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Pfizer proposes $106 billion deal in AstraZeneca merger

BY Michael Johnsen

NEW YORK — Pfizer early Friday morning upped the ante in its bid for AstraZeneca, which is now valued at $106 billion. Pfizer’s Chairman and CEO contacted AstraZeneca’s Chairman prior to the issuance of the announcement and AstraZeneca indicated it would respond after its board has reviewed the proposal. 

Pfizer has proposed to AstraZeneca a combination of the two companies pursuant to which AstraZeneca shareholders would receive, for each AstraZeneca share, 1.845 shares in the combined entity and 1,598 pence ($27.01) in cash. The proposal represents an indicative value of £50.00 ($84.47) per AstraZeneca share, based on Pfizer’s closing share price of $31.15 on 1 May 2014. The proposal would provide an opportunity for AstraZeneca shareholders to achieve significant value immediately upon closing of the transaction and at the same time participate in the short, medium and long-term value creation expected from the combination, Pfizer stated. 

“We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies," stated Ian Read, Pfizer chairman and CEO. "The consistent message we have heard reinforces our belief that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies. We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies.”

On the basis of Pfizer’s closing share price of $31.15 on 1 May 2014 and an exchange rate of $1.00:£0.5919 on 1 May 2014, the proposal represents a premium of approximately 32% to the unaffected closing price of £37.82 on April 17 (being the date before market speculation of a possible offer by Pfizer for AstraZeneca). 

In a letter to England’s Prime Minister David Cameron, Read noted that the combined company’s corporate and tax residence would remain in England. Read has committed to having two AstraZeneca board members join the combined company’s board and to headquarter the combined company’s European divisions in the U.K.

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Prestige closes deal on Australian Hydralyte brand

BY Michael Johnsen

TARRYTOWN, N.Y. — Prestige Brands Holdings on Thursday announced that it has closed the previously announced acquisition of Hydralyte from the Hydration Pharmaceuticals Trust of Victoria, Australia. Hydralyte is one of the leading over-the-counter oral rehydration brands in Australia, and will be marketed and sold through Care Pharmaceuticals, Prestige’s subsidiary in Australia. 

The transaction was finalized pursuant to the original terms of the purchase agreement announced on April 15. As previously mentioned, the acquisition of Hydralyte is projected to double the revenues of Care to approximately $50 million (AUD), and is expected to be accretive to Prestige’s earnings per share for fiscal 2015, exclusive of transaction, integration and purchase accounting items.

Prestige acquired Care in July 2013.

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Publix Q1 sales up 4.1% to $7.8 billion

BY Michael Johnsen

LAKELAND, Fla. — Publix’s sales for the first quarter of 2014 were $7.8 billion, a 4.1% increase, the company reported Thursday. It is estimated that sales for the first quarter of 2014 were negatively impacted by 1.3% due to the Easter holiday being in the second quarter. In 2013, the Easter holiday was in the first quarter. 

Comparable-store sales for the first quarter of 2014 increased 4%.

“I’m proud of our Publix associates who continue to deliver premier customer service,” stated Publix CEO Ed Crenshaw. “Our good operating performance is a result of their hard work and dedication.”

Net earnings for the first quarter of 2014 were $493.7 million, compared to $471.3 million in 2013, an increase of 4.8%. Earnings per share for the first quarter increased to $0.63 for 2014, up from $0.61 per share in 2013.

Effective May 1, 2014, Publix’s stock price increased from $30.15 per share to $32.50 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.

Publix is privately owned and operated by its 167,000 employees, with 2013 sales of $28.9 billion. Currently, Publix has 1,077 stores in Florida, Georgia, Alabama, South Carolina, Tennessee and North Carolina. 

 

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