Stock Spinoffs

Baxalta Attempts To Bulk Up With Ariad To Avoid Shire Advances

Just two months after its spinoff from Baxter International(BAX), as it continues to reject acquisition interest from Shire(SHPG), Baxalta(BXLT) is in talks to acquire Ariad Pharmaceuticals(ARIA). Ariad jumped 42% on the news last Friday, valuing the oncology company at nearly $2 billion.

What is driving this potential acquisition? Is it the “Promise of the Baxalta Spark“?  Perhaps it’s the “purpose-driven culture”.  More likely it is an attempt to bulk up and make the company less interesting to Shire. Management clearly wants a chance to remain independent and show what they can do. If Shire gets more aggressive, however, they may have no choice but to agree to a shotgun wedding.

Disclosure: The author holds no shares of any stock mentioned

 

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