Serono: The whole vs. the parts

When Serono S.A. last week disclosed it had enlisted Goldman Sachs to find "strategic alternatives," the most prevalent assumption was that the Swiss protein drug company would be acquired by a pharmaceutical company. But there is another alternative - a private equity buyout. Which route is best for the company's shareholders - basically, the Bertarelli family - depends in part on whether SEO's value is greater in parts or as a whole.

There's a pretty good argument to be made for selling the parts, as Serono (SWX:SEO; SRA, Geneva, Switzerland) has disparate marketed products, a pipeline that covers multiple therapeutic areas, and manufacturing capabilities, all of which could be repackaged and sold separately, after cost centers such as R&D and administrative functions were stripped out. ...