Yesterday, June 16, was Bloomsday. Bloomsday was first celebrated in Dublin in about 1954 and then in London. On Bloomsday 1956, Ted Hughes and Sylvia Plath were married, not a good omen. In Geneva, to which Joyce fled after Trieste became unsafe, and where he died, the local Bloom's Tavern celebrated June 16 annually starting in the 1970s.

We are thinking seriously about Ireland because its attractions as a corporate headquarters is becoming notorious. Today Medtronic, a US firm from Minneapolis announced that it would buy Covidien plc, its Irish-incorporated fellow maker of medical devices for a 30% premium over Friday's closing price. MDT will help pay this huge premium by “inversion”, using a foreign takeover to move to a lower-tax jurisdiction. Ireland has a 15% corporate tax rate while the US rate is 35%. The merger, according to Bangladesh-born MDT CEO Omar Ishrak, will be to allow MDT to cut costs, being nipped by hospital penny-pinching under Obama-care and new medical device taxes to fund it.

It will also give Medtronic access to its $14 bn offshore cash pile of profits kept overseas which would be taxed if it was repatriated to the USA.

Some pundits think corporate taxes should be abolished or not imposed when companies bring home the cash stash from overseas. This is not what Adam Smith wrote in The Wealth of Nations. Smith argued that governments charter companies in return for revenues and fees. Governments must control and and supervise their operations. Smith worried about the disconnect between shareholders and the company managers fearing managers would waste money. He wrote that if companies become too large, they would distort markets with monopolies or resource mis-allocation. To stop this, he wanted government regulation.

Smith thought taxes were used too often to protect the rich and subsidize monopolies, the basis for his anti-tax positions. Taxes and regulatory intervention can keep competition working against companies that grow too large.

Neue Zuericher Zeitung reporter Christiane Hanna Henkel wrote today (my translation) that these inversion deals may not survive for long, although I think she is deluding herself.

“Only last week the EU Commission said it was examining whether supposedly Irish subsidiaries of Apple are include 'prohibited state aid' [under article 85 of the founding Treaty of Rome]. And in the US corporations engaging in aggressive tax 'optimization' have come under attack. CEO Tim Cook was summoned before a Congressional Committee to explain the tax consequences of its Irish arm.

“If an agreement on tax reform is reached in the US Congress, the window for inversions could close. In late May a group of Democrat Senators proposed a bill which would impose a 2-year moratorium on inversions.”

Covidien and its spunoff Mallinkrodt (MNK, sold) which also parlayed its Irish site of incorporation into a deal, both relics of Tyco, grafted together by Dennis Kozlowski. Kozlowski's shower curtain and solid gold umbrella stand surely are what Adam Smith meant by “negligence and profusion”. The firm was divided into three. A successor, Swiss Tyco International, did an early inversion deal withBrink's Home Security which merged into its ADT division which NZZ's Ms. Henkel did not mention.

More follows on Ireland, Canada, Israel, Britain, India, Pakistan, Singapore, and Japan.

*Medtronic is proposing to pay $49.2 bn for Covidien and the share was briefly up 35.4% this morning to $97.50. It is now $86, up only 19.4%.

As you know I sold half my COV holdings on Friday for the comparative pittance of $72.03. My reasons for selling were normal fundamental analysis. COV revenues failed to grow in the most recent quarter, while inventories rose sharply. COV's piddling 1.8% mini-dividend was taking nearly 57% of profits. Its margins were high for the industry and vulnerable, so earnings might fall even if sales held up. COV is adored by analysts but with an average target price of $79, under 10% over my sale price.

Moreover, COV charts were alarmingly bearish with the 50-day moving average falling.

Analyzing MDT is not much more bullish. It had a lower trailing p/e ratio (both pre-deal), 20.8x vs COV's 21.2. It also paid out 1.8%. But its net margin was much lower at 9.8% of sales vs COV's 17%.

Since I already own MDT in my US portfolio I am hanging on to the rest of my COV.

MDT proposes to pay $35.19 in cash and 0.956 MDT shares per COV share. I may sell or short my MDT in the interval but since this is not part of the model portfolio it is purely my business. The two companies have few overlapping products so the takeover will not hurt competition.

Inevitably a batch of lawyers are investigating whether COV and its board should have asked for more. CRT Capital (of Stamford CT) already says COV is now fairly valued at $86, whereas earlier it was a buy. Having sold half I am waiting for $97.5.

*New Ireland Fund, according to John Cole Scott of Closed-end Fund Advisors, plans to pay out a regular quarterly cash dividend set annually, starting with 2% of net asset value as of July 31. The idea is to cut the discount from NAV with an annual yield of 8%. More on funds below. IRL.

*With its price down sharply just in time for the World Cup, I am buying morePaddy Power Plc at under euros 48.50 or $65.9. The euro is down too. As already reported, British brokerage Daniel Stewart & Co., whose research I get, rates PDYPF a buy. As also already noted, it had a nearly flat profit in 2013 despite 12% higher revenues, because the wrong horses won.

Since Paddy went public in 2001 its revenues have risen 25%/year, its EPS 30%/yr and its divvies 33%/yr. It has a strong brand, and avoids the worst pandering to gambling addicts. It has moved smartly into mobile and social media markets for betting. From its Irish base it is active (of course) in Britain, and also Australia, Italy, and – to come – the USA once sports betting is legalized here.

Like fellow-Irish stock Ryanair, it features brash ads aimed at the Brits. It is telling them even if the UK team loses its opening match it just may repeat its World Cup victory despite this (as it did in 1966.) It also boosts The Hereditary Enemy, Germany, another dark horse, with horrendous puns. I think the high pound will turn into higher profits when converted into Irish euros, another angle for buying. 

*After that badly timed sale of half my COV, I am holding back on exiting Canadian Solar, CSIQ. It too worries the analyst and has gained hugely. But

 *A US share I own, Uranerz (NYSE-URZ) has begun shipping to Cameco's processing factory uranium resin form URZ's Wyoming Nicols Ranch in-situ recovery mine. CCJ also operates in WY. In site recovery extracts uranium by injection of groundwater with oxygen, baking soda, and carbon dioxide to dissolve the uranium into a liquid. It only works if the aquifer containing the uranium is enclosed. I am a nuclear booster.

 *Post the 2010 spinoff, GlaxoSmithKline owns 18% of Convergence Pharmaceuticals, which has discovered and new pain-killer and may float on the London Stock Exchange. The drug works against a form of facial pain called Trigeminal neuralgia, according to the Financial Times.

 *Compugen disclosed positive results for a new immune checkpoint for cancer immuno-therapy, CGEN-15052 which inhibited T-cell activation as both a membrane protein and as a Fc fusion protein in cancer tissue samples, above all of epithelial lung cancer. CGEN, an Israeli female-headed company, also disclosed discovery of 2 new B7-like immune checkpoint candidates for further research in addition to the 9 discovered earlier. It initially uses algorithms and databases to find interesting targets and then tests them in cancer tissues. The next step is to go to human trials, usually until now with a drug company partner.

While I am not sufficiently savvy in immuneo-therapy to judge how important this is, note that CGEN is up over 10% on the news.

 *Bank of Nova Scotia is using some of the CI Financial (CIFAF) proceeds to buy the remaining 40% of Aurion Capital today. Aurion offers funds for private clients and institutions to invest in Canada equities, fixed income and real estate LPs, plus a mutual fund group for those with less money.

 *Although I am not being allowed to buy new Veresen shares at discount (suffering because I am an American) the stock is up nicely to over US$17 as the buy-in period begins at FCGYF, a power company and operator of pipelines and port facilities on the West Coast fed from Alberta's fields. It is at a new US high.

 *Now that the US re-listing as Performance Sports Inc. is well underway,Bauer, BRRPF, is up 9%.

 *DeNA Co, DNACF, is over $14 in US trading today, still gaining from MyCode, its diversification move away from video and mobile gaming to genetic testing in Japan. The new service starts by end-July. The Tokyo share is down 3.79% today. The share is trading at 8.7x earnings, and I think it still is a potential takeover candidate. Moreover it is feeding its e-commerce money-making arm with the new gene tests, shopping sites, payment services (result of its own global payroll needs), a travel agency, and of all things, a pro baseball businesses. As a female-heading business it is far more flexible than a normal Japanese company of its size, 1.3 trillion yen.

As reported, it had a rotten FY 2013-4 which ended Mar. 31 with Q4 revenues down 24% to Y39.8 bn ($391 mn) and profits off 47% to 9.7 bn yen. Full year sales came to Y181.3 bn and profits to Y53.2 bn, showing that the rot is continuing. But its new business strategy which hardly had hit quarterly results currently, should pay off later in the current FY.

Our man in Japan, Chris Loew, is working on this but I am antsy about investing my proceeds from the stupid COV sale and another one I doing in my US account, ofWilliams Cos.

Fund notes follow:

 *Ascendas India Trust, of Singapore, which invests in Indian corporate and commercial real estate in 3 cities finally rose. It is a fave of non-resident Indians here in NYC and elsewhere. At 65.5 cents per share (US), up over 9% it is at a new high, a final confirmation of the appeal to NRIs of the Modi victory. It yields 5.8%. 

*Also up (to my surprise) is X DB MSCI Pakistan ETF, now over $16 (HK).

 *Lazard Asset Mgm., the US arm of the global financial firm started in Paris in 1848, will offer a new open end fund investing in emerging markets for income, LEIIX-Q, Lazard Emerging Markets Income Portfolio. Launching today, it seeks capital appreciation and income by short-term opportunistic investing in some scary but low-correlation and low-volatity currency and debt markets. The fund will provide useful diversification and a place to keep cash. It aims to identify “idiosyncratic macroeconomic factors, policy variables, and market inefficiencies. There is another version of the fund for institutions and the private placement arm has been operated since 2011 by mangers Ardra Belitz and Ganesh Ramachandran. This is a way to play beaten-down emerging markets. It is not a portfolio pick as we don't do open-end funds.