Catalent shares soar 25% after Danaher takeover
2023.02.06 08:30
Catalent shares soar 25% after Danaher takeover
By Kristina Sobol
Budrigannews.com – Catalent shares (NYSE:) jumped 25% in pre-open trading on Monday following a Bloomberg News report over the weekend that Danaher (NYSE:) a desire to acquire the contract manufacturer has been expressed.
According to sources familiar with the situation, the initial offer from Danaher values Catalent at a “significant premium” to the current market price. It was added that a deal is not imminent and that Catalent’s acceptance of the offer is unclear.
In an email to the news outlet, a representative stated, “As a matter of company policy, Catalent does not comment on market rumors or speculation.”
Citi analysts have commented on the rumors and said they have taken a “cautious stance” on a possible deal, citing Danaher’s strategic fit and the reason for it given investors’ focus on deals’ margin trajectory. Additionally, the analysts drew attention to earlier statements made by Danaher’s management, which stated that the company’s capacity to successfully implement the DBS strategy would make a services acquisition (CRO/CDMO) less likely.
“We believe the potential acquisition of CTLT would be viewed skeptically given the lower margin profile and lower cost synergy potential,” they added. “While investors have at times speculated that DHR could eventually make a foray into the services space,” they said.
Analysts at BofA Securities expressed a little more optimism regarding the potential partnership, writing: Although DHR has stated that it is not interested in pursuing services deals, we believe that such a combination would make sense on a high level because the two businesses operate in adjacent markets. DHR holds the leading position in the supply of products used in biologic drug manufacturing, while CTLT is expanding its presence in contract biologics and cell & gene therapy (C>) services.”
In the wake of the report, Danaher shares are down 0.7% in pre-open trading on Monday.
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