Merck / SGP: Will the Pharma Megamergers Continue? [View article]
The market voted on the unwisdom of the deal for MRK shareholders, sending MRK down almost 8%. I suspect MRK will now cut their dividend, and the shares will be further pulverised in response. Managements and boards are failing to realise that the dividend is the most important reason to own a share in any company over the next few years, as the expectation of stock appreciation is no longer sufficient.
Very foolish of MRK's management to pay such a premium for SGP, and exceptionally irresponsible to pay such a large percentage in cash. In this environment, cash should be conserved to support the dividend. They have not learned from the DOW/ROH debacle, nor from the decimation of PFE's shares following their equally reckless buyout of WYE and dividend cut.
Here Come Pharma's 'Me-Too' Mergers [View article]
I have long-standing positions in both WYE and PFE.
In the recent past, I substantially increased my holding of WYE, when it dropped to what I believe is a good approximation of its true intrinsic value, $27-$30/share. So, as a WYE shareholder, I am very pleased to receive such an astonishing premium.
As a PFE shareholder, however, I am shocked to see the dividend halved, for the sake of paying an absurd premium for WYE. Yet another example of incompetent management making cowboy decisions, enabled by a board of zombie directors, and by banks trying to "lend money" to satisfy TARP!
One would have thought that in any decent system of corporate governance, a decision to acquire a competitor for over $60bn would be contingent upon a shareholders' vote, but, I understand that our incompetent, loose-gun-on-the-deck employees (PFE's management), who manage OUR COMPANY on OUR BEHALF, already signed a deal, with a $4bln breakup fee, without consulting us.
So, when you say there are more deals to come, I hope that the companies in which I hold stock are the ones who get acquired by idiots who run other companies. Owning stock in the acquiring company has mostly been a losing proposition for its shareholders.
Merck / SGP: Will the Pharma Megamergers Continue? [View article]
Very foolish of MRK's management to pay such a premium for SGP, and exceptionally irresponsible to pay such a large percentage in cash. In this environment, cash should be conserved to support the dividend. They have not learned from the DOW/ROH debacle, nor from the decimation of PFE's shares following their equally reckless buyout of WYE and dividend cut.
(disclosure: own shares in MRK, SGP, PFE and WYE)
Here Come Pharma's 'Me-Too' Mergers [View article]
In the recent past, I substantially increased my holding of WYE, when it dropped to what I believe is a good approximation of its true intrinsic value, $27-$30/share. So, as a WYE shareholder, I am very pleased to receive such an astonishing premium.
As a PFE shareholder, however, I am shocked to see the dividend halved, for the sake of paying an absurd premium for WYE. Yet another example of incompetent management making cowboy decisions, enabled by a board of zombie directors, and by banks trying to "lend money" to satisfy TARP!
One would have thought that in any decent system of corporate governance, a decision to acquire a competitor for over $60bn would be contingent upon a shareholders' vote, but, I understand that our incompetent, loose-gun-on-the-deck employees (PFE's management), who manage OUR COMPANY on OUR BEHALF, already signed a deal, with a $4bln breakup fee, without consulting us.
So, when you say there are more deals to come, I hope that the companies in which I hold stock are the ones who get acquired by idiots who run other companies. Owning stock in the acquiring company has mostly been a losing proposition for its shareholders.