Although it has been reported that Alexion Pharmaceuticals, one of the few profitable biotechs around, (advised by RBC) is in play on the M&A front, with Biogen (advised by Goldman Sachs), there could be more to this story than is currently in focus.
The first point to note is that Biogen’s $44bn market cap, versus Alexion’s $25bn, makes a takeover quite compelling as neither company has debt. But it is also the case that Elliott, the activist shareholder, has been generating interest in Alexion, especially with larger players.
The favoured contenders are said to be Amgen (AMGN), a $145bn company, and Astrazeneca (AZN), a £114bn company. Both companies would be able to buy Alexion more comfortably than Biogen, especially if a significant premium had to be paid. But more importantly, they would also not like to have a new larger competitor which Biogen / Alexion would be.
For instance, if the mooted $170 a share take out price had to be paid, a combined Alexion / Biogen’s market cap would not be far off than its larger competitors. Therefore, for this reason, if nothing else, it makes sense that a larger player will step into the M&A situation to head it off, and Amgen or Astra fit the bill on this basis. The timeframe on a conclusion here could be as soon as the end of this month according to those said to be familiar with the situation.
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