AbbVie Chases Shire, Peers May Seek M&A Overseas War Chest Use
2014-07-14 19:21:54.521 GMT
By Rachel Layne
July 14 (Bloomberg) -- Pfizer, Merck, J&J, Bristol-Myers,
and Eli Lilly have the most resources among peers available
outside the U.S. tax system to hunt for M&A targets as AbbVie
moves closer Shire takeover without counter-bidders seen, based
on data compiled by Bloomberg.
* Tax inversions add “new driver” to Global M&A. “Rather
than repatriating cash held overseas, some companies are
engaging in cross-border M&A as a way to re-invest,” Dan
Scott at Credit Suisse Investment Strategy & Research says
in note today
* Of U.S. health peers w/ >$20b in 2013 unremitted earns,
Pfizer, Merck among those looking at or attempting M&A in
past year; ABBV-Shire activity latest just as anti-tax
inversion legislation in the U.S. appears dead for 2014
* NOTE: Mylan (~$271m in 2013 unremitted earns) earlier today
said it would buy ABT assets in $5.3b transaction for
“optimized” tax structure
* ABT doesn’t plan on holding resulting 21% stake in MYL
for long-term, will use proceeds for other
“opportunities"
* Earlier, Sen. Finance Cmte Chair Wyden said more tax
inversions to create ‘‘drumbeat’’ to act
* Below is a list of ABBV peers by unremitted earnings size
along w/ buyback authorizations, qtrly div. expenses and
latest figure avail. for cash and marketable securities via
SEC filings
* NOTE: U.S.-based companies can’t use unremitted earnings
to pay for dividends or buybacks
* NOTE: Unremitted earnings is a cumulative number and
contains non-cash items including assets such as
buildings, debt securities and illiquid assets. Most
companies disclose the figure once a year in their 10-K,
filed during 1Q:
* Pfizer (PFE) latest filing cash & mktable securities $33.88b
* Unremitted earns 2013 $69b, 2012 $73b
* Buyback auth.: $10b, ~12 mos.
* Dividend qtrly expense: $1.66b
* NOTE: June 30, Goldman says Pfizer, Allergan among health
cos. that inversion would benefit
* PFE can renew talks w/AZN as soon as Aug.; new bid not
allowed before Nov.
* July 1, Leerink says Activis ‘‘good alternative" for
PFE; May 27: Pfizer ponders next move as $117b
AstraZeneca bid fails
* Merck & Co. (MRK) latest filing cash & mktable securities
$20.51b
* Unremitted earns 2013 $57.1b, 2012 $53.4b
* Buyback auth.: $15b, ~14 mos.
* Dividend qtrly expense: $1.29b
* NOTE: June 20, MRK began tender for Idenix, expires 5pm Aug.
4
* Johnson & Johnson (JNJ) latest filing cash & mktable
securities $29.39b
* Unremitted earns 2013 $50.9b, 2012 $49b
* Buyback auth.: $12.9b, ~25 mos.
* Dividend qtrly expense: $1.87b
* NOTE: July 11, JNJ may not seek big cardio, pharma M&A:
BI
* Bristol-Myers (BMY) latest filing cash & mktable securities
$10.62b
* Unremitted earns 2013 $24b, 2012 $21b
* Buyback auth.: $3b, ~24 mos.
* Dividend qtrly expense $594.72m
* Lilly (LLY) latest filing cash & mktable securities $5.21b
* Unremitted earns 2013 $23.74b, 2012 $20.98b
* Buyback auth.: $5b, 9 mos. since announcement
* Dividend qtrly expense $525.62m
* NOTE: June 11, LLY’s David Ricks Goldman conf. notes co.
still has ‘‘a lot of balance sheet capacity’’ and "wouldn’t
be afraid to use that for the right asset"
* AbbVie (ABBV) latest filing cash & mktable securities $9.1b
* Unremitted earns 2013 $21b, 2012 $19.4b
* Buyback auth.: $1.5b, 17 mos. since announcement
* Dividend qtrly expense $638m
* NOTE: Earlier, Credit Suisse analyst Vamil Divan says in
note ABBV-Shire transaction ‘‘allows access to global
cash flows in the long term”
* Mylan (MYL) latest filing cash & mktable securities $243m;
* Unremitted earnings 2013 $271m; 2012 $231m
* MYL has already looked at “a number of” additional
deals, mgmt says earlier on call
* Buyback auth.: $500m, announced ~8 mos ago; dividend
discontinued July 2007
* July 14: MYL to add ABT generic-drug unit for tax advantage
* Hospira Inc (HSP) latest filing cash & mktable securities
$677.1m
* Unremitted earns: 2013 $1.9b, 2012 $1.8b
* Buyback auth.: $1b, ~38 mos. since announcement
* Dividend qtrly expense: none
* Allergan (AGN) latest filing cash & mktable securities
$3.62b
* Unremitted earns 2013 ~$3.83b, 2012 $3.08b
* Buyback auth.: 208 mos. since announcement
* Dividend qrtly expense $14.04m
* Actavis (ACT) filing cash & mktable securities $340.2m
* Unremitted earns N/A
* Buyback last auth. $300m, announced ~113 mos. ago
* NOTE: Completed Forest Labs acquisition July 1, Furiex
July 2
* NOTE: FRX pre-acquisition latest filing cash & mktable
securities $3.32b; Unremitted earns 2014 $7.8b, 2013
$6.3b
* Perrigo (PRGO) latest filing cash & mktable securities
$617.1m
* Unremitted earns 2013, 2012 N/A
* Buyback auth.. $150m, ~28 mos. since announcement
* Dividend qtrly expense ~$14m
* Zoetis (ZTS) latest filing cash & mktable securities $506m,
buyback auth. N/A; latest qtrly div. paid $36m
* Unremitted earns N/A
* Buyback N/A
* NOTE: Cash, mktable securities, bbk, div. figures from
latest avail. SEC filings, some between quarterly earnings
periods
* NOTE: Tech, Health Care Top $1.9b Overseas Cash Pile: BI
* M&A Inversions Cut Pharma Tax Rates by Average of 775bps
* Click here for display of unremitted earnings data
* NOTE: June 26, U.S. Democrats Rep. Van Hollen, Sen. Levin
introduce bill to stop corporate inversions; June 24, Height
says Durbin’s tax bill “carrot to Levin’s stick”
* NOTE: May 21, Height says Levin bill "meaningfully alters"
current law; BI says Levin bill may drive more inversions
before law takes effect
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
--With assistance from Phil Kuntz in New York and Catherine
Larkin in Chicago.
To contact the reporter on this story:
Rachel Layne in Boston at +1-617-210-4634 or
rlayne@bloomberg.net
To contact the editors responsible for this story:
Brad Skillman at +1-212-617-2763 or
bskillman1@bloomberg.net
Gaurav Panchal
2014-07-14 19:21:54.521 GMT
By Rachel Layne
July 14 (Bloomberg) -- Pfizer, Merck, J&J, Bristol-Myers,
and Eli Lilly have the most resources among peers available
outside the U.S. tax system to hunt for M&A targets as AbbVie
moves closer Shire takeover without counter-bidders seen, based
on data compiled by Bloomberg.
* Tax inversions add “new driver” to Global M&A. “Rather
than repatriating cash held overseas, some companies are
engaging in cross-border M&A as a way to re-invest,” Dan
Scott at Credit Suisse Investment Strategy & Research says
in note today
* Of U.S. health peers w/ >$20b in 2013 unremitted earns,
Pfizer, Merck among those looking at or attempting M&A in
past year; ABBV-Shire activity latest just as anti-tax
inversion legislation in the U.S. appears dead for 2014
* NOTE: Mylan (~$271m in 2013 unremitted earns) earlier today
said it would buy ABT assets in $5.3b transaction for
“optimized” tax structure
* ABT doesn’t plan on holding resulting 21% stake in MYL
for long-term, will use proceeds for other
“opportunities"
* Earlier, Sen. Finance Cmte Chair Wyden said more tax
inversions to create ‘‘drumbeat’’ to act
* Below is a list of ABBV peers by unremitted earnings size
along w/ buyback authorizations, qtrly div. expenses and
latest figure avail. for cash and marketable securities via
SEC filings
* NOTE: U.S.-based companies can’t use unremitted earnings
to pay for dividends or buybacks
* NOTE: Unremitted earnings is a cumulative number and
contains non-cash items including assets such as
buildings, debt securities and illiquid assets. Most
companies disclose the figure once a year in their 10-K,
filed during 1Q:
* Pfizer (PFE) latest filing cash & mktable securities $33.88b
* Unremitted earns 2013 $69b, 2012 $73b
* Buyback auth.: $10b, ~12 mos.
* Dividend qtrly expense: $1.66b
* NOTE: June 30, Goldman says Pfizer, Allergan among health
cos. that inversion would benefit
* PFE can renew talks w/AZN as soon as Aug.; new bid not
allowed before Nov.
* July 1, Leerink says Activis ‘‘good alternative" for
PFE; May 27: Pfizer ponders next move as $117b
AstraZeneca bid fails
* Merck & Co. (MRK) latest filing cash & mktable securities
$20.51b
* Unremitted earns 2013 $57.1b, 2012 $53.4b
* Buyback auth.: $15b, ~14 mos.
* Dividend qtrly expense: $1.29b
* NOTE: June 20, MRK began tender for Idenix, expires 5pm Aug.
4
* Johnson & Johnson (JNJ) latest filing cash & mktable
securities $29.39b
* Unremitted earns 2013 $50.9b, 2012 $49b
* Buyback auth.: $12.9b, ~25 mos.
* Dividend qtrly expense: $1.87b
* NOTE: July 11, JNJ may not seek big cardio, pharma M&A:
BI
* Bristol-Myers (BMY) latest filing cash & mktable securities
$10.62b
* Unremitted earns 2013 $24b, 2012 $21b
* Buyback auth.: $3b, ~24 mos.
* Dividend qtrly expense $594.72m
* Lilly (LLY) latest filing cash & mktable securities $5.21b
* Unremitted earns 2013 $23.74b, 2012 $20.98b
* Buyback auth.: $5b, 9 mos. since announcement
* Dividend qtrly expense $525.62m
* NOTE: June 11, LLY’s David Ricks Goldman conf. notes co.
still has ‘‘a lot of balance sheet capacity’’ and "wouldn’t
be afraid to use that for the right asset"
* AbbVie (ABBV) latest filing cash & mktable securities $9.1b
* Unremitted earns 2013 $21b, 2012 $19.4b
* Buyback auth.: $1.5b, 17 mos. since announcement
* Dividend qtrly expense $638m
* NOTE: Earlier, Credit Suisse analyst Vamil Divan says in
note ABBV-Shire transaction ‘‘allows access to global
cash flows in the long term”
* Mylan (MYL) latest filing cash & mktable securities $243m;
* Unremitted earnings 2013 $271m; 2012 $231m
* MYL has already looked at “a number of” additional
deals, mgmt says earlier on call
* Buyback auth.: $500m, announced ~8 mos ago; dividend
discontinued July 2007
* July 14: MYL to add ABT generic-drug unit for tax advantage
* Hospira Inc (HSP) latest filing cash & mktable securities
$677.1m
* Unremitted earns: 2013 $1.9b, 2012 $1.8b
* Buyback auth.: $1b, ~38 mos. since announcement
* Dividend qtrly expense: none
* Allergan (AGN) latest filing cash & mktable securities
$3.62b
* Unremitted earns 2013 ~$3.83b, 2012 $3.08b
* Buyback auth.: 208 mos. since announcement
* Dividend qrtly expense $14.04m
* Actavis (ACT) filing cash & mktable securities $340.2m
* Unremitted earns N/A
* Buyback last auth. $300m, announced ~113 mos. ago
* NOTE: Completed Forest Labs acquisition July 1, Furiex
July 2
* NOTE: FRX pre-acquisition latest filing cash & mktable
securities $3.32b; Unremitted earns 2014 $7.8b, 2013
$6.3b
* Perrigo (PRGO) latest filing cash & mktable securities
$617.1m
* Unremitted earns 2013, 2012 N/A
* Buyback auth.. $150m, ~28 mos. since announcement
* Dividend qtrly expense ~$14m
* Zoetis (ZTS) latest filing cash & mktable securities $506m,
buyback auth. N/A; latest qtrly div. paid $36m
* Unremitted earns N/A
* Buyback N/A
* NOTE: Cash, mktable securities, bbk, div. figures from
latest avail. SEC filings, some between quarterly earnings
periods
* NOTE: Tech, Health Care Top $1.9b Overseas Cash Pile: BI
* M&A Inversions Cut Pharma Tax Rates by Average of 775bps
* Click here for display of unremitted earnings data
* NOTE: June 26, U.S. Democrats Rep. Van Hollen, Sen. Levin
introduce bill to stop corporate inversions; June 24, Height
says Durbin’s tax bill “carrot to Levin’s stick”
* NOTE: May 21, Height says Levin bill "meaningfully alters"
current law; BI says Levin bill may drive more inversions
before law takes effect
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
--With assistance from Phil Kuntz in New York and Catherine
Larkin in Chicago.
To contact the reporter on this story:
Rachel Layne in Boston at +1-617-210-4634 or
rlayne@bloomberg.net
To contact the editors responsible for this story:
Brad Skillman at +1-212-617-2763 or
bskillman1@bloomberg.net
Gaurav Panchal