M&A

To counter a lawsuit, Bristol-Myers outlines how the big Celgene buyout will shower $187M-plus on Morgan Stanley

Anyone looking to see why investment bankers love big time M&A so much should check out Bristol-Myers Squibb’s new SEC filing Thursday evening.

In the leadup to its megamerger with Celgene, the pharma giant has been peppered by a slate of lawsuits from unhappy investors. And to counter one that threatened to possibly delay their deal— now facing a crucial shareholder vote next week that Bristol-Myers is widely expected to win — the Bristol-Myers team spelled out the $187 million-plus in fees they’re paying to Morgan Stanley, which offered their opinion on the fairness of the buyout pact — from the Bristol-Myers perspective only.

Morgan Stanley’s advisory services and fairness opinion is worth $82 million — $15 million of that up front and the rest when the deal goes through. Morgan Stanley is also handling part of the financing as well as liability services, which nets them a cool $100 million. Then there’s $5.3 million for an interest rate swap option.

Their fairness opinion related only to what Bristol-Myers was paying. And here’s what they said:

Based on and subject to the foregoing, we are of the opinion on the date hereof that the Consideration to be paid by the Buyer pursuant to the Merger Agreement is fair from a financial point of view to the Buyer.

There’s more money to come, but the payback can’t be calculated yet. Bristol-Myers has set up Morgan Stanley to act as a dealer in an accelerated share repurchase program for after the deal closes. But that has yet to happen. And then Bristol-Myers also indemnified Morgan Stanley for any liabilities that could arise as a result of their participation.

However the shareholders make out in this deal, and there are clearly many aside from their lead investor Wellington who are none too happy, Morgan Stanley will do fine. In case you were wondering.


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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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