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Breakingviews: Valeant lives up to its name

Tuesday, May 28, 2013 - 03:40

May 28 - Breakingviews columnists discuss why the Canadian pharmaceuticals company’s $8.7 bln deal for Bausch & Lomb is a reminder to other CEOs that being bold in M&A can sometimes pay.

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It is sitting -- his name the pharmaceuticals company has just old fashioned long full almost nine billion dollars and the investors are loving it. And Ross and you've been witness for a while what was -- one necessary Keeneland deal investors love it because if -- that it it cut. Half the expenses and disdain for that segment profit and pressed his belief system and but he skipped the other thing they do have reputation because what happens is a -- these -- companies they spend a lot development RD and they don't really developed many drugs and fortunately the right kind of had investors behind. So there's still pouring a lot of money into this and they spent on marketing marketing these drugs. But they don't damage from prophecy can take these companies over just cut. Redundant are indeed that work for at least awhile which is sure. -- including Egypt and as you try to expedite this is owned by private actually human being told to handle the tons and cults well I. Well obviously hear about a private equity -- this is all about the whole story has -- not a seller's market how. You know particularly private -- just trying to unload everything whether its IPO or attitude to buyers yet which usually about this is actually -- had a buyer's market. Because you know the buyer is getting hugely -- on this deal and others some special sauce the value has. But it's a reminder about emanate which has been pretty stagnant and it's been flat for the last three or four years -- and globally. But the right deal the right bold deals. Can can do very well the buyer. Yeah I mean I was a market that mean balanced market cap went -- that and close to six billion dollar which it's still -- -- nightly -- that's that's that's that's what we reckon the the -- back in the Kimberly present values and yet directly and and the thing is it if you just a place there cost cuts worth about five billion I'm an alien. The deals worth I think is Elliott has just his ridiculously low amount of taxes -- -- taxpayers up 5% this year he should maybe hold on the congress. -- Houses and well there they'd been there and IP company in the entering Canada and they also do a lot of offer that's so so. -- they've got some clever accountants for Brian -- did they actually can maintain -- -- and if -- syndicate of fox attacks right -- means that makes the basic cost -- -- for the -- -- exactly. And I mean you know again we know -- and most of today is completely value destructive in here is again a point where we've seen over the last few years. Where's you know lack of confidence is what most mostly -- CEOs and boards. I'm doing and today its view these kinds of deals these kinds of Smart and vertical type of deals where there's a ton of cost cutting to be done. That the markets just love sports get rewarded for everybody winds -- happy it's not this kind of bold everybody's waiting for the big bold. Pars Arnold the other big news transforming -- -- they wanna call it and that's about three -- -- Nice to advertisers regardless Gary you'll do about these speed banks itself you know again -- as of yet but so what do you we've -- looking for other deals. Yeah I mean and it happens when does that offer value -- -- -- if if it and getting paid by the market -- thing -- -- about -- free money creating this the other people are telling them. Mean the company said you know we're not as big as Johnson & Johnson yet I mean Johnson Johnson ten times the size and I'm -- that -- federal court. That's quite a -- -- to go and and as Jeff says you know all these companies everyone's ever thinking -- to deal with that the financial logic is behind yeah. Looking at similar deals and some rewards points -- that exit well. Thanks rob thanks Jeff and will make -- will follow -- -- deals that is as good or is has found it doesn't come up with. That's it must animal Britain's east market.

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Breakingviews: Valeant lives up to its name

Tuesday, May 28, 2013 - 03:40