BioRegnum: The fog of M&A. What constitutes a legit buyout ‘scoop’ these days?

Print 23 August 2016
John Carroll / ENDPOINTS

The competition between Reuters, Bloomberg and the Wall Street Journal to break the next big M&A story keeps lowering the bar on what qualifies as a significant new move in the bidding process.

Reuters is off and running with one of the latest scoops, reporting that Merck has joined a groupof at least five companies that have “submitted indications of interest” for Medivation. There’s no clear idea just what that means, or where Merck $MRK might fit in the auction after Sanofi went public with its last offer. But we’re all talking about it.

Bloomberg followed up with a report that Retrophin is “considering the acquisition” of Raptor Pharma. That story followed a report from Intereconomia that Shire was looking to buy Raptor $RPTP for around $800 million.

The market loves a good rumor and they’ll take what they can get. Raptor shares are up 20%. Medivation stock popped as well. On Wall Street, where there’s smoke, there’s a trading opportunity.

Not surprisingly, there’s often less to these stories than what meets the eye. Allergan just had to carefully disentangle itself from a reported rumor (from the Wall Street Journal, no less) that it was in the hunt for Biogen, with Merck by its side. It turns out that may have been little more than some casual chatter among execs. No bid ever materialized – at least not yet – but it made for a good story for a day.

I know, I wrote it up.

We’re in the dog days of summer, and there are plenty of reasons for traders and companies to gin up a quick and profitable trade with some strategic rumors built around little more than a smile and a nod. Or less.

Some of this chatter may actually turn out to be important. But I wouldn’t mind if Reuters and Bloomberg set some higher standards on these stories. Being first in the battle of the terminals doesn’t trump the importance of being right. That’s the service they’re selling.

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