Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) states in a notice to the US Securities and Exchange Commission (SEC) that if Cephalon Inc. (Nasdaq: CEPH) cancels its acquisition by Teva, it will pay a fine of 4% of the $6.8 billion deal - or $275 million.
According to the joint presentation by the two companies following the acquisition announcement on Monday, Teva will still have more than $1 billion in cash after closing the deal. It said that its balance sheet has "sufficient liquidity for future strategic opportunities."
When the deal is closed, Teva's debt will rise from $6.9 billion at the end of 2010 to $12.7 billion, and its debt-to-shareholders' equity ratio will rise from 31.4% to 52.9%.
In its guidance, Teva predicts $18.5-19 billion revenue in 2011. It said that adding Cephalon's guidance brings the figure to $21.5-22.1 billion.
Cephalon today published its financial report for the first quarter. The biopharmaceuticals company missed the analysts' revenue consensus with $745.1 million revenue, 24.9% more than the $596.6 million revenue for the corresponding quarter of 2010, but 3.3% less than for the preceding quarter.
Non-GAAP net profit was $158.4 million ($1.98 per share), 10% higher than the $144 million for the corresponding quarter, but less than for the preceding quarter. The company had $1.16 billion in cash at the end of March.
Cephalon CEO Kevin Buchi said, "After analyzing a full range of strategic options our board concluded that the Teva offer provides the maximum shareholder value for Cephalon shareholders. Based on these 2011 quarterly earnings, Cephalon is once again off to another very strong start. Given this performance, we expect that our full year earnings will meet or even exceed our previous guidance.”
Cephalon's share price fell 0.1% yesterday to $79.99, giving a market cap of $6.06 billion. Teva's share price fell 1.7% on Nasdaq yesterday to $46.46, giving a market cap of $43.7 billion, and fell 1% by mid-afternoon on the TASE today to NIS 157.40
Published by Globes [online], Israel business news - www.globes-online.com - on May 4, 2011
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