROSE) held discreet discussions with fewer than five parties before agreeing to a deal with Noble Energy (NYSE:NBL), a source familiar with the situation said.

The Houston-based energy group reached out to the most logical suitors with stronger financial profiles six to eight weeks ago to assess their interest and explore the kinds of strategic alternatives that would be possible with commodity prices depressed, the source said.

On Monday Energy announced plans to acquire Rosetta Resources, an E&P company focused on the Eagle Ford and Permian Basin, in an all-stock transaction valued at USD 2.1bn, plus the assumption of USD 1.8bn in net debt.

The source familiar said that over the past one-and-a-half weeks conversations about a possible transaction intensified with two parties including Noble. The source declined to name the other suitors.

No financial sponsors or sponsor-backed strategics were talked to. The source described companies that showed interest in Rosetta as being “much larger investment grade companies”.

For Rosetta, the source familiar said, the impetus to seek alternatives was to ascertain how the company could accelerate its drilling plan in the event commodity prices started to rise.

With an investment grade company like Noble, Rosetta will be better equipped to execute on its growth plan, and therefore, a stock deal was an important consideration for the target. A high grade company would help Rosetta “draw capital fast” to build its asset base, the source explained.

A stock deal is the way for a seller to retain the upside of its proved undeveloped reserves (PUDs), since in this commodity price environment, buyers want to pay for proved-developed-producing (PDP) reserves, but are less willing to pay for PUDs, said an industry banker.

A seller like Rosetta - and its shareholders - will potentially get more out of a deal if the buyer's balance sheet is put to work post-acquisition turning the PUDs into PDPs, rather than paying cash to the seller, the same banker explained. However, because the buyer and seller will be sharing in the upside of both parties' assets, the quality of both sets of assets is important.

Rosetta's liquids-rich asset base includes approximately 50,000 net acres in the Eagle Ford Shale and 56,000 net acres in the Permian. Noble Energy has identified in excess of 1,800 gross horizontal drilling locations for development, providing net unrisked resource potential of approximately one billion barrels of oil equivalent, the company said in a release.

Rosetta's assets produced 66,000 barrels of oil equivalent per day in 1Q15, and year-end 2014 proved reserves were 282m barrels of oil equivalent. More than 60% of Rosetta's current production and proved reserves are liquids, the release added.

The source said chances of an interloper emerging is quite low given the premium and the board’s preference for an all-stock deal. The industry banker agreed that a rival bid was unlikely given this structure.

Under the agreement, Rosetta shareholders will receive 0.542 of a share of Noble Energy stock for each share of Rosetta stock held. Based on the Noble Energy closing price on 8 May, the transaction has an implied value to Rosetta shareholders of USD 26.62 per share. Noble declined 6% on the announcement on Monday.

The source said the merger agreement will be filed within a couple of days and the proxy will be filed over next couple of weeks. The transaction is expected to close in 3Q15.

Petrie Partners Securities acted as exclusive financial advisor to Noble Energy. Skadden, Arps, Slate, Meagher & Flom, LLP acted as legal advisor to Noble Energy. Morgan Stanley acted as exclusive financial advisor to Rosetta. Latham & Watkins LLP acted as legal advisor to Rosetta.

(BFW) Glaxo CEO Sees ‘Stretched’ Valuations in Pharmaceutical M&A: FT

Glaxo CEO Sees ‘Stretched’ Valuations in Pharmaceutical M&A: FT
2015-05-11 19:39:20.316 GMT


By Jim Silver
(Bloomberg) -- Low interest rates cause “a discipline
reduction,” increasing “the probability of people making poor
choices,” CEO Andrew Witty says in interview, according to FT.

* “Some of these valuations look stretched,” Witty says
* Witty declines to cite specific deals as examples
* Glaxo won’t “get drawn into the idea that just because
money is cheap we can do anything”
* Story link


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jsilver@bloomberg.net
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Robin Stringer

>>> Eurogroup Statement: Welcome progress achieved in negotiations with Greece;

Eurogroup Statement: Welcome progress achieved in negotiations with Greece; Feb 20th agreement remains framework for ongoing discussions 
- Greece to complete review in a timely fashion

- Eurogroup's Dijsselbloem: Negotiations were advanced today, more time needed for a comprehensive agreement
- EU cannot keep relying on lower oil prices and QE
- There is no basis to discuss a third bailout program for Greece yet; have to finish the second program first
- Could provide Greece with partial disbursements in exchange for partial implementation of programs
- Referendum choice is up to Greece, but a referendum could delay implementation and disbursements
- there was no detailed discussion about Greece liquidity, it is obvious their liquidity situation is becoming more difficult

- EU's Moscovici: There is a new spirit in the Greece talks, major focus of disagreement is pensions

- Greece Fin Min Varoufakis: There has been a large convergence in talks with creditors, there was a positive atmosphere
- We are getting closer to an agreement

>>> Eurogroup Statement: Welcome progress achieved in negotiations with Greece;

Eurogroup Statement: Welcome progress achieved in negotiations with Greece; Feb 20th agreement remains framework for ongoing discussions 

- Greece to complete review in a timely fashion
- Eurogroup's Dijsselbloem: Negotiations were advanced today, more time needed for a comprehensive agreement
- EU cannot keep relying on lower oil prices and QE
- EU's Moscovici: There is a new spirit in the Greece talks, major focus of disagreement is pensions

>>> Reportedly Russia proposes that Greece join as 6th member of new development

Reportedly Russia proposes that Greece join as 6th member of new development bank being established by the BRICS nations - press 
- Russian official says that deputy Fin Min Storchak proposed the idea to Greece PM Tsipras in a meeting today. Tsipras said he was interested in discussing it further at a BRICS (Brazil, Russia, India, China, South Africa) economic summit in Russia in mid-June