Guest wellmont Posted June 17, 2014 Share Posted June 17, 2014 I would like the audio once it's finished.. Here you go (attached to this post). thank you. Link to comment Share on other sites More sharing options...
peter1234 Posted June 17, 2014 Share Posted June 17, 2014 Parts 4, 5 and 6 are now available ... http://brontecapital.blogspot.ch/ maybe they will quoted in next press release? ;D Link to comment Share on other sites More sharing options...
fareastwarriors Posted June 18, 2014 Share Posted June 18, 2014 Valeant Tries New Tactics to Woo Shareholders of Botox Maker Allergan http://dealbook.nytimes.com/2014/06/17/valeant-tries-new-tactics-to-woo-allergan-shareholders/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Mergers%20&%20Acquisitions&action=Click&pgtype=Blogs®ion=Body Link to comment Share on other sites More sharing options...
bmathews03 Posted June 18, 2014 Share Posted June 18, 2014 It's becoming obvious some people here are definitely outside their circle of competence. That's okay, just remember the market doesn't reward extra credit for attempting difficult things. Someone should create a new thread for people to argue the theories of accounting so we can stop cluttering up this thread with the same argument repeated to ad nauseam. I agree -- some people are outside their circle of competence. But, which people are you talking about? Both sides would accuse the other of that. Link to comment Share on other sites More sharing options...
Liberty Posted June 18, 2014 Share Posted June 18, 2014 http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Commences-Exchange-Offer-For-Allergan/default.aspx Valeant Pharmaceuticals International, Inc. ("Valeant") (NYSE: VRX) (TSX: VRX) today announced that it has commenced an exchange offer for the common stock of Allergan, Inc. ("Allergan") (NYSE: AGN), taking its May 30th proposal directly to Allergan stockholders. Under the terms of the offer, Allergan stockholders would be able to elect to exchange each of their Allergan shares for $72.00 in cash and 0.83 Valeant common shares, or an amount of cash, or a number of Valeant common shares, in each case subject to proration. The amount of the all cash and all stock elections would be determined prior to the expiration of the exchange offer and would be set so that the implied value of all three elections would be the same based on the average closing prices of the Valeant common shares during an averaging period described in the offering documents. The offer is scheduled to expire at 5:00 p.m., New York City time, on August 15, 2014, unless the offer is extended. Valeant expects to complete a second-step merger promptly following the consummation of the exchange offer in order to acquire the remaining Allergan shares. "We believe Allergan's stockholders should have the opportunity to express their views and we are confident that Allergan's stockholders will support this combination," said J. Michael Pearson, chairman and chief executive officer. "This offer, together with Pershing Square's ongoing efforts to call a special meeting of Allergan stockholders, is part of Valeant's clear path to complete a transaction with Allergan." Valeant also indicated it remains willing to provide shareholders with a contingent value right related to DARPin® sales if Allergan engages in negotiations to work out the exact terms. The offer is being made on the terms and subject to the conditions set forth in the offer to exchange, dated June 18, 2014, included in the registration statement filed with the Securities and Exchange Commission today. The conditions include removal of various anti-takeover obstacles that the Allergan board has the unilateral ability to remove, the tender of a majority of the total number of outstanding Allergan shares on a fully diluted basis and expiration or termination of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other applicable antitrust laws and regulations. The exchange offer is also conditioned on the vote by Valeant shareholders to approve the issuance of Valeant common shares in the acquisition, and Valeant will file a preliminary proxy statement with respect to a special meeting of Valeant shareholders promptly. Link to comment Share on other sites More sharing options...
saltybit Posted June 19, 2014 Share Posted June 19, 2014 latest from Hempton http://brontecapital.blogspot.com/2014/06/valeant-pharmaceuticals-part-vii-first_18.html Link to comment Share on other sites More sharing options...
original mungerville Posted June 19, 2014 Share Posted June 19, 2014 I don't see the issue with the revenue recognition thing that Hempton is citing. They clearly changed their sales tactics and got out of rebating / matching competitor promotions. The sales made to the distributor were final after these changes, and they raised prices. What's not clear about their response to the SEC - its very very clear. I don't see the issue. Link to comment Share on other sites More sharing options...
bmathews03 Posted June 20, 2014 Share Posted June 20, 2014 I don't see the issue with the revenue recognition thing that Hempton is citing. As I said earlier, credit to Hempton for putting some detail behind his argument to prove beyond a doubt that he is a clown. Link to comment Share on other sites More sharing options...
peter1234 Posted June 20, 2014 Share Posted June 20, 2014 Thought his view on $250M in pledged shares by CEO to cover taxes was interesting. (Discussed in part 5). CEOs have gotten in trouble with that in the past. Anyone have looked into this and have an opinion or people put this into the 'off-base' bucket as well? ;D Link to comment Share on other sites More sharing options...
bmathews03 Posted June 20, 2014 Share Posted June 20, 2014 Thought his view on $250M in pledged shares by CEO to cover taxes was interesting. (Discussed in part 5). CEOs have gotten in trouble with that in the past. Anyone have looked into this and have an opinion or people put this into the 'off-base' bucket as well? ;D Yeah, I put that into the "off-base" bucket. Pearson got a lot of shares worth a lot of money, and he needed to pay tax on that. He didn't have cash on hand to settle it, so he entered into this pledging agreement, blah, blah, blah... Hempton gets comical here when he says: "This seems unrealistic as most tax bills come only on the selling of those shares and a quarter of a billion dollars is a rather large pledge." HaHa! So an individual can accept shares and pay no taxes until they are sold? I don't know if that's the law in Australia, the UK or Narnia (wherever Hempton lives), but that's not the way the IRS works in the USA. If you get shares from your employer, you need to pay tax on it (and not just when you sell, you need to pay when you receive them). I've paid the tax for receiving shares in current and former employers -- and I'm a nobody receiving only a pittance in shares. But, I had to pay because everyone has to pay the IRS. I'm not sure why Hempton doesn't realize this -- perhaps its because he's a clown? Link to comment Share on other sites More sharing options...
original mungerville Posted June 21, 2014 Share Posted June 21, 2014 Brogalboy at his finest. He was always pretty good, but far from great. Link to comment Share on other sites More sharing options...
original mungerville Posted June 21, 2014 Share Posted June 21, 2014 Valeant is looking reasonably cheap right now if 1) you roughly agree that Ackman's adjusted earnings are the correct way to look at earnings, and 2) even without Allergan, they can grow north of 15% per year by simply using the earnings in 1) annually for bolt-on acquisitions at an IRR of 15-20%. This grows earnings north of 15% and also brings down the debt/equity ratio for Valeant over time. P/E of something like 13-14 right now based on adjusted earnings as per Ackman presentation. I can see a P/E of 15 on earnings twice this amount in 4-5 years if Allergan does not go through, or in 2 years if the Allergan deal gets done. So where is the downside? Link to comment Share on other sites More sharing options...
giofranchi Posted June 23, 2014 Author Share Posted June 23, 2014 New presentation to refute Allergan's misleading statements. GioAllergan_0623.pdf Link to comment Share on other sites More sharing options...
Liberty Posted June 25, 2014 Share Posted June 25, 2014 http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Files-Preliminary-Proxy-Statement-for-Special-Meeting-of-Shareholders-to-Approve-Share-Issuance-in-Proposed-Acquisition-of-Allergan/default.aspx LAVAL, Quebec, June 25, 2014 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. today announced the filing of a preliminary proxy statement for a special meeting of shareholders, at which Valeant shareholders will consider and vote upon, among other things, a proposal to approve the issuance of Valeant common shares in connection with an acquisition of Allergan, Inc. ("Allergan") (NYSE: AGN). Valeant commenced an exchange offer for the common stock of Allergan on June 18, 2014. "Today is another step forward in our pursuit of a combination with Allergan," said J. Michael Pearson, Valeant's chairman and chief executive officer. "Filing our preliminary proxy statement and holding a special meeting will give our shareholders a chance to show their support for our bid for Allergan and the value to be created in a combination with Allergan." Link to comment Share on other sites More sharing options...
Liberty Posted June 25, 2014 Share Posted June 25, 2014 Saw this on Twitter: The next chapter in Valeant / Allergan saga...according to Reuters, #HedgeFund Paulson & Co. takes 2% stake in $AGN & supports $VRX deal Link to comment Share on other sites More sharing options...
fareastwarriors Posted June 25, 2014 Share Posted June 25, 2014 Saw this on Twitter: The next chapter in Valeant / Allergan saga...according to Reuters, #HedgeFund Paulson & Co. takes 2% stake in $AGN & supports $VRX deal Hedge fund Paulson & Co has amassed a large stake in Allergan Inc of more than 6 million shares and is supportive of a deal between the Botox maker and Valeant Pharmaceuticals Inc, people familiar with the matter on Wednesday. The position is expected to rank the prominent U.S. hedge fund, led by John Paulson, among the top 10 to 15 holders of Allergan, according to Thomson Reuters shareholder data as of March 31. Paulson's new position in Allergan could give Valeant a boost, as the company tries to drum up support from at least 25 percent of Allergan shareholders so that it can call a special meeting. Valeant and its ally, Bill Ackman's Pershing Square Capital Management, are seeking to call a meeting to elect new directors to Allergan's board, which could pave the way for a takeover of the company. Valeant has taken its offer directly to Allergan shareholders after the Botox maker has rejected its latest $53 billion takeover bid, comprised of $72 in cash and 0.83 share of Valeant stock. http://www.cnbc.com/id/101789784 Link to comment Share on other sites More sharing options...
Liberty Posted June 27, 2014 Share Posted June 27, 2014 http://in.reuters.com/article/2014/06/27/allergan-valeant-ackman-idINL2N0P812L20140627 Pershing Square Capital Management, led by activist investor William Ackman, and Allergan Inc have agreed that calling a special meeting in an effort to elect new board members will not trigger Allergan's so-called "poison pill" measure, settling a lawsuit, the companies said on Friday. Pershing Square and Valeant Pharmaceuticals International Inc are pursuing Allergan in a $53 billion hostile takeover bid. Pershing Square has nearly a 10 percent stake in Allergan and if its stake passes 10 percent, Allergan's shareholder rights plan goes into effect and dilutes existing shareholders. Pershing Square said in a statement that the agreement will allow it to begin soliciting proxies "soon". Valeant issued a statement saying that it was pleased the litigation was resolved and would be "moving forward with our exchange offer." Pershing Square had filed suit in Delaware earlier this month seeking confirmation that soliciting proxies to call a meeting and replace board members would not trigger the pill. Allergan requires 25 percent of shareholders to call a special meeting. "The rights agreement was drafted in a manner to allow Allergan stockholders to seek to call a special meeting, and the stipulation simply makes it clear how the bylaws and the rights agreement work together," Allergan spokeswoman Bonnie Jacobs said in an e-mailed statement. Link to comment Share on other sites More sharing options...
Liberty Posted July 1, 2014 Share Posted July 1, 2014 http://in.reuters.com/article/2014/07/01/allergan-valeant-defense-idINL2N0P61CD20140701 (Reuters) - Allergan Inc may take on debt to buy back its own shares as part of a multi-faceted plan to thwart a $53 billion takeover bid by Valeant Pharmaceuticals International Inc and activist investor William Ackman. The company is also considering making acquisitions of its own and more spending cuts to increase shareholder value, Chief Executive David Pyott said in an interview, outlining steps to build support for Allergan, best known for its Botox anti-wrinkle injections, to remain a standalone company. But Allergan, which is expected to unveil the plan when it releases second-quarter results sometime in July, faces an uphill battle. Also: http://dealbook.nytimes.com/2014/07/01/pershing-square-said-to-hire-credit-suisse-for-allergan-fight/?smid=tw-dealbook&seid=auto Link to comment Share on other sites More sharing options...
fareastwarriors Posted July 1, 2014 Share Posted July 1, 2014 Pershing Square Hires Credit Suisse as Banker in Allergan Campaign Ackman's Firm Taps Credit Suisse, Known for Defending Against Activist Investors http://online.wsj.com/articles/pershing-square-hires-credit-suisse-as-banker-in-allergan-campaign-1404234514?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
loganc Posted July 2, 2014 Share Posted July 2, 2014 http://in.reuters.com/article/2014/07/01/allergan-valeant-defense-idINL2N0P61CD20140701 (Reuters) - Allergan Inc may take on debt to buy back its own shares as part of a multi-faceted plan to thwart a $53 billion takeover bid by Valeant Pharmaceuticals International Inc and activist investor William Ackman. The company is also considering making acquisitions of its own and more spending cuts to increase shareholder value, Chief Executive David Pyott said in an interview, outlining steps to build support for Allergan, best known for its Botox anti-wrinkle injections, to remain a standalone company. But Allergan, which is expected to unveil the plan when it releases second-quarter results sometime in July, faces an uphill battle. I had intended to remove myself from this thread as I felt like it was unproductive to my investment process, but I believe Pyott has gone "full retard" based on the Reuters article and I had to make some comments: I don't see how this helps AGN management. Specifically, this seems like a terrible capital allocation decision given the AGN operating model - they will issue debt and then buy back stock at an inflated valuation (relative to the AGN operating model). Obviously, they could have easily performed the buyback at significantly lower prices prior to the VRX bid. If they are actually serious about levering up to buy back stock at this point, how could any AGN shareholder be confident in the AGN management to be effective allocators of capital? Further, who would be selling into this buyback? I cannot imagine that any AGN shareholder that has an interest in seeing the VRX-AGN merger consummated would sell into the buyback. The most likely scenario to me is that the AGN shareholder base would only become more concentrated with investors supporting the VRX transaction as a result of the buyback. Link to comment Share on other sites More sharing options...
Liberty Posted July 2, 2014 Share Posted July 2, 2014 loganc, not only that, but if management was so sure that this was a bad deal and they could explain convincingly why to their shareholders, they should welcome a vote on it to be done with it. But by doing all these others things (how does refusing to even meet with VRX management just once help the shareholder be confident they're making an informed decision?), management is showing that it's more about what the C-suite wants than about what the owners of the business want. I sincerely hope you're wrong about them going full retard, because the next step is burning the furniture and flooding the basement to make sure nobody wants to buy the house anymore... (which is kind of what a bunch of crappy capital allocation decisions would be equivalent to) And if they do lever up to buy back shares and VRX still gets a shareholder vote in favor, can't VRX then just issue some equity at the likely high post-deal price to pay back that debt and delever to where they would be if AGN hadn't done that? It would be a pain and might destroy some value, but swapping debt for equity is a reversible thing, so it might not deter Valeant. What might scare them is a sizable, overpaid acquisition that would load the company with assets undesirable to VRX (big patent cliffs, lots of government reimbursed products in slow-growing markets, etc). They could still go ahead and then divest those things the next day, but if AGN overpays they might not be able to get a good price, and what a pain that would be... AGN just needs to let the owner of the business decide what they want to do. Link to comment Share on other sites More sharing options...
loganc Posted July 2, 2014 Share Posted July 2, 2014 loganc, not only that, but if management was so sure that this was a bad deal and they could explain convincingly why to their shareholders, they should welcome a vote on it to be done with it. But by doing all these others things (how does refusing to even meet with VRX management just once help the shareholder be confident they're making an informed decision?), management is showing that it's more about what the C-suite wants than about what the owners of the business want. I think this is a very good point. I am hard pressed to see how an AGN shareholder that is in favor of shareholder democracy would think that it is a good idea to support management that refuses to meet with VRX and that is so obstinate as to force legal action to verify that initiating the special meeting - which is a shareholder right - would not initiate the poison pill. I sincerely hope you're wrong about them going full retard, because the next step is burning the furniture and flooding the basement to make sure nobody wants to buy the house anymore... (which is kind of what a bunch of crappy capital allocation decisions would be equivalent to) The scenario you are presenting here seems like a low probability event. The legal ramifications would seem to preclude such extreme action, in my mind. Also, I think it is important to note that (by my analysis) VRX does not need to do this deal. While the AGN transaction makes enormous sense, VRX can walk away and the business will not collapse. My analysis brings me to the conclusion that the stand-alone valuation of VRX is fair and I believe that VRX management is superior. The downside to me is that I own a fair-valued stock with superior management. I am fine with that risk. And if they do lever up to buy back shares and VRX still gets a shareholder vote in favor, can't VRX then just issue some equity at the likely high post-deal price to pay back that debt and delever to where they would be if AGN hadn't done that? It would be a pain and might destroy some value, but swapping debt for equity is a reversible thing, so it might not deter Valeant. What might scare them is a sizable, overpaid acquisition that would load the company with assets undesirable to VRX (big patent cliffs, lots of government reimbursed products in slow-growing markets, etc). They could still go ahead and then divest those things the next day, but if AGN overpays they might not be able to get a good price, and what a pain that would be... AGN just needs to let the owner of the business decide what they want to do. I am sure there are ways to do the deal in the event that AGN self-destructs and does a levered buyback. Again, I believe this is a low probability event. However, I believe the deal is ultimately going to depend on price from the VRX management perspective and they can back out at any time. Personally, I would be pretty scared about levering up, buying a bunch of stock at 160, having VRX back out, and then watching the share price collapse in my face. I think that would be a pretty unpleasant experience for AGN management from a legal perspective. Link to comment Share on other sites More sharing options...
Liberty Posted July 2, 2014 Share Posted July 2, 2014 Also, I think it is important to note that (by my analysis) VRX does not need to do this deal. While the AGN transaction makes enormous sense, VRX can walk away and the business will not collapse. My analysis brings me to the conclusion that the stand-alone valuation of VRX is fair and I believe that VRX management is superior. The downside to me is that I own a fair-valued stock with superior management. I am fine with that risk. I also don't think they need it - it would just be a nice way to create a lot of value at once - but even without it I think VRX is still undervalued. They've said recently that if they weren't prevented from doing so by the outstanding AGN offer, they would be seriously looking at doing buybacks right now. However, I believe the deal is ultimately going to depend on price from the VRX management perspective and they can back out at any time. Personally, I would be pretty scared about levering up, buying a bunch of stock at 160, having VRX back out, and then watching the share price collapse in my face. I think that would be a pretty unpleasant experience for AGN management from a legal perspective. They're quite disciplined about not overpaying, and they've walked away from big deals in the past when they could get a price that let them meet their hurdle. They recently said that they have a "walk away" price with AGN, so I'm not worried about them chasing this one to the end of the Earth just to build an empire or whatever. Agreed about the buybacks. Without VRX's offer, AGN wouldn't trade anywhere near where it does now, so it would be a bad move to take billions of debt to do billions in buybacks at this level to try to make VRX go away... I think Valeant's Q2 and especially Q3 will be catalysts. If they show strong performance without any big acquisitions in the recent past, with GAAP and the adjusted metrics converging toward GAAP rather than diverging further, the bear thesis will lose its bite. Link to comment Share on other sites More sharing options...
Liberty Posted July 7, 2014 Share Posted July 7, 2014 http://dealbook.nytimes.com/2014/07/07/pershing-square-offers-slate-of-directors-for-allergan/ Link to comment Share on other sites More sharing options...
Liberty Posted July 10, 2014 Share Posted July 10, 2014 http://brooklyninvestor.blogspot.ca/2014/07/cost-cutting-r-etc.html Touches on Valeant, among other things (Apple, R&D, cost cutting, 3G, etc). Link to comment Share on other sites More sharing options...
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