Is Amylin Already At Full M&A Value Even Before It Is Announced? (AMLN, AZN, SNY, MRK, BMY, PFE)

The latest figures put the range at $25 to $29 per share.  We have in the past heard of price targets as high as $30.00 or even higher under the best of scenarios.  We have also heard prices in the high-teens as a starter and the low-$20s more recently for a floor.  The most resent range offered by Bloomberg using people with knowledge of the process shows the second round generating $25.00 to $29.00 per share.

The list of the big pharmaceutical names in the current bidding group are said to be AstraZeneca PLC (NYSE: AZN) Sanofi (NYSE: SNY), Merck & Co. (NYSE: MRK) and Bristol- Myers Squibb Co. (NYSE: BMY).  The latest is that Pfizer Inc. (NYSE: PFE) was interested in the base case but has effectively dropped out of the process.

Amylin would be valued at roughly $4.1 billion to $4.7 billion based upon the indicated share price range.  Where this gets interesting is that Amylin is supposed to have sales of $679.1 million in revenue in 2012 and $877.8 million in 2013.  The problem is that the company is still expected to lose money with -$1.78 EPS in 2012 and -$1.07 EPS in 2013.

Amylin could fetch more than the $25 to $29 range if it was profitable.  The problem is that it is not profitable and is not expected to be profitable for the near-future.

Shares are trading higher by only about 2.5% at $27.30 and the stock has recently traded as high as $28.45 around past buyout rumors.  After closing at $26.63 on Monday it sure appears as though most M&A speculators and investors see Amylin already trading close to fair value.  To prove a point, Thomson Reuters has a consensus ‘stand alone’ value at $19.84 for its consensus analyst target.

JON C. OGG