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Credit Suisse: Medivation Could Be Worth $54 To $75 In Takeout, But Management Won't Sell

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After Wednesday's market close, news reports suggested that Medivation Inc (NASDAQ: MDVN) had hired bankers to defend the company against acquisition.

Credit Suisse’s Kennen MacKay maintained an Outperform rating on the company, while raising the price target from $48 to $49.

Related Link: Reports: Medivation Has No Plans To Sell Itself

Acquisition Analysis

MacKay mentioned that while the company had become an acquisition target following the pullback in its stock valuation, management does not appear to be interested in selling, citing his team's own "conversations" with company executives.

Following an acquisition scenario analysis of companies that have expressed interest in acquiring U.S. oncology firms, MacKay stated Medivation could be worth $54-$59 in terms of operational synergies and $60-$75 with leveraged tax benefits.

Potential Synergies

The analyst pointed out that Medivation's product and pipeline portfolio would offer synergies for Sanofi SA (ADR) (NYSE: SNY), AstraZeneca plc (ADR) (NYSE: AZN) and Roche Holding Ltd. (VTX: ROG).

“However, given MDVN’s manufacturing and intellectual property is already domiciled in the US, it is unclear whether tax advantages could be leveraged in a deal,” MacKay noted.

Latest Ratings for MDVN

Sep 2016SunTrust Robinson HumphreyTerminatesNeutral
Aug 2016BMO CapitalMaintainsMarket Perform
Aug 2016CitigroupDowngradesBuyHold

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Posted-In: Credit Suisse Kennen MacKayAnalyst Color Long Ideas Price Target Analyst Ratings Trading Ideas


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