Remember that only about five days ago he told the bankers running the B + L deal process that even though Merck's consumer health business is a smaller contributor -- and he is looking at ways to increase the contribution -- he was relatively happy with it.
And adding perhaps $10 billion to the allocated capital the consumer health unit needs to cover, for EPS purposes, given the relatively lower margin businesses/franchises B + L operates [as compared to say Merck's Isentress® (HIV) or Victrelis® (HCV)]. . . seems a bit of a stretch. At that price, it would be a higher multiple of current year's sales (around 3.2X) than Merck paid for all of legacy Schering-Plough (around 2.2X). [Nice try, Fred!]
And so, this is very likely just idle investment conference chatter, so as not to offend Goldman's bankers -- who took the time to pitch B + L to Whitehouse Station over the holidays.
Here is the Bloomberg item -- for what it is worth -- but do go read it all:
. . . .“It’s something that’s worth thinking about, that’s the most I can say,” Frazier said in an interview yesterday at the JPMorgan Chase & Co. health conference in San Francisco.So, file this one under "the price makes the horse" (or, doesn't!), right? Of course, as ever, we will keep you posted if this gets serious.
Warburg, working with Goldman Sachs Group Inc., is giving interested parties access to its financial data and seeking first-round bids by month’s end, said people with knowledge of the matter, who asked not to be named because the process is private. Warburg is seeking at least $10 billion for the business, these people said. Goldman Sachs contacted some prospective bidders including Merck before Christmas with information about Bausch & Lomb, said one of the people.
Frazier has said that he’s happy with Merck’s diversified business model, which includes animal health and consumer health units. . . .