Sunday, April 22, 2007

Hit #163 (MedImmune)

MedImmune (MEDI) is being bought by AstraZeneca for $15.6 billion in cash. The offer, of $58/share, represents a gain of 136% over my average cost of $24.61.

AstraZeneca is grossly overpaying in this deal. On the bright side, at some point in the not-so-distant future, AstraZeneca will severely disappoint investors due to costs and failure to realize gains - that will be a good time to buy AstraZeneca shares. The stock has an attractive yield already, but it will be even more juicy on a substantial pullback. I will be sure to post when that happens.

MedImmune has been a target of activists, most notably Icahn. This will be a payday to remember for him!

Not too long ago, AstraZeneca also overpaid in a deal for Cambridge Antibody (Hit #96). The deal flow in this sector is not going to subside anytime soon.

Previous hit - OMI (#162)


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