Jan. 23, 2014, 5:07 PM
- McKesson (MCK) reaches an agreement to buy Celesio (CAKFF) just 10 days after a failed tender offer for the rival company.
- MCK acquires majority owner Franz Haniel & Cie's entire holding in Celesio for €23.50/share, the same price as its previous bid, and purchases Celesio convertible bonds from hedge fund Elliott Management; the moves provide MCK with more than 75% ownership of Celesio’s shares.
- MCK has been seeking to expand, and Celesio has 132 wholesale branches supplying 65,000 pharmacies and hospitals across Europe.
- MCK +2.9% AH.
Jan. 23, 2014, 8:17 AM
- Franz Haniel & Cie, which owns 50.01% in Celesio (CAKFF), could be trying to revive the sale of the German drug distributor to Mckesson (MCK) after the U.S. company fell short of gaining shareholder acceptance for the deal last week.
- Reuters reports that Haniel has offered Elliott €23.50 for its shares - the same amount that Mckesson bid - although it's not clear how much Haniel would pay for the hedge fund's convertible bonds in Celesio.
- It's also not clear if Haniel is acting as an intermediary for McKesson.
- On a fully diluted basis, including convertibles, Haniel owns 41.8% in Celesio and Elliot 26.7%.
- McKesson needed shareholder acceptance representing 75% of Celesio's voting rights for its bid to be authorized.
Jan. 14, 2014, 3:17 PM
- Morgan Stanley adjusts the numbers for McKesson (MCK -0.4%) following the failed Celesio bid, cutting the price target on the shares to $180 from $190.
- Analyst Julie Murphy posits three scenarios going forward: MCK could establish a "new JV with RAD / WMT and/or Celesio;" the company could buyback shares, as it "had ~$3.5B in cash at the end of the December quarter of which $1.5B is ex US," or they could make "another go at Celesio."
- FY15 EPS estimate cut to $10.47 from $11.03.
Jan. 14, 2014, 9:09 AM
- McKesson (MCK) came pretty close to succeeding in its $8.4B bid for Celesio (CAKFY), receiving tenders representing 72.33% of shares when including the dilutive effect of convertible bonds.
- The U.S. company had set a target of 75% and had won the support of hedge fund Elliot Management, which is a major Celesio shareholder.
- McKesson is now looking at alternative ways of working with the German company, including a joint venture.
Jan. 13, 2014, 2:18 PM
- "We naturally expected shares would decline following the disappointing news," FBR's Tom Gallucci says of McKesson (MCK -4.8%), in the wake of the company's failed bid for Celesio (CAKFF).
- Nevertheless, Gallucci says MCK is "well positioned going forward [as] the company's core operations have been the best performing in the sector over the past year."
- Outperform rating maintained.
Jan. 13, 2014, 1:04 PM
- Reopened for trade, McKesson (MCK -6.7%) gives back about all of last week's gains following its failed bid for Celesio (CAKFF -1%).
- CEO John Hammergren: "We are well positioned and will continue to explore and evaluate opportunities to further strengthen our businesses through our disciplined approach to capital allocation.”
Jan. 13, 2014, 12:59 PM
Jan. 9, 2014, 7:03 AM
- As flagged, McKesson (MCK) has increased its bid for German peer Celesio (CAKFF) to €23.50 a share from €23 as it looks to win support for the deal from Elliott Management.
- The U.S. hedge fund, which owns almost 25% of Celesio, had opposed the original offer as being too low but has agreed to sell its convertible bonds to McKesson.
- The tender offer is now valued at around €4B ($5.4B) and expires at midnight tonight in Frankfurt. McKesson has made its proposal conditional on obtaining at least 75% of Celesio's shares. (Previous) (PR)
- Update: Elliot says that two of its funds have agreed to sell their convertible bonds and shares in Celesio; from McKesson's press release, it wasn't clear what the status of the Elliot-held stock would be.
Jan. 9, 2014, 3:52 AM
- McKesson (MCK) has reportedly increased its bid for German peer Celesio to €23.50 a share from €23 in order to try to persuade hedge fund Elliot International to support the offer from the U.S. drugs wholesale group.
- Elliot, which owned a 22.7% voting stake in Celesio as of late December, rejected McKesson's initial proposal as being too low.
- McKesson has made its offer conditional on obtaining at least 75% of Celesio's shares by tonight. It has already agreed to buy 50.01% from diversified holding company Franz Haniel & Cie. (Previous)
Jan. 8, 2014, 8:57 AM
- McKesson (MCK +2.3%) is reportedly preparing to offer concessions to hedge fund Elliott International so that the latter will support the U.S. pharmaceutical distributor's $8.3B bid for German peer Celesio.
- McKesson has made its proposal conditional on obtaining at least 75% of Celesio's shares - including those from the convertible debt - by tomorrow night. McKesson has already agreed to buy 50.01% of Celesio from diversified holding company Franz Haniel & Cie.
- As of late December, Elliot owned a 22.7% voting stake in Celesio.
Jan. 7, 2014, 3:33 AM
- National healthcare spending grew less than 4% for the fourth year in a row in 2012, rising 3.7% to $2.8T, a report by the Centers for Medicare & Medicaid Services shows.
- As a proportion of the total economy, expenditure edged down to 17.2% from 17.3%.
- The authors of the report said that the continued slow increase in spending was due to the lingering impact of the recession but that Obamacare has had a limited effect. However, the White House said the figures vindicated the President's signature policy.
- The authors were also cautious about whether the trend will continue, or whether growth will return to the higher levels experienced prior to the recession.
- The cost of hospital care rose 4.9% in 2012 and that for doctors' services and outpatient clinics 4.6%, although spending on prescription drugs increased just 0.4%, due to patent expiries.
- Relevant tickers: AET, HNT, HUM, UNH, WLP, MOH, HCA, CYH, THC, UHS, HMA, LPNT, WAG, CVS, BIOS, RAD, MHS, PMC, OCR, MCK, CAH, ABC, ESRX, MHS, CAH.
- ETFS: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
Jan. 6, 2014, 2:09 PM
- McKesson (MCK -0.1%) upgraded to Strong Buy from Outperform at Raymond James.
- DaVita (DVA +0.4%) upgraded to Outperform from Market Perform at Raymond James.
- Idenix Pharmaceuticals (IDIX -0.3%) upgraded to Buy from Neutral at UBS.
- Abbott Labs (ABT +1.5%) upgraded to Overweight from Equalweight at Morgan Stanley.
- Medtronic (MDT +2%) upgraded to Overweight from Neutral at JPMorgan. Price target is $69.
- Vertex Pharmaceuticals (VRTX +2.5%) upgraded to Buy from Neutral at UBS.
- Ocera Therapeutics (OCRX +2.7%) upgraded to Outperform from Market Perform at BMO.
- Boston Scientific (BSX +3.2%) upgraded to Overweight from Equalweight at Morgan Stanley.
- Exelixis (EXEL +4.6%) upgraded to Overweight from Neutral at Piper.
- St. Jude Medical (STJ +3.8%) upgraded to Overweight from Equalweight at Morgan Stanley.
Dec. 25, 2013, 1:30 PM
- "We believe the most likely way this happens is for McKesson (MCK) and Elliott (or their intermediaries) to find a common ground whereby MCK raises its bid subject to Elliott agreeing to tender all of its holdings," Deutsche's George Hill says, referencing MCK's offer for Celesio.
- Hill thinks that after the "tough talk" is over and the deal is done, the potentially sweetened bid "could shave $0.15-0.20 off of MCK's fully consolidated near-term deal accretion estimates of $1.00-1.25."
- "MCK shares likely have 10% downside risk if the deal breaks to $140-145 per share," Hill adds.
- For more, see here.
Dec. 23, 2013, 7:03 AM
- Elliott International says it remains "irrevocably bound" to reject McKesson's (MCK) $8.3B bid for German peer Celesio in its current form. The hedge fund was responding to reports that it could change its mind and accept McKesson's proposal.
- Elliot, which owns a 22.7% voting stake in Celesio when taking two convertible bonds into account, wants McKesson to sweeten its offer.
- McKesson has made its bid conditional on obtaining at least 75% of Celesio's shares, including those from the convertible debt. McKesson has already agreed to buy 50.01% of Celesio from diversified holding company Franz Haniel & Cie.
Dec. 5, 2013, 3:50 AM
- McKesson (MCK) has launched a tender offer to buy the outstanding shares of German peer Celesio as the U.S. drugs distributor attempts to prevent hedge fund Elliott International from blocking the deal.
- McKesson has made its offer conditional on obtaining at least 75% of Celesio's shares, including those from two convertible bonds. When taking the debt into account, Elliot owns 21.05% of Celesius.
- McKesson has already agreed to buy 50.01% of Celesio from diversified holding company Franz Haniel & Cie. The total is worth $8.3B.
Nov. 21, 2013, 8:58 AM
- Deutsche starts McKesson (MCK) at Buy.
- MCK is analyst George Hill's "preferred name among the drug wholesalers" given the "many earnings levers [it has] to pull on including synergies from the PSS deal, the recent Celesio deal, the potential for future transactions, deleverag[ing], [and] share repurchases."
- Also bullish at last check: FBR, Morgan Stanley, Leerink, and Baird.
- Price target is $181.
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