Curiosity may have killed the cat, but that didn't keep a team of Wall Street Journal reporters from getting unnamed sources to spill the beans about Pfizer's (NYSE: PFE) plans for its animal-health division. The pharma giant announced earlier this month that it planned to dispose of the unit, along with its nutrition business.

According to the Journal, Pfizer is leaning toward spinning off its animal health division, rather than selling the unit to the highest bidder. A sale would have tax implications for Pfizer, but the real problem here is likely the company's inability to sell the unit as one big package. A lot of animal-health products that only have two or the three competitors. If any of Pfizer's competitors wanted to buy the unit, antitrust regulators would likely make them shed products of their own.

Pfizer had that problem when it bought Wyeth. And Merck (NYSE: MRK) and Sanofi (NYSE: SNY) had to disband their attempts to make a joint venture from their individual units, because of the overlap.

Giving investors shares of a spinoff would likely be a tax-free event and solve the antitrust issue, but it doesn't allow Pfizer to gain any cash. The company has about $24 billion in cash and short-term investments, but large pharmas can never have too much cash to go hog-wild with licensing deals. And let's not forget that Pfizer has $35 billion in long-term debt.

One solution would be to follow the path Bristol-Myers Squibb (NYSE: BMY) took with Mead Johnson Nutrition (NYSE: MJN). The spinout was actually an IPO where the company sold shares in its nutrition business. Later it allowed shareholders to transfer shares in the pharma for shares in Mead Johnson.

The unnamed sources are often right. But until you hear it from the horse's mouth, it's probably best not to make any investment decisions based on rumors.

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