Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) may have just proved how financially fit and capable the company is. On Friday afternoon the global generic drug giant reported that it has secured financing of $33.75 billion to help the company pay for its $40 billion or so acquisition of the generic business of Allergan PLC (NYSE: AGN).
Teva’s release said that it has entered into commitment letters with Bank of America Merrill Lynch, Barclays Bank PLC, BNP Paribas, Citi, Credit Suisse, HSBC, Mizuho Bank, Morgan Stanley Senior Funding, RBC Capital Markets and Sumitomo Mitsui Banking Corporation.
Commitment letters have been represented as offering Teva the following:
- up to $27,000,000,000 in loans under a senior unsecured Bridge Loan Credit Facility
- and up to $6,750,000,000 in loans under an Equity Bridge Loan Credit Facility.
While Teva noted that these commitments are subject to customary conditions, it is always impressive when a company can say that it secured tens of billions of dollars in financing. This is just one of the reasons that Teva was included as one of the 10 Stocks To Own for the Next Decade in a 24/7 Wall St. exclusive.
The customary conditions include the negotiation of definitive financing agreements and other conditions. News of this sort may not be the biggest market mover, but how many companies do you see that issue press releases saying they secured over $30 billion in funding?
So, did Mylan NV (NASDAQ: MYL) lose out here? The company successfully thwarted Teva’s buyout attempts. Some concerns may have been over financing, and some may have been regulatory. Either way, Mylan did not want to be acquired by Teva – and its shares paid a high price for it. When Teva’s deal for Allergan surfaced this last Monday, Mylan shares went from a Friday close of $65.94 down by a sharp 14.5% to $56.37.
Teva shares were down 0.5% at $68.73 on Friday afternoon. Its consensus analyst price target is now $75.50 and the 52-week trading range is $47.36 to $72.31.
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