Looks like Bristol-Myers-Celgene is really happening
Or at least the market thinks so.
The chart above illustrates the moving spread between Celgene’s share price and the value of Bristol-Myers Squibb’s offer for the company, which equates to one Bristol share plus $50. It’s not the most precise instrument in the world, but such a spread is a tidy indicator of how likely the masses think a deal will be done. The bigger the spread, the worse the odds. And if the two lines overlap, it’s a forgone conclusion.
Anyway, last week’s revelation that the two most influential shareholder advisers came out in favor of the merger, coupled with an activist investor dropping its challenge, seem to have cemented the inevitability of Bristol-Myers-Celgene in the minds of investors. That said, while the spread is thinner than ever, it’s not zero, suggesting there might yet be another twist before shareholders get the final say April 12.
The chart above illustrates the moving spread between Celgene’s share price and the value of Bristol-Myers Squibb’s offer for the company, which equates to one Bristol share plus $50. It’s not the most precise instrument in the world, but such a spread is a tidy indicator of how likely the masses think a deal will be done. The bigger the spread, the worse the odds. And if the two lines overlap, it’s a forgone conclusion.
Anyway, last week’s revelation that the two most influential shareholder advisers came out in favor of the merger, coupled with an activist investor dropping its challenge, seem to have cemented the inevitability of Bristol-Myers-Celgene in the minds of investors. That said, while the spread is thinner than ever, it’s not zero, suggesting there might yet be another twist before shareholders get the final say April 12.
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