Biotech Values

[DewDiligence]

BMY-MJN update: The stock-swap tender was fully subscribed, and hence BMY will exchange its entire equity stake in MJN for 269M shares of BMY itself. Consequently, BMY’s diluted shares outstanding will be reduced by approximately 14%:

http://finance.yahoo.com/news/BristolMyers-Squibb-and-Mead-bw-3214557964.html?x=0&.v=1

This transaction was effectively a very large cashless buyback of BMY’s own shares. It increases BMY’s EPS going forward and it makes BMY considerably more attractive to a Big Pharma suitor such as SNY, GSK, or NVS. All told, this was an impressive example of financial engineering, IMO.