Biotech Values

[biomaven0]

The 19.9% equity stake for the planned IPO of the animal-health business is not arbitrary—it must be <20% for the maneuver to be tax-free for PFE.

Unless the rules have changed in the last few years I think that is not correct - they could issue more than 20% and still have it be tax-free.

The advantage of selling <20% is that if they subsequently wanted to spin-off their remaining shares by distributing them to the PFE shareholders they could do that in a tax-free manner under Section 355 (which requires you to control at least 80% of the company you are spinning-off).

Peter