Cash only, please

Stock is often the currency of choice in life science acquisitions, as CEOs like to leave the cash untouched to ensure they have enough working capital to fund the combined entity. But Cephalon Inc. is forking over $450 million in cash for Group Lafon, even though CEPH's shares have had a great run of late, and are within spitting distance of its 52-week high of $73.92 hit on July 3.

CEPH said it was talked out of doing some or all of the deal in stock by Lafon shareholders, who wanted an all-cash transaction. According to CEPH spokesperson Robert Grupp, the shareholders of Lafon - which is largely family owned - were skittish about owning stock in a publicly held company following the Sept. 11 attacks. ...