Pfizer (PFE) Taps Bond Market for $5 Billion to Fund Metsera Acquisition
Pfizer Inc. (PFE) is returning to the U.S. debt markets with a fresh corporate bond offering aimed at raising at least $5 billion, Bloomberg reported. The proceeds will help fund its recent acquisition of Metsera Inc., a biotech startup focused on obesity treatments.
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Earlier this month, Pfizer agreed to acquire Metsera for up to $10 billion, beating out Danish rival Novo Nordisk (NVO) in a competitive bidding war.
Metsera is seen as a promising player in the fast-growing obesity drug space, a market expected to exceed $100 billion globally by the end of the decade. Also, PFE aims to diversify its portfolio following the decline in demand for its COVID-19 products.
Multi-Tranche Bond Deal
The pharmaceutical giant plans to issue the bonds in as many as seven tranches, with the longest-dated 40-year notes expected to price at a yield premium of about 1.25% over U.S. Treasuries.
The deal is being marketed as a benchmark offering, which signals strong investor interest and broad distribution.
The offering comes amid an active week for the investment-grade bond market. Pfizer is one of nine issuers tapping the market on Tuesday. This follows Amazon’s (AMZN) $15 billion bond sale, which led a busy Monday that saw $26.3 billion in total high-grade bond deals.
Is Pfizer a Buy, Sell, or Hold?
Turning to Wall Street, PFE stock has a Hold consensus rating based on four Buy, 10 Holds, and one Sell assigned in the last three months. At $29.08, the average Pfizer stock price target implies a 15.26% upside potential.
