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

Rumours regarding a potential acquisition have reportedly left analysts scratching their heads.
The post Rationale behind CSL (ASX:CSL) acquisition play not ‘immediately apparent’: Macquarie appeared first on The Motley Fool Australia. –

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.

The post Rationale behind CSL (ASX:CSL) acquisition play not ‘immediately apparent’: Macquarie appeared first on The Motley Fool Australia.

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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.

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