Drugmaker Bristol-Myers Squibb says to buy Celgene in $74bn deal

Logo of global biopharmaceutical company Bristol Myers Squibb

Global pharmaceutical giant Bristol-Myers Squibb is set to take over US-based Celgene for a record-breaking US$74 billion, according to a Bloomberg report on December 4.

Celgene shareholders will receive one Bristol-Myers Squibb share and US$50 in cash for each share held, or US$102.43 per share, a premium of 53.7 per cent to Celgene's Wednesday close. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. "Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company", said Mark Alles, chairman and chief executive officer of Celgene.

Celgene's shares rocketed in premarket trading Thursday morning on the deal news, soaring around 32 percent to $88.80. Finally, Barclays boosted their target price on Bristol-Myers Squibb from $55.00 to $58.00 and gave the company an "equal weight" rating in a research note on Friday, October 12th.

Bristol expects to achieve the $2.5 billion in cost savings by 2022 and said the deal will add more than 40 percent to its earnings in the first year after the deal closes, expected in the third quarter of 2019.

75 - while the New Jersey-based Celgene spiked 32 percent to hit $87.40. On Friday, November 16 the stock of Bristol-Myers Squibb Company (NYSE:BMY) earned "Market Perform" rating by BMO Capital Markets.

The new specialty firm will focus on treating people with serious conditions including cancer, offering nine products with "more than $1 billion in annual sales", the companies said.

Pensionfund Dsm Netherlands owns 0.71% invested in Bristol-Myers Squibb Company (NYSE:BMY) for 65,000 shs. Revlimid is expected to record almost $10 billion in 2018 sales.

Since July 23, 2018 according to StockzIntelligence Inc Bristol-Myers Squibb has 13 analyst reports. Analysts at Wall Street see Bristol-Myers Squibb Company's -22.94 % negative EPS growth compared to $1.09 EPS for previous quarter. That represents a premium of almost 54 per cent to Celgene's closing price of $66.64. The Boards of Directors of both companies have approved the combination.

Who wins in the cancer market in the years to come will depend on their pipeline of experimental medicines, not aging blockbusters.

But cash flow from Revlimid buys Bristol-Myers time to pay down debt and position for another transaction, Boris said. "Merging together makes the combined entity a lot stronger", said Loncar, whose firm runs the Loncar Cancer Immunotherapy ETF.

But a note from Cowen said the effect of the deal was "mixed". That deal, worth $9 billion, beefed up Celgene's immuno-oncology cell therapy portfolio, which already included bb2121 for multiple myeloma.

Bristol has obtained fully committed debt financing from Morgan Stanley Senior Funding Inc and MUFG Bank Ltd.

JP Morgan Securities LLC is serving as lead financial adviser and Citi is the financial adviser to Celgene.

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