Bristol Myers Squibb (BMY)

[Johnny_C]

30 to 40% premiums seem to be normal in big deals though. After rereading PFE CEO statements regarding tax reform 2 other statements stand out..

1. they have their targets picked

2. They will act swiftly


On the one hand knowing a valuation at todays value is key to any upside if a tax reform happens. So buying now makes sense if you are the acquirer. A little risky, but if you guess right you get the tax benefits of both company's.


On the other hand, and I did not take this into consideration when leaping into options, if you are a target it would be reasonable to think if you are US based you will receive a bump if tax reform plays out. Several articles written have put a buyout between 70 and 100. That is a very expensive deal..BMY CEO recently became Chairman of Board, a friend of mine who actually put deals together for one of the big generics stated that wouldn't matter because these guys walk away with an ungodly amount of money that offsets any ego of being Chairman and CEO.

Rumors have been around now since Febuary of PFE, J&J, Roche or GILD interested in BMY. If it doesn't happen by year end I am moving on.