Rationale behind CSL (ASX:CSL) acquisition play not ‘immediately apparent’: Macquarie

Rumours regarding a potential acquisition have reportedly left analysts scratching their heads.

| More on:
A man scratches his head, a little bit confused.

Image source: Getty Images

The CSL Limited (ASX: CSL) share price is slipping amid reports a major broker has questioned why the company would go ahead with a potential $10 billion acquisition, citing “limited obvious product alignment”.

It follows last week’s rumours that CSL is looking to acquire Swiss company, Vifor Pharma.

At the time of writing, the CSL share price is $291.19, 2.18% lower than its previous close.

For context, the broader market is mixed this morning. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.01% while the All Ordinaries Index (ASX: XAO) has slipped 0.03%.

Let’s take a closer look at today’s reports on the biotech giant.

CSL share price struggles amid acquisition confusion

The CSL share price might be being weighed down by Macquarie Group Ltd (ASX: MQG) analysts’ confusion over a potential major acquisition.

According to reporting by The Australian, a broker’s note sent to Macquarie clients – written by analysts David Bailey and Rachel Harwood – stated the rumoured purchase could be “financial accretive” for the company, but the strategic reasoning behind it is unclear.

Vifor Pharma is aiming to be a global leader in iron deficiency, nephrology, and cardio-renal therapies. It works to discover, develop, and manufacture pharmaceutical products.

The publication claims the analysts think, if the acquisition goes ahead, it could mean an earnings boost of around 5 cents per CSL share before synergies.

The company responded to the rumours last week, saying it regularly looked for strategic opportunities to improve its business. However, it noted there was no certainty it would be undergoing any kind of merger or acquisition activity.

The CSL share price dipped 2.5% on Friday when it fronted the acquisition talk.

Additionally, Vifor Pharma responded to “market speculations” on Friday, saying it “systematically reviews options that can strengthen its market position and/or accelerate the growth of the company”. Such options include both partnerships and acquisitions, which it doesn’t comment on.

The Australian has also reported CSL has tapped the Bank of America to undertake a capital raise. It’s said to be set to bolster its coffers by between $4 billion and $5 billion.

The company hasn’t responded to that claim.

Should you invest $1,000 in CSL right now?

Before you consider CSL, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and CSL wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Two scientists in a Rhythm Biosciences lab cheer while looking at results on a computer.
Healthcare Shares

Imugene (ASX:IMU) share price leaps 10% on new Roche deal

Key Points Imugene shares rocket on back of new supply agreement with Roche Clinical trial of PD1-Vaxx will be combined …

Read more »

Lab technician analyses a sample in a laboratory for a clinical trial
Healthcare Shares

Race Oncology (ASX:RAC) share price rises following preclinical discovery

Key points The Race Oncology share price is up as high as 2.8% today A new discovery relating to heart …

Read more »

shocked man with hands over his face with a declining graph in background representing falling CleanSpace share price
Healthcare Shares

Why the AnteoTech (ASX:ADO) share price is plummeting 23% on Friday

Key Points AnteoTech shares sink on additional request for information by the TGA The company submitted a performance report last …

Read more »

Group of Imugene scientists cheering in the lab after the company received another patent for HER-Vaxx
Healthcare Shares

Why the Imugene (ASX:IMU) share price advanced 5% on market open

Key points Imugene share price soared 5% on the back of European patent approval This is further intellectual protection for …

Read more »

A healthcare worker wearing a white coat holds his fingers to his mouth looking worried as healthcare stocks like Cochlear crash today
Earnings Results

ResMed (ASX:RMD) share price on watch after Q2 update disappoints

Key points ResMed delivered solid revenue and profit growth in the second quarter A major competitor product recall boosted demand …

Read more »

Lab worker puts hands in the air and dances around
Healthcare Shares

Here’s why the Rhythm Biosciences (ASX:RHY) share price soared 8% today

Key points The Rhythm Biosciences share price finished the day up by more than 8% after earlier jumping by 19% …

Read more »

gloved hand holding covid-19 vaccine against backdrop of australian flag
Healthcare Shares

Own CSL (ASX:CSL) shares? Here’s why the company is moving on from COVID research

CSL Limited (ASX: CSL) shares are joining the broader ASX selloff today, down 3.93% to $248.20 per share. The S&P/ASX …

Read more »

Graph showing a fall in share price.
Healthcare Shares

Why is the Cochlear (ASX:COH) share price tumbling 5% on Thursday?

Key points Cochlear is one of the worst performing ASX 200 healthcare stocks on Thursday Right now, its share price …

Read more »