Friday, March 30, 2007

WR Hambrecht Comments on Teva (TEVA) Takeover Targets, Is IPXL in Play?

WR Hambrecht comments on M&A speculation surrounding Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA). The firm said, "With the news on Reuters that Merck KGaA wants 'binding offers' by the end of April and following our visit with Impax Labs' (OTC: IPXL) CFO this week, we share our thoughts about the relative probability of TEVA acquiring either or both companies."

On Merck KGaA the firm said, "We believe it is unlikely that TEVA will acquire Merck KGaA's generic business for a combination of strategic, financial and competitive reasons and the timing just one year after closing IVAX, which will likely take at least another year to successfully integrate, seems to be an execution show stopper, in our view."

On Implax the firm said, "Impax, on the other hand, appears to be a much more plausible scenario which we would characterize as likely, perhaps as soon as Q3 this year, closing by year-end with upside to 2008 current guidance with additional strategic assets on the brand side that fit with TEVA's Neuroscience business. Our best guess is that TEVA will withdraw from the Merck KGaA bake-off in April and begin moving forward with Impax, as the most plausible near-term acquisition candidate."

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