Novartisâ€™ Vision, WaMuâ€™s White Knight
Novartis buys a 25 percent stake in Nestle eye-care unit Alcon. Washington Mutual is near a $5 billion investment that could save its independence. And death provides an unexpectedly rich living for a Los Angeles entrepreneur.
NEWS AT A GLANCE
Novartis to buy Nestle eye-care stake
Swiss drugmaker Novartis AG agreed to pay $11 billion for a 25 percent stake in Nestle eye-care unit Alcon Inc., with the option to buy another 52 percent for $28 billion. With a majority of Alcon, Novartis would be the No. 1 producer of eye-care products. (Bloomberg) Novartis is looking to expand beyond prescription drugs as it faces increased competition from generic competitors. It’s “a very rich price in our view,” said WestLB analyst Andreas Theisen, despite Alcon’s projected “double-digit growth.” (Reuters) Shares of L’Oreal, in which Nestle holds a 29 percent stake, rose this morning on speculation that Nestle will use the Alcon proceeds to buy the rest of the cosmetics giant. (MarketWatch)
Washington Mutual in line for $5 billion infusion
Private-equity firm TPG and other investors are nearing a deal to invest $5 billion in Washington Mutual, The Wall Street Journal reported. TPG would presumably get a seat on the troubled lender’s board. (Reuters) Washington Mutual, the largest U.S. savings and loan, has been hit hard by the mortgage crisis, losing about 74 percent of its market value in the past 12 months. Its shares rose more than 4 percent in German trading early today. (Bloomberg) The deal would keep CEO Kerry Killinger in control of the company. Washington Mutual had been in talks to sell itself to JPMorgan Chase until last week. (The Wall Street Journal)
Microsoft hands Yahoo! an ultimatum
Microsoft over the weekend said that Yahoo! has until April 26 to accept its $46 billion takeover offer, or it will launch a hostile bid at a lower price. Yahoo!, in a letter today, said it was not opposed to a deal in principal, but still believed that Microsoft’s offer “substantially undervalues” the company. (AP in Yahoo! Finance) To support its valuation claims, Yahoo! points to its rank as the No. 2 search engine and its growth operations in Asia. But clearly “Microsoft doesn’t want to spend a year negotiating, playing cat and mouse with the Yahoo! board, and another year to close this transaction to get all the regulatory approvals,” said Canaccord Adams analyst Colin Gillis. (Bloomberg)
Making a killing from death
Vidal Herrera had to quit his job in the Los Angeles County coroner’s office after suffering a back injury from moving a 284-pound suicide victim, so he went into private practice. Starting with a business offering private autopsies, DNA tests, and other forensic services, Herrera expanded into a successful second line of work offering his morgue and its accoutrements to TV and movie studios. Now he is also making couches from recycled damaged or used coffins. He’s doing so well that he often has to turn away business. “Death maimed me, death sustained me, and death motivates me,” he says. (Los Angeles Times, free registration)
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