Rakesh Saxena

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

Dear juan77: At this point, from available data, it appears that PFE will need to raise about $35 billion by the 12th month after the deal is completed; this number could vary according to PFE's performance over the next six quarters. Whether PFE decides to issue new shares to refinance the S/T loans is an open question, to be influence by market conditions. But, yes, you are right in recognizing the dilution risk. Many thanks - R


On Feb 04 02:15 PM juan77 wrote:

> Other than the bridge loan, how much capital does PFE need for the
> acquisition?
> If it has to raise capital by issuing new shares, will PFE's stock
> price suffer the same fate as BAC and WFC which raised additional
> capital by issuing stock at a discount to market value?
> n which case, is PFE a viable short candidate?

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

Correct macsmart. The issue really is "what type of lending?" This deal is not a "money flowing through the system" deal, and is contrary to what we hear from Washington. But, then again, nobody in Washington is objecting to the deal!!! -Many thanks - Rakesh


On Feb 03 09:34 AM macsmart wrote:

> Isn't the idea that we want banks to start lending again to get business
> moving again?

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

Dear buyitcheap: The short or long position depends on the merger-arbitrage spread. The question of which stock will suffer if the deals fails is still an open question which I am checking with healthcare analysists. Will provide updates shortly. Many thanks - Rakesh


On Feb 03 07:32 AM buyitcheap wrote:

> Wouldn't short Wyeth be a better idea if the deal falls apart?

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

Dear pfeskeptic. I was told by a long-term health care analyst that Pfizer was expecting this settlement, with or without the Wyeth deal. On the other hand, the $2.3 billion could have been used to reduce the syndication amount from the bailout candidates, so there is that TARP connection. More importantly, it is important to note that without government backup, the syndication could not have underwritten the Pfizer loan in the first place. Many thanks - Rakesh


On Feb 02 09:22 PM pfeskeptic wrote:

> Question: Does Pfizer's announced $2.3 billion settlement with the
> U.S. Attorney (to end an investigation of illegal marketing practices
> associated with Bextra) increase the company's financing needs for
> this acquisition? Does an absence of this cash due to the settlement
> require the company to borrow more and would this, in any way, consume
> capital that TARP recipient banks could be using for other purposes
> that do not kill jobs?
>
> I honestly do not know the answer to this question, but those who
> are concerned about the TARP connection to this deal (if there is,
> in fact, a connection) might also take issue with the financial impact
> of Pfizer's settlement.
>
> Anyone have anything intelligent to say about this? Thanks

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

typo correction "what is in question is the underwriting-type risks the banks are assuming when....."


On Feb 02 12:17 PM Rakesh Saxena wrote:

> Dear rd4sndk: You are missing the point completely; please re-read
> the post. What is in question is the underwriting-type risks the
> banks when it is not clear if their balance sheets support those
> risks. Particularly in the face of an impending Bad Bank package.
> Nobody is questioning Pfizer's ability to close or re-finance. Many
> thanks - Rakesh

The Pfizer-Wyeth Deal: Experimenting with Taxpayer Dollars?

Dear rd4sndk: You are missing the point completely; please re-read the post. What is in question is the underwriting-type risks the banks when it is not clear if their balance sheets support those risks. Particularly in the face of an impending Bad Bank package. Nobody is questioning Pfizer's ability to close or re-finance. Many thanks - Rakesh


On Feb 02 11:25 AM rd4sndk wrote:

> Its this type of blog that's driving me crazy. Do you expect Pfizer
> to welch on its loans or that the expected $20B in CF to not materialize?
> How obsurb is to restrict the banks from loaning to a bluechip company
> with $20B+ in cash reserves and a FCF greater than $10B. Find something
> else to do with your time and leave us alone with absurb fears of
> Pfizer failures. I for one welcome such transactions and plan to
> take part in the arbitrage shortfall to reap my 12% in 90 days.
>
>
> There are transactions that unhealthy banks have made and I didn't
> hear you questioning those like Citi's planned purchase of Wachovia
> etc. Now there's a merger that was rightfully terminated.