Rumors are swirling in the Israeli press, that the world’s largest generic drug maker is about to become much larger. Reports are that the Israeli based Teva Pharmaceuticals (TEVA) is in talks to buy US Generic maker Barr Pharmaceuticals (BRL) for as much as $7.5 billion, a 40% premium to their closing price yesterday. While Barr comes with a fat price tag, the deal would make sense for Teva, as Barr is very active in Central and Eastern Europe, geographies that Teva has been targeting at for future growth.
Teva has around $3 billion in the bank so it appears they are going to have to go out and issue debt to fund the deal. The debt plus the big premium, may pressure the stock price in the short term, but over the long haul, this may prove to be another in a long line of very wise acquisitions.
The deal also brings some pride to the Israeli business community is this would be the biggest M&A in Israeli history. The fact that an Israeli company has the potential to do such a large acquisition is a testament to the ingenuity and steadfastness of the local economy.
Aaron Katsman, IsraelNewsletter.com
Disclosure: Author’s fund has a position in TEVA as of 7/17/08.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
I stumbled across the Reuters Health Summit that’s taking place in New York this week. Interestingly enough, they’re blogging the conference, so cheap investors like me can “attend” remotely. You can find the blog for the summit here.
Israeli generics giant, Teva Pharmaceuticals (Nasdaq: TEVA), participated and there’s a great (short) audio clip on what Teva believes in happening in the biogenerics space during and after the election cycle. Go here to check it out.
Written by: Aaron Katsman | September 19, 2007
By Aaron Katsman
www.IsraelNewsletter.com
Emerging market guru Mark Mobius, continues to gain momentum in his bid to block the sale of Taro Pharmaceuticals(TAROF.pk) to the Indian drug company Sun Pharmaceutical Industries Ltd. Taro delayed it’s planned shareholder meeting after it became apparent that they couldn’t assure the votes needed to win merger approval. While delay tactics may have worked in the past, new judge Michal Agmon-Gonen, won’t put up with it any longer. She’d fed up and she’s not gonna take it anymore.
Judge Agmon-Gonen schedule a hearing for January 13, 2008. In the event that Taro again postpones its shareholders meeting, the judge said, “If no shareholders meeting is held, the hearing on this date will decide on how Templeton’s(BEN) petition will be heard, without waiting for the results of the shareholders meeting.”
Taro has used every trick under the sun to stall. Taro notified the SEC that the audit of its 2006 financial report by Ernst & Young would be completed soon, and that financials for Q1 and Q2 of 2007 would be ready now. Once the financials are ready, a shareholder meeting could take place in October or November. Surprise, surprise. Now it appears that Taro will not meet these dates either. Taro’s attorney told the judge, “We’re working on it.”
She then went on to take a shot at Taro. “I cannot understand how it is possible to undertake a merger without financial reports. That is a scandal in itself, and contravenes the Companies Law.”
Looks like we have a judge with common sense.
Go Templeton Go!
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Disclosure: Author’s fund has no position of any stocks mentioned as of 9/19/07.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
