![]() ![]() ![]() Morgan Securities LLC as financial advisors, with Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel. Bioverativ appointed Guggenheim Securities and J.P. Sanofi appointed Lazard as a financial advisor and Weil, Gotshal & Manges LLP is serving as legal counsel. Post successful completion of the tender, a wholly owned subsidiary of Sanofi will merge with Bioverativ and all the outstanding shares which are not tendered in the offer will be converted into the right to receive $105 per share in cash paid in the tender offer. The tender consummation is subject to conditions such as the tender of at least a majority of the outstanding shares, redelivery of a tax opinion delivered at signing, the expiration or termination of the waiting period under the Hart Scott Rodino Antitrust Improvements Act and receipt of certain other regulatory approvals, and other customary conditions. Under the merger agreement, Sanofi will commence a tender offer to acquire all of the outstanding shares of Bioverativ common stock in February 2018. Sanofi also expects to achieve ROIC exceeding its cost of capital within the next three years. The deal is projected to be accretive to Sanofi ’s 2018 business EPS and up to 5% accretive in 2019. Sanofi is expected to finance the transaction with a combination of cash and new debt (without impacting its credit rating). The transaction has been unanimously approved by the boards of directors of both the companies and is expected to complete within the next three months, subject to regulatory approvals and other customary closing conditions. On a reconstituted basis, assuming shareholders had held both stocks since the time of the spin-off, they would have reaped handsome returns of 41%, easily beating S&P500 returns during the corresponding period by 17%. ![]() On the other hand, Sanofi ’s bid for BIVV has proved to be a heady concoction for the company’s shareholders (+129%), as the stock ripped through the roof, outperforming the Index by a whopping 105% since regular-way trading. In the corresponding period, BIIB has provided a potent dose of returns (+33%) to its investors, outperforming S&P 500 by a healthy 9% on expectations of improved chances of success of its Alzheimer’s drug. The spin-off of BIVV has led to immense value creation for BIIB’s shareholders so far, when compared with the returns for S&P500 (+24%) since the start of regular-way trading (February 2, 2017). However, in January 2018, Sanofi ’s all-cash deal for BIVV catapulted the company into the league of big boys, accounting for a majority of the shareholder value created since the start of regular-way trading. However, for a large part of the 4Q17, BIVV surrendered a part of its post-listing gains as investors fretted over the lack of management guidance during the 3Q17 earnings call and uncertainty over the success of the True North Therapeutics acquisition. In contrast, BIVV jumped post-listing on investor interest in a niche pharma player focused on the treatment of hemophilia and other blood disorders, coupled with the company’s consensus-beating results. Moreover, better-than-expected 4Q17 results (on strong SPINRAZA sales) and a solid 2018 outlook were recent positives. Although BIIB’s stock plunged following weak margins and lower profit outlook subsequent to 1Q17 results, the company has again found favor with investors following improved financial performance and positive results of aducanumab, an investigational treatment for Alzheimer’s. Both, BIIB and BIVV have independently generated robust returns for shareholders post spin-off.
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