B+L sale would be ‘very positive’ for Bausch Health, says Jefferies

After Financial Times reported that Bausch + Lomb (BLCO) is exploring a sale, Jefferies analyst Glen Santangelo said the pathway to a B+L spinoff has been “murky given the questions around RemainCo’s balance sheet” and thinks a sale would be “a very positive outcome” for Bausch Health (BHC) shareholders. While unclear if a sale can get done at an acceptable price, “even conservative assumptions” for a sale would bring in “substantial proceeds” for Bausch Health and enable the company to recapitalize, argues the analyst, who ultimately thinks a sale of B+L would be positive for both equity and debt holders of Bausch Health given the re-capitalization. The firm continues to view the separation of Bausch + Lomb as accretive for Bausch Health shareholders, whether executed via spinoff or sale to a strategic buyer, and maintains a Buy rating and $9 price target on the latter’s shares.