Reversing a trend

Amy Scott Feb 12, 2007

Reversing a trend

Amy Scott Feb 12, 2007

KAI RYSSDAL: Two data points do not a trend make. We know that. But when a trend line has been relentlessly upward the past 12 months, those two points are worth a look.

Consider a couple of the big deals of past year. AT&T and BellSouth. Steel makers Mittal

and Arcelor

. In the U.S. alone, $225 billion just since January 1. So many deals have gone through, it’s almost a shock when one fails.

But it was a rough weekend in M&A’s. Shareholders in the London Stock Exchange turned back Nasdaq’s hostile bid. And talks between Bristol-Myers Squibb and the French drug company Sanofi-Aventis have fallen by the wayside. More now from Marketplace’s Amy Scott.

AMY SCOTT: There’s rejection. And then there’s this. Just half of 1 percent of London Stock Exchange shareholders voted in favor of a merger with Nasdaq.

Adam Sussman saw it coming. He’s an analyst with the Tabb Group.

He says the recent parade of big-money deals is partly to blame. London shareholders didn’t like the price Nasdaq was offering and thought they could hold out for more.

ADAM SUSSMAN: Given the premiums that private equity companies have been paying for public companies over the last year or two, it’s understandable that shareholders and LSE management would be expecting a higher bid.

The Bristol-Myers Squibb


merger failed because the new name would have been simply too long.

Just kidding. Actually, neither company ever confirmed that the two were talking. But British newspaper The Times reported this weekend that the alleged talks broke down over a disagreement on price . . . and ongoing patent disputes involving Sanofi’s blood-thinner, Plavix.

Mark Ravera is a consultant to the pharmaceutical industry. He also saw this obstacle.

MARK RAVERA: Sanofi is still, I think, digesting the Aventis merger. So to move so quickly from the Aventis acquisition into a Bristol acquisition could cause lots of internal logistical problems.

The failure of these two deals — or alleged deals — leaves all parties exploring their options. Consolidation is the name of the game in many industries these days. And analysts say the deal-making is far from done.

In New York, I’m Amy Scott for Marketplace.

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