Eli Lilly's $6.5 billion buyout of ImClone [1] was greeted with great fanfare on Monday--by all but a few analysts who questioned whether Lilly's $70-a-share offer was a bit too rich for the times. Doubters suggested that the unprecedentedly tight credit markets might hinder Lilly's ability to raise $2 billion to $3 billion in financing. "These aren't ordinary circumstances," one analyst pointed out Tuesday in the New York Times.

At the same time, Moody's and Standard & Poor's said they'd be looking at Lilly for a possible debt downgrade. And now, a top stock analyst has downgraded the company. Catherine Arnold of Credit Suisse now rates Lilly "neutral;" before the ImClone deal, the drugmaker rated an "outperform." Her concerns? Possible overpayment for ImClone, for one. For another, if Lilly forks over billions of cash--and assumes billions in debt--to wrap up the deal, it may have to forego future acquisitions.

- read the item [2] at the NYT's DealBook blog

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