Bloomberg says Pfizer
Reuters quotes the pharma giant's CFO, Frank D'Amelio, as saying that no decision has been reached yet.
I say don't worry about it.
The company already said it plans to get rid of its nutrition and animal-health business, but the structure of the divestment -- sale or spinout -- is still up in the air. If you're most interested in the long-term health of the pharmaceutical business, I think a sale is the best bet. The more cash firepower Pfizer has, the easier it'll be to restock its pipeline through licensing or acquisition deals.
But there are complications with a sale. First and foremost, you've got to find a buyer at a reasonable price. That might not be too hard for the nutrition business. Abbott Labs
For the animal-health business, it could be trickier. There are various products for all the different farm animals and pets, and there are often only a couple of players selling each product, creating an antitrust nightmare for potential buyers. Merck
Pfizer could IPO the assets; essentially, sell the divisions to new shareholders like Bristol-Myers Squibb
The biggest knock on a sale or IPO versus a straight spinout where every investor gets shares of the spinout is that the latter is usually tax-free for investors. If you're planning on holding onto both companies, it could be the best choice Pfizer could make (even if the company doesn't get any cash in the process).
Ultimately, you'll just have to wait for the number crunchers to finish their job and a decision to be made. Management has a fiduciary duty to do what's best for investors, so you'll just need to trust that they'll do the right thing. And if you don't, why do you own shares?
