(BFW) Syngenta, Monsanto Reviving Talks ‘Unsurprising’: Morgan Stanley

Syngenta, Monsanto Reviving Talks ‘Unsurprising’: Morgan Stanley
2015-05-01 08:43:26.568 GMT


By Chiara Remondini
(Bloomberg) -- Morgan Stanley says “unsurprising” that
M&A speculation has come up again as Syngenta is facing
operating pressure from adverse FX, weak vols., according to
note.
* Brokerage (equalweight on Syngenta) notes Syngenta shrs
underperformed EU chemicals, MON by ~30% since start of 2013
* N. America, LatAm herbicide mkt would be key area where
combined mkt shares would likely exceed ~50% in Crop
Protection; main overlap in Seeds would be in N. America
given Monsanto’s dominance in region
* N. America, LatAm herbicide mkt would be key area where
combined mkt shares would likely exceed ~50% in Crop
Protection; main overlap in Seeds would be in N. America
given Monsanto’s dominance in region</li></ul>
* Bloomberg Intelligence says Monsanto would need to issue
more equity vs 2014 to stay within stated net leverage limit
of 1.5x
* Monsanto’s debt capacity has declined due to $5.7b of
debt issuance in last yr to fund a $10b shr buyback
program
* Monsanto’s debt capacity has declined due to $5.7b of
debt issuance in last yr to fund a $10b shr buyback
program</li></ul>
* NOTE yday: Monsanto is said to approach Syngenta again about
a takeover, almost a year after a previous attempt fell
apart
* NOTE April 17: Syngenta 1Q sales missed ests., repeated 2015
outlook

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Gaurav Panchal

(Reuters) Exclusive: Pfizer is mystery bidder for rare disease drugmaker Sobi

(Reuters) - Pfizer Inc (PFE.N) is the mystery bidder for Swedish Orphan Biovitrum AB (SOBIV.ST), the rare disease specialist which disclosed this week that a potential buyer had made a preliminary offer, people with knowledge of the situation said.

The Swedish company, known as Sobi, has a market value of 35.8 billion Swedish crowns ($4.3 billion). Its medicines for rare or "orphan" conditions make it a target in a consolidating sector in which large, cash-rich drugmakers seek to bolster their portfolios with offerings from smaller biotech firms.

Sobi did not identify its potential acquirer when it revealed on Monday that it had received an approach, but Biogen (BIIB.O) and Pfizer (PFE.N) were viewed by analysts as the most likely bidders, as they already have partnership deals with Sobi.

The sources asked not to be identified because the negotiations are confidential. The price that Pfizer has offered could not be learned. Spokesmen for both Sobi and Pfizer declined to comment.

Pfizer Chief Executive Ian Read said on Tuesday during an earnings call that he was open to deals and was "agnostic" about the size of acquisitions.

Read added that current valuations in the biotech sector were "buoyant", meaning Pfizer's business development team would be very careful as it evaluated opportunities.

Sobi manufacturers a hemophilia treatment called ReFactor AF, which Pfizer sells. On Wednesday, Sobi postponed its annual shareholder meeting, which was scheduled for May 6, in the wake of the takeover proposal.

Pfizer has actively been looking at takeover targets after an attempt to buy AstraZeneca Plc (AZN.L) failed last year. The company agreed to acquire Hospira Inc for $15 billion in February.

Pfizer has established a Rare Disease Research Unit since it sees drugs for rare diseases, which can command very high prices, as an important opportunity in its mix of businesses.

Recent deals involving rare disease companies include Teva Pharmaceutical Industries Inc's (TEVA.TA) acquisition of Auspex Pharmaceuticals for $3.5 billion in March, Shire Plc's (SHP.L) acquisition of NPS Pharmaceuticals for $5.2 billion in January and BioMarin Pharmaceutical Inc's (BMRN.O) acquisition of Prosensa Holding NV for $840 million last November.

>>> Royal Dutch Shell interested in acquiring deep water oil assets Petrobras ma

Royal Dutch Shell interested in acquiring deep water oil assets Petrobras may sell
Royal Dutch Shell would be interested in acquiring any deep-water oil fields Petrobras may sell, Shell's CEO said in a conference call on Wednesday, reporting the Dutch giant's quarterly results.

If Shell's purchase of UK oil company BG Group goes through, Shell would be the largest oil company in Brazil.

"If you look at the exposure that the combined company will have by the end of the decade to Brazil, it's going to be of course significantly higher than what we have today but in my mind it is going to be low enough for us to have appetite for more, especially considering again the tremendous attractiveness that sits in that resource base," said Chief Executive Officer Ben van Beurden in a transcript of the conference call.

"We have indeed things worth to be offered up in Brazil, in areas that [we] understand, we would only look at it with keen interest but of course it would have to be of the right value for us to consider it," said van Beurden.

NY Post : Intel kicking tires on buying chipmaker Altera

The possibility of Intel spending up to $15 billion to buy chipmaker Altera is far from remote.
Altera is expected to soon resume sale talks with Intel, led by CEO Brian Krzanich, a source close to the situation said Thursday.
“Yes, they will be engaging,” the source, who has direct knowledge of the situation, said, noting the talks may begin within a few weeks.
Last month, talks between chip leader Intel and Altera ended when Intel balked at the price of around $54 a share, sources said.
Altera’s shares this week were down 12 percent, to $39.56, from their April high of $44.85. They closed Thursday at $41.68, up 2.4 percent on a day the markets were down sharply.
Since the talks collapsed, however, Altera reported disappointing earnings that could influence a new deal price, Bernstein Research Senior Analyst Stacy Rasgon told The Post.
“I wonder what the price is they would pay now,” he said.
The growing part of Intel’s business is selling chips for data center servers for about $650 each. This represents 40 percent of Intel’s profits.
But about one-third of the time, data center customers buy customized programmable chips specifically for their use — made by Altera and Xilinx.
Altera, starting in 2013, paid Intel to make its chips.
Intel might make the acquisition to stop Altera from growing.
There has been pressure, meanwhile, from Altera shareholders to get the San Jose company back to the bargaining table.
Hedge fund TIG Advisors earlier this week publicly called on fellow Altera shareholders to vote against Altera’s lead independent director, T. Michael Nevens — who it believes opposed a deal — at the May 11 annual meeting.
The vote isn’t binding.
“It will send a strong signal to the board to immediately reengage with Intel regarding its mutually beneficial strategic acquisition offer without delay,” TIG said in a letter.
Altera’s bylaws do not give its directors much long-term protection.
Stockholders representing 20 percent of the shares can call for a special meeting four months after the May 11 annual meeting. Then a simple majority can remove the board.
Intel declined comment. Altera did not return calls.

(BFW) Total Cut to Mkt Perform at Bernstein; Sees More Value Elsewhere

Total Cut to Mkt Perform at Bernstein; Sees More Value Elsewhere
2015-05-01 07:45:33.35 GMT


By Benjamin Dow
(Bloomberg) --Total cut to mkt perform by Bernstein, PT
EU52 left intact, as “underdog crosses the valuation finish
line” after 1Q results.
* Says co.’s resilience to low prices evidenced in 1Q results
as cash flow from ops fell 19% vs 53% drop in avg liquids
realized prices; says sees “same if not more qualities in
the new Shell”
* Broker raises PT on Eni (outperform) by 11% to EU20
* Broker raises PT on Eni (outperform) by 11% to EU20</li></ul>
* JPMorgan says in separate note that Total, OMV have some
valuation risk from investments made during times of peak
oil price, costs that may depress project returns for years
* Says costs defined by sunk capital for integrated oil
cos. “very hard to dislodge from P&Ls and balance
sheets”
* Before oil price drop, “work in progress” capital was
cited by some for having attractive upside once projects
commissioned, assuming that projects would sell into
$100/bbl environment
* Total’s upstream assets bear above-average cost
inflation risk; notes that co. took another $1.1b in
impairments after $6.5b taken in 4Q
* OMV is at risk of value decline after strong YTD
performance, given co.’s “relatively aggressive”
upstream spend pattern at top of cost, price cycle
* OMV is at risk of value decline after strong YTD
performance, given co.’s “relatively aggressive”
upstream spend pattern at top of cost, price cycle</li></ul>
* NOTE Earnings: Eni 1Q Adj. Net EU648m vs Est. EU446.2m;
Total 1Q Adj. Net Beats Est.; Div. Matches Forecast
Shell 1Q CCS Net $3.2b vs Est. $2.48b; Div. 47C/Share

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James Ludden

(BFW) Vernalis Says FDA Approves Tuzistra XR for Cough/Cold Treatment

--> VER +18%
RNS 05/01 07:01 [Delayed] Vernalis PLC VER FDA approves NDA for Tuzistra XR
BN 05/01 06:00 *VERNALIS VER FDA OKS NDA FOR TUZISTRA XR
Vernalis Says FDA Approves Tuzistra XR for Cough/Cold Treatment
2015-05-01 06:05:33.842 GMT


By Allison Connolly
(Bloomberg) -- Co. says Tuzistra XR is only U.S. codeine
based extended-release oral suspension cough-cold treatment.
* Co. aims to launch before 2015-2016 cough-cold season
* Webcast at 9:30am U.K. time
Link to Company News:{0886229D US <Equity> CN <GO>}
Link to Company News:{VER LN <Equity> CN <GO>}

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aconnolly4@bloomberg.net

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Allison Connolly at +44-20-3525-7043 or
aconnolly4@bloomberg.net

>>> Mylan may raise Perrigo offer but faces tough road

DEAL REPORTER

Mylan may raise Perrigo offer but faces tough road, shareholders say

Shareholder estimates Perrigo-Mylan valued in mid-60s
Perrigo cost synergies number absent in latest offer
Teva claims positive feedback on Mylan offer
Mylan (NASDAQ:MYL) will likely have to raise its offer again to get Perrigo (NYSE:PRGO) to the negotiating table, according to two Perrigo shareholders.

Mylan, which is fighting off a hostile proposal by Teva Pharmaceuticals (NYSE:TEVA), raised its unsolicited offer for the competing pharma company for the third time on 29 April, offering USD 75 in cash and 2.3 Mylan shares for each Perrigo share, up from USD 60 in cash and 2.2 Mylan shares offered on 24 April. Mylan made its first move for Perrigo on 8 April at USD 205 per share, valuing the target at USD 29bn, without specifying any cash/share split.

For its part, Mylan will probably have to persuade its own shareholders that a combination of Mylan and Perrigo creates more value than a combination with Teva, which may be a hard sell, said one of the shareholders.

A combined Mylan-Perrigo would likely have a pro-forma share valuation somewhere in the mid-60s after factoring in dilution from the new shares to be issued for the deal, according to this shareholder.

In late April, Teva offered to buy Mylan for USD 82 per share, in cash and stock, or about USD 43bn, and speculation is mounting that Teva will raise its offer to as much as USD 90 to catch Mylan investors attention.

One of the shareholders said that the question for Mylan shareholders is “why should I vote for you buying Perrigo and getting into the mid to high-60s when I could get USD 90 with Teva?”

Mylan said in its letter earlier this week a fair valuation of the company is more than USD 100 per share and Teva should provide terms that offset antitrust risks.

“Mylan’s response was predictable, and the reasons they mention in the letter are there. But that doesn't mean the deal gets scuttled or can't be done.The worse thing is that they will still get a higher offer, Teva won't be dissuaded just yet,’’ an industry banker said. He added that Mylan continues to be in a problematic situation and noted that “even if Perrigo wanted to do a deal, they have no idea if Mylan gets bought by Teva”.

In response to a bump by Teva, the second Perrigo shareholder said he could conceive the possibility of Mylan stretching its offer to USD 90 in cash and 2.4 shares for Perrigo, pointing out that Mylan appears determined not to negotiate with Teva.

“That gets you to a 35% premium to Perrigo shares before the first proposal was made,” the same shareholder explained.

But he said Mylan has a fiduciary obligation to consider the Teva offer or any other offers to protect shareholder interests. A large Mylan shareholder agreed, saying he “hopes the Mylan board thinks of us and other shareholders.”

The first shareholder said Mylan could face serious credit rating issues if it were to borrow the kind of cash needed to compete with a Teva offer. “They can’t take their leverage too high,” or ratings agencies can downgrade its debt to junk, he added. “You don’t have the flexibility to do that.”

Mylan’s credit rating is Baa3 with Moody’s and BBB- with S&P, just above non-investment grade.

An industry banker agreed, saying “Mylan is restricted. Too much leverage will not fly with their investors.”

Aside from these factors, Mylan would need a shareholder vote on any deal on the table for Perrigo, which it may not be able to win, the same banker said. The Perrigo deal was pitched on having cost-saving synergies of USD 800m in the first offer, but it did not mention the same savings in the latest offer.

The latest Mylan offer for Perrigo “is not value accretive to Mylan shareholders, generating negative returns on a net present value basis,” said Citibank analyst Liav Abraham in a note on Wednesday. “Our financial analysis and conversations with Mylan shareholders indicate a preference for a Teva-Mylan combination, which provides Mylan shareholders.”

The value of Mylan’s offer for Perrigo is contingent on an interpretation of what is the “unaffected” price of Mylan was prior to any bid speculation, the first and a second industry banker said.

There was market speculation that Mylan was going to make a transformative deal in March when its stock was trading at around USD 55. However, Mylan claims the value of the offer should be based on its closing price of USD 68.36, the first day of market reaction to its initial Perrigo proposal, making the offer valued at USD 232.23 per share.

Even though it has a higher bid on the table, Teva still faces significant obstacles to winning Mylan. Based in the Netherlands, Mylan has a poison pill in the form of a ‘stichting’ foundation that can decide whether to vote for the Teva deal. However, a source familiar with the situation said the structure of stichtings allows for only limited obstacles for Teva.

The same source claimed Teva’s proposal has received positive feedback from Mylan shareholders and the Israel-based pharma company is aware that a possible deal with Mylan will be a “long drawn out battle.”

Teva may face significant antitrust challenges in merging two major large branded and generics drugmakers. It has said the issues are surmountable with divestitures and expects a Mylan merger to generate USD 2bn in synergies.

A third industry banker said if Teva wins, the “FTC is going to be very aggressive on this deal” given that generic drug prices are rising and consolidation would be likely to speed that trend. However, he was of the view antitrust issues are not “as big as some people think they are.”

This industry banker and the Mylan shareholder said there remains a possibility that both potential mergers will fail, since Mylan is steadfast in resisting Teva and Perrigo is not inclined to deal with Mylan.

“There is a small probability that nothing happens for both of them,” the third industry banker said.

Mylan was recently trading at USD75.43, down 1.3%.