Biogen Idec Leverages Up For $3 Billion Share Buyback Plan (BIIB)

Biogen Idec inc. (BIIB-NASDAQ) is trading up roughly 4% pre-market at $51.40, within striking distance of its $52.72 high over the last year on news of a share buyback plan.  That is also the high since its Tysabri withdrawal in 2005.  This is not a run of the mill buyback where the company says it will buyback shares and only purchases a few here and there.  The company already had an active 20 million share buyback plan.

For starters this is a $3 Billion buyback, but it is specifying that it is roughly 57 million shares through a ‘modified Dutch tender offer.”  This is more than 15% of the outstanding shares and it is good between price collars of $47.00 and $53.00. 

The tender offer is subject to financing of $1.5 Billion cash and $1.5 Billion in debt issuance.  Biogen has signed Merrill Lynch and Goldman Sachs for the $1.5 Billion term loan that will finance half of the tender offer.  Prior to this tender, the company had over $1.1 Billion in liquidity (not including $800 million in other short term assets) and roughly $862 million in long-term debt (total liabilities $1.362 Billion).

Jon C. Ogg
May 30, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.