Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, August 7, 2015

Article Excerpt

BAXALTA INC., $37.60, New York symbol BXLT, makes vaccines and drugs in three main areas: hematology (blood diseases), immunology (immune system) and oncology (cancer). On July 1, 2015, Baxter International (New York symbol BAX) spun off Baxalta as a separate firm. Investors received one Baxalta share as a tax-deferred dividend for every Baxter share they held. Baxter still owns 19.5% of Baxalta and plans to sell or distribute these shares within five years. The stock jumped 14% this week in response to an unsolicited, all-stock takeover offer from Ireland-based Shire plc (Nasdaq symbol SHPG), a maker of drugs for rare and life-threatening diseases. Under the proposal, Baxalta investors would receive 0.1687 of a Shire American depositary receipt (ADR) for each share they hold. That would give Baxalta shareholders 37% of the combined company. Baxalta investors would only become liable for capital gains taxes when they sell their Shire ADRs. Based on current prices, Shire’s offer is worth $42.15 per Baxalta share, which is 12.1%…