Retail and institutional investors aren’t the only ones who used the fourth-quarter selloff last year as a buying opportunity. Bristol-Myers Squibb (NYSE: BMY), one of the largest U.S. pharma companies by revenue, didn’t waste any time scooping up biotech Celgene (Nasdaq: CELG). Announced on January 3, the $74 billion acquisition is the second-largest pharmaceutical M&A deal ever (after the $87 billion merger of Warner-Lambert and Pfizer (NYSE: PFE) twenty years ago). Despite the price tag, it was still a bargain. Even though BMY offered a 53.7% premium to CELG’s closing price on January 2, the latter, which lost $30 per… Read More
Retail and institutional investors aren’t the only ones who used the fourth-quarter selloff last year as a buying opportunity. Bristol-Myers Squibb (NYSE: BMY), one of the largest U.S. pharma companies by revenue, didn’t waste any time scooping up biotech Celgene (Nasdaq: CELG). Announced on January 3, the $74 billion acquisition is the second-largest pharmaceutical M&A deal ever (after the $87 billion merger of Warner-Lambert and Pfizer (NYSE: PFE) twenty years ago). Despite the price tag, it was still a bargain. Even though BMY offered a 53.7% premium to CELG’s closing price on January 2, the latter, which lost $30 per share between August 30, 2018, and year-end, still trades below its 52-week high. This price action shows how unexpected the deal was, and how little of the future M&A premium was “baked” into the price of CELG before BMY has made its move. Identifying potential M&A targets is a difficult process, but it can be worth the effort. After all, a jump of 30%, 50% or even more is a nice payoff… But it’s never wise to simply invest in a stock on the hopes that it will one day be acquired — hence the research part. —Recommended Link— 9… Read More