BusinessWeek - Mar 02, 2010Merck KGaA (MRK)
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Peter Duellmann
at
Sal. Oppenheim jr. & CieStill, the price is so high that
Merck's return on the investment will be less than the cost of the financing to fund the deal, according to Sachin Jain, an analyst at Bank of America Merrill Lynch.
Merck last week said earnings this year will increase less than analysts had estimated and proposed a 33 percent reduction in the dividend.
"The deal appears expensive and we have the impression that investors would have preferred an enhancement of the pharma segment and now might interpret the acquisition at that price as a defensive move," Peter Duellmann, an analyst for Sal. Oppenheim Jr. & Cie in Cologne, wrote in a report yesterday.
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Still, the price is so high that <span class="company">Merck</span>'s return on the investment will be less than the cost of the financing to fund the deal, according to Sachin Jain, an analyst at Bank of America Merrill Lynch. <span class="company">Merck</span> last week said earnings this year will increase less than analysts had estimated and proposed a 33 percent reduction in the dividend.<span class="sent"> "The deal appears expensive and we have the impression that investors would have preferred an enhancement of the pharma segment and now might interpret the acquisition at that price as a defensive move," <span class="analyst">Peter Duellmann</span>, an analyst for Sal.</span> Oppenheim Jr. & Cie in Cologne, wrote in a report yesterday.
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