The  CSL Limited (ASX: CSL) share price has risen strongly over the past 12 months. It rose from $211.42 last June to $341.00 in mid-February this year. It then declined sharply in the first month of the coronavirus crisis to mid-March. However, after a strong rally to mid-April, where it regained most of its losses, its share price has been on a downward trajectory again.

CSL is also playing an important role during the pandemic.  It has recently entered into a new agreement to accelerate the development of a COVID-19 vaccine candidate.

With all this in mind, is the CSL share price a buy right now?

An amazing Australian success story

Although the CSL share price has lost some recent ground, its long-term returns to shareholders have been amazing.

It has risen from a split-adjusted price of 76.6 cents back in 1994 to now be trading at $284.10. So if you had invested $10,000 back in 1994, that investment would now be worth a staggering $3.71 million!

CSL has evolved from a modest federal government department back in 1994, to become the largest company on the S&P/ASX 200 Index (ASX: XJO). It now has a market capitalisation of $129 billion.

The company has become a global market leader in blood plasma research and disease treatment, now reaching more than 60 countries.

High investment in research and development to create new products is a key factor underpinning its success.

CSL’s P/E ratio is high. Is this a reason not to invest?

CSL’s P/E ratio is 44.09. That significantly higher than the ASX market average which is around 18. However, due to CSL’s strong market differentiation and strong growth potential, I don’t think this is an issue. In addition, over the past 10 years, CSL’s P/E ratio has always been above the market average, yet its share price has continued to climb!

A similar trend has been evident over the past decade with other top Australian growth shares. These include: REA Group Limited (ASX: REA), Carsales.Com Ltd (ASX: CAR) and Seek Limited (ASX: SEK).

So, is the CSL share price a buy?

The CSL share price has been trending downwards since April. However, there doesn’t appear to be any obvious reason for this trend. In fact, despite no recent announcements, CSL’s latest business performance continues to appear quite strong. And, with its share price well below its 12-month peak in February, I think now offers a reasonable buying opportunity for long-term investors.

I believe that CSL remains well-positioned to continue delivering strong earnings growth over the next 5–10 years. It continues to have a strong new product development pipeline. There is also likely to be a steadily increasing global demand for immunoglobulin products over the years to come.

More reading

• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher
• Why a2 Milk, Carsales, Fisher & Paykel Healthcare, & Starpharma are surging higher
• Carsales share price up 5% following solid trade update
• Why I would buy CSL and these ASX blue chip shares
• Here are 2 top ASX tech shares for your portfolio

Phil Harpur owns shares of carsales.com Limited, CSL Ltd., REA Group Limited, and SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended carsales.com Limited, REA Group Limited, and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Infigen Energy Ltd (ASX: IFN) share price is climbing today after the company disclosed a takeover offer from a global energy leader. At the time of writing, Infigen shares have jumped 9.15% to 89.5 cents.

Today’s announcement follows a takeover bid from UAC Energy at the beginning of June, which sent Infigen shares flying. UAC made an offer of 80 cents per Infigen stapled security, which represented a 35.59% premium to the previous day’s closing price at the time of the announcement.

When news first broke of UAC’s offer in early June, the Infigen board advised investors to take no action. The board reiterated this recommendation in a further ASX release last week.

Why is the Infigen share price spiking?

This morning, Infigen announced it has entered into a bid implementation agreement with Iberdrola Renewables Australia. Under the agreement, Iberdrola will make an off-market takeover bid for Infigen at a cash offer price of 86 cents per stapled security. This represents a 7.5% premium to UAC’s offer of 80 cents.

In conjunction with the bid, Iberdrola has entered into a pre-bid agreement with Infigen’s largest security holder, TCI Funds, to purchase 20% of Infigen stapled securities.

Iberdrola is a major player in the global energy space. It is the number one producer of wind power and one of the world’s biggest electricity utilities in terms of market capitalisation.

Unlike the takeover play from UAC, Infigen’s board unanimously recommends that security holders accept the offer from Iberdrola. 

According to today’s release, Iberdrola’s offer is less conditional than UAC’s offer. This includes not being subject to the due diligence and disclosure conditions contained in the UAC offer.

As for the next steps, Infigen expects Iberdrola to lodge its bidder’s statement with the ASX and ASIC shortly. Following this, Infigen will dispatch its target’s statement for the Iberdrola offer to security holders “as soon as practical”.

2H20 distribution scrapped

In addition to the takeover announcement, Infigen revealed this morning it will not pay a second-half FY20 distribution. The company noted that both takeover offers are on the basis of no distribution being paid with respect to this period.

In this way, Infigen stated the decision to not pay a distribution lowers the conditionality of the bids and provides more certainty for security holders.

More reading

• ASX 200 jumps 1.8%, Australian headed for recession
• Why Afterpay, Infigen, Qantas, & Zip Co shares are charging higher
• Infigen Energy share price rockets 36% higher following takeover bid

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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