Today was the 4th busiest business day in M&A history, and it left Wall Street reeling with merger madness. Although companies are spending more than ever to gobble up one another, they're also getting more bang for their buck. Click here to find out why.
Among today’s bigger deals, British pharmaceutical company AstraZeneca (AZN) said it would buy MedImmune (MEDI) for 15.6 billion. And Bank of America (BAC) announced it’s buying Chicago’s LaSalle Bank for $21 billion.
One of the components that makes these deals so attractive to investors is the “bid premium” or the mark-up one company is willing to pay to acquire another. Overall they are falling – and have fallen by nearly 1/3 since 1999. That gives the buyers a bigger bang for the buck.
Jeff Macke says the trade is not to short bad companies because they are take-out candidates. He adds Genesco (GCO) rejected a bid from Foot Locker (FL) today which tells him the market is not frothy.
Tim Strazzini believes this market is more valid than the market of the late '90's, when merger mania last swept Wall Street. Tim adds the difference stems from stronger balance sheets and business plans, especially those in the healthcare space.
Guy Adami says the play is the brokers and investment banks, and he likes Lazard Ltd. (LAZ) and Greenhill (GHL).
Eric Bolling says there’s a lot of money searching for a lot of return out there.
Dylan Ratigan says the bottom line is the take-over run today is more valid than that of 1999. While the headlines may be reminiscent the environment is distinctly different.
Questions? Comments?
Trader disclosure:
On APR 23, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders. Strazzini Owns (EWG), (MER), (NBG), (SNDK) Bolling Owns (NMX), (SZE) Natural Gas, Corn, Gold, Silver; Bolling Is Short Soybeans