HALISTER: Shire Weakness Linked to Baxalta Placing, Baxter Debt Swap

Shire Weakness Linked to Baxalta Placing, Baxter Debt Swap

(Bloomberg) -- Shire down as much as 4.4% as risk arb funds who received stock in the Baxalta placing yesterday are now selling Shire shares as a hedge, Olivetree’s Sebastian Greensmith says by phone.
  • "We’ve seen elevated volume in Shire already so people have been pre-positioning their hedges": Greensmith
  • Yesterday Baxalta announced a placing of $2.3b of stock, 61m shares, linked to a debt-for-equity swap by former parent co. Baxter
    • Baxter will exchange the shares of Baxalta for Baxter debt currently held by JPMorgan, BofA Merrill Lynch, Credit Suisse, UBS
    • Baxalta is not selling any shares, will not receive any proceeds from the stock offering or the debt-for-equity exchange
    • Following this debt-for-equity swap, Baxter’s stake in Baxalta will fall from ~13.8% to 5.1%
  • NOTE: Placing of 61m shares is cacluating using reference price of $38.13 in Baxalta, yesterday’s close
    • Baxalta offering was first announced on March 11
RELATED:
  • Shire to Combine With Baxalta, Sees Deal Adding to 2017 Adj. EPS
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
BXLT US (Baxalta Inc)
BAX US (Baxter International Inc)
SHP LN (Shire PLC)

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