Cramers Says These 3 Big Deals Aided Monday's Market Rally: 'When Companies Start Buying Each Other At A Big Premium...'

Zinger Key Points
  • When companies start buying each other at a big premium, it tells you that stocks entirely may just be too cheap, Cramer said.
  • Amgen Inc. has agreed to buy Horizon Therapeutics at an enterprise value of approximately $28.3 billion.
  • Coupa Software entered into a definitive agreement to be acquired by Thoma Bravo in an all-cash transaction.

Prominent market commentator Jim Cramer said three corporate deals announced on Monday aided the rally seen at the beginning of the week, according to a CNBC report.

What Happened: “Mergers matter. When companies start buying each other at a big premium to what the market’s willing to pay, it tells you that stocks entirely, the whole market, may just be too cheap,” Cramer said, according to the report.

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Here are the deals that Cramer was referring to:

  • Amgen, Inc. AMGN has agreed to buy Horizon Therapeutics PLC HZNP at an enterprise value of approximately $28.3 billion, marking it the largest healthcare merger of the year. Shares of Horizon Therapeutics closed 15.49% higher on Monday.
  • Coupa Software Inc COUP entered into a definitive agreement to be acquired by Thoma Bravo in an all-cash transaction at an enterprise value of $8 billion. Under the terms of the agreement, Coupa shareholders will receive $81 per share in cash. Shares of Coupa soared 26.67% on Monday.
  • Weber Inc WEBR shares closed Monday’s session 23.23% higher. The company has entered into a definitive merger agreement by which investment funds managed by BDT Capital Partners LLC will purchase all of the outstanding shares for $8.05 per share. The total enterprise value of the deal will be $3.7 billion.

“Three deals in a regulatory environment that’s this hostile to takeovers? At that point, you need to get more positive on the entire asset class, because the acquirers are telling you these stocks have gotten too cheap to be ignored,” Cramer said.

He also pointed out that there are a "ton of stocks" the market has no appreciation for, and "we’re finding out that other companies, or private equity buyers, value them a lot more highly.”

Major Wall Street indices closed over 1% higher on Monday after last week’s subdued performance as investors brace for the release of the consumer price inflation data on Tuesday followed by the crucial Federal Reserve meeting outcome on Wednesday. The SPDR S&P 500 ETF Trust SPY closed 1.44% higher on Monday, while the Vanguard Total Bond Market Index Fund ETF BND closed flat.

Read Next: El-Erian Questions Fed's Over-Optimism About Inflation Easing: 'Horrible Forecasting' Or 'Bit Of Politics?'


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Posted In: M&ANewsSmall CapMarketsBDT Capital PartnersJim Cramerthoma bravo
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