Pfizer Stock (NYSE:PFE)
According to a person familiar with the situation, Pfizer Inc. is in the process of selling $31 billion worth of debt in what is expected to be the fourth-largest US bond sale in the history of the country.
Over $85 billion in orders were placed for the eight-part investment-grade deal that the pharmaceutical giant will use to finance the acquisition of Seagen Inc. After the United States filed a lawsuit to halt a separate multibillion-dollar debt-funded acquisition by Amgen Inc., Pfizer and its bankers were compelled to make last-minute adjustments to the terms of the deal on Tuesday.
It is the largest debt financing for a merger or acquisition this year, and it comes amid a rush by companies to tap capital markets ahead of a potential jump in borrowing costs sparked by the US debt ceiling standoff. Pfizer’s bond sale, which is its first since 2021, is the largest debt financing for a merger or acquisition this year. According to the person, who asked not to be identified because the transaction is private, the portion of the deal that lasts the longest, a 40-year bond, is expected to yield 1.6 percentage points more than Treasuries. This is lower than what was initially discussed, which was 1.8 percentage points.
According to data compiled by Bloomberg, the transaction is larger than the amount that AT&T Inc. and Discovery Inc. sold in 2022 to help pay for the combination of their media businesses, as well as AbbVie Inc.’s 2019 offering for the acquisition of Allergan Plc. The amount that was sold by AT&T Inc. and Discovery Inc. in 2022 was to help pay for the combination of their media businesses.
According to a report by Bloomberg, Pfizer’s mega bond sale took place at the same time that the Federal Trade Commission filed a lawsuit to block Amgen’s $27.8 billion deal to buy Horizon Therapeutics Plc. The FTC claims that the merger would reduce competition in the market for the development of treatments for serious illnesses.
Still, Amgen may be needed to pay back the$ 24 billion in loans it took out to help fund the accession If the sale is unfit to go through. The accession of Seagen by Pfizer has surpassed that of Amgen as the largest purchase that has been made in the request this time. In an exploration note, judges from Jefferies LLC led by Akash Tewari said that the lack of imbrication weakens the FTC’s case and that it could make the Pfizer- Seagen deal” a more delicate pitch to the FTC.” This was stated in reference to the lack of imbrication between the two companies operations.
Given the company’s history of debt operation after accessions, Carol Levenson, director of exploration at Gim me Credit, believes some request actors will accept the deal anyhow.” the tenor of the backing implies nippy pay downs in the early times,” she added,” although the company has not yet made pledges of paying down debt by a certain time.” This is despite the fact that the company has not yet made pledges of paying down debt by a certain time. According to Levenson,” We’ve then a high quality, noncyclical credit with a balance distance that can absorb a$ 43 billion accession without material damage indeed without tapping its$ 20 billion of cash and investments on hand at the end of the first quarter or dealing its Haleon share.” ” We’ve then a balance distance that can absorb a$ 43 billion accession without material damage indeed without tapping its$ 20 billion of cash and investments on hand at the end of the first quarter.”
On Tuesday, a change was made to the so-called special mandatory redemption language that is included in the Pfizer deal. This language determines whether or not the bonds will be repurchased in the event that the deal is not finalized.
Pfizer representatives referred Bloomberg to the public comments that were already available and stated that they had nothing else to add.
On Monday, Pfizer started pitching the acquisition to potential investors. The sale is being spearheaded by JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., and Citigroup Inc. A request for comment was made to Goldman Sachs, JPMorgan, and Citigroup; however, BofA did not immediately respond to the request.
In March, the New York-based company reached an agreement to acquire Seagen for a total cash price of $229 per share. This brought the total enterprise value to approximately $43 billion. It is anticipated that the acquisition will be finalized later this year or early in the year 2024.
Featured Image: Pixabay @ mike_ramirez_mx
