Shares in global biotech giant CSL Limited (ASX: CSL) edged lower today and finished more than 1% in the red at $305.23.
CSL held the fort across the day, with intraday prices trading in a narrow spread of $307–$308 before a large set of trades sent its share price as low as $301.11.
Rumours are circulating that the Aussie biotech is set to buy Vifor Pharma, a Swiss-based company, in a deal that could see CSL fork out $10 billion.
According to reporting from The Australian, CSL might be heading to the capital markets to raise additional equity capital to the tune of $3 billion–$4 billion.
Both CSL and Vifor have been in a game of verbal ping-pong with talks of the acquisition first circulating back in March this year. If the deal goes through, it would mark the CSL’s first major acquisition in over 10 years.
It is understood that Bank of America and Goldman Sachs are to be involved with the transaction, and both banks will nab a hefty fee from CSL’s capital raise if it is successful.
Vifor states that it aims to be a leader in iron deficiency, nephrology and cardio-renal therapies, with a focus on chronic disease.
It recognised 1.7 billion Swiss Francs in revenue in 2020 and has a market cap of 6.75 billion Swiss Francs ($10.33 billion). For comparison, CSL’s market cap is $140.88 billion.
Vifor itself has been busy on the acquisition trail as well, recently confirming it bought 100% of cardio-renal biopharma company, Sanifit Therapeutics on 22 November.
Curiously, former CSL non-executive director, Abbas Hussain – who resigned from CSL’s board in June this year – was recently appointed as the new CEO of Vifor Pharma.
Hussain joined the company on 16 August and will hold tenure as Vifor’s top executive after serving on CSL’s board for 4 years.
Without further clarification from CSL itself, it is unwise to make any speculation on the matter. However, CSL is well capitalised with over $8.3 billion in net assets – of which $1.8 billion is in cash on the balance sheet.
CSL share price snapshot
The CSL share price has climbed almost 1% in the past 12 months and almost 8% this year to date.
In the past week, it has slipped almost 4% but is in the green by 2% in the past month.