Argus: Bioverativ Shares Fully Valued After Sanofi Buyout Offer

Bioverativ Inc BIVV agreed to be acquired by Sanofi SA (ADR) SNY in an $11.6-billion all-cash deal, with the offer price valuing each of Bioverativ shares at $105. The offer price represents a 64-percent premium to Bioverativ's closing price prior to the deal announcement. 

The deal, announced Jan. 22, is expected to close within three months.

Bioverativ shares rose 64.40 percent on Jan. 22 in reaction to the news.

The Analyst

Argus analyst Jasper Hellweg downgraded the shares of Bioverativ from Buy to Hold.

The Thesis

Bioverativ shares are trading at 30.8 times Argus' 2018 earnings per share estimate, well above the 18.8 times, on average, for the peer group, including Biogen Inc BIIB, Celgene Corporation CELG and Amgen, Inc. AMGN, Hellweg said in a Wednesday note. (See the analyst's track record here.) 

The shares have run up 85 percent since Argus's September upgrade, including the solid jump following the Sanofi offer, Hellweg said.

A Hold rating is now appropriate given the strong run-up and the forthcoming acquisition, according to Argus. Shares are fully valued at today's levels, the firm said. 

The Price Action

Bioverativ shares, which were up about 52 percent for the past year until the Sanofi deal announcement, were down 0.11 percent at the time of publication Wednesday morning. 

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