I'll explain this in more detail tomorrow morning, over piping hot coffee & cream, fresh squeezed OJ, bananas and buttery croissants, but if these Merck businesses sell at around $14 billion, we will (I predict) see that the buyer receives some form of financing from (or assumes some of the debt of) the seller (Merck) -- at around $5 billion, to $7 billion. There is just no way anyone -- even with a currency tailwind from the UK/EU -- would pay around eight times sales for these properties, not on a net basis. So -- you read it here first -- if on Tuesday, Merck announces the sale, as part of its Q1 2014 results conference call, pre NYSE market open, do go look to see how much financing the buyer is assuming in the transaction, directly or indirectly from Merck. It is the NET number -- not the gross -- that matters. Here is the Reuters piece:
. . . .Merck & Co Inc is in the final stages of selling its consumer healthcare unit for close to $14 billion, with Bayer AG and Reckitt Benckiser Group Plc among final contenders to clinch a deal as soon as next week, people familiar with the matter said.
Germany's Bayer and British consumer products giant Reckitt have emerged as frontrunners to win the auction after each offering roughly $13.5 billion for the Merck consumer unit, best known for Coppertone sunscreen and Claritin allergy medicine, the sources said. . . .
Off to see some mindless Marvel Comics big screen fun! G'night, one and all! Keep it "on the train tracks"!
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