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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2040)	4/1/2008 12:46:56 AM
From: richardred	Read Replies (1) \| Respond to of 7242

I will hold on to my remaining shares. Teva Loves Its New Bentley Maurna Desmond, 03.31.08, 5:00 PM ET Drug company Teva has its eyes set on southern Europe's fast-growing generic market and its going to use Bentley Pharmaceutical to get instant market share in Spain. On Monday, Bentley Pharmaceuticals surged 18.3%, or $2.51, to $16.25 after Israeli drug outfit Teva Pharmaceutical Industriesannounced it is acquiring the Exeter, NH-based drug outfit for $360 million in cash. The purchase price represents a 9% premium to Bentley's Friday closing stock price of $13.74. The acquisition is expected to close in the third quarter of 2008, following the previously announced spin-off of Bentley's drug delivery business to shareholders. Bentley shareholders will tentatively receive $15.02 per share, in cash, for the acquisition. Teva expects the acquisition to increase earnings per share in less than a year. Teva got a slight bump from the news adding 18 cents, 0.4%, to $46.19. Gerard Van Odijk, chief executive of Teva Europe, told Forbes.com that there is tremendous opportunity in southern Europe and that "the game is about market share and we are very well-positioned." Ban Odijk said the "markets are just waking up and if you take the right position you can ride the growth in a very profitable way. There are several factors that have retarded the growth of the generic drug markets is this region. Firstly, many of these countries only recently observed patent rights so they went from openly violating brand patents to suddenly honoring them without any generic alternative. Secondly, unlike in the U.S. where individuals often foot the bill for medical treatment, European countries have been absorbing the brunt of brand name high prices. Spain has been able to soften the blow of drug prices because teh government assigns prices to generic and brand name drugs alike. Teva posted earnings of $2.3 billion in 2007 and expects to earn over $5 billion in 2012. Since its inception in 2004, TEVA Genericos Espanola has introduced more than 60 products and is currently the fourth largest generic company in Spain's hospital market. The combination of Teva Spain and Bentley's Spanish operations will create a portfolio of over 170 products and will have over 45 products pending generic product registrations. The to-be-acquired firm has about 130 pharmaceutical products in its medicine cabinet. It primarily markets its drugs in Spain, but also slings its non-brand name drugs in other parts of the European Union. Bentley's generic business had sales of $114 million last year. Board member James Murphy and Mr. Michael McGovern, Bentley's vice chairman, who currently holds 13.8% of the outstanding Bentley shares, are both in favor of the transaction. The two heavy-hitting shareholders spoke with Forbes.com Monday about the deal. Mr. Murphy said that the "excitement is on both sides of the Atlantic" and that "both companies are gonna do very well--as a sale and a spin transaction." Murphy said that Teva will benefit from Bentley's presence in Spain and spun-off CPEX can focus on completing phase 3 trials for its inter-nasal insulin spray, nasulin. Earlier in March, Teva lost a key court battle against Pfizer. The U.S. Court of Appeal reaffirmed that Teva couldn't market its copycat version of Pfizer's arthritis drug Celebrex until May 2014. (See "Pfizer Protects Celebrex Patent From Teva") forbes.com