The world's biggest generics firm may be about to get bigger--a lot bigger. Teva is reportedly in talks to buy Barr Pharmaceuticals for upwards of $5 billion; some reports quote a price as high as $7.5 billion. The latter figure would be a 50 percent premium for Barr, which closed the regular trading day at $46.82 but after hours leapt 19 percent to $55.51 on the news.
Reports of the negotiations appeared in two Israel dailies, and a UBS analyst issued a note ticking off reasons a Barr buyout would make sense for Teva: It would give the Israeli company access to the oral contraceptive market, strengthen its European presence and boost efficiencies by "eliminating duplicate infrastructure in the U.S."--which sounds like shutdowns and layoffs to us, but given the fact that no deal's been struck, that's getting the cart before the horse.
This year Teva's already announced a buyout of Bentley Pharmaceuticals, which has a strong presence in Spain, and a deal for CoGenesys, a biotech. Though the company is sitting on some $3.6 billion in cash, a whopper Barr deal would require it to take on more debt and do some kind of equity payment, too, an Israeli investment bank predicted. Teva refused to comment on "market rumors."