cemadh Posted November 10, 2014 Share Posted November 10, 2014 I do no see the logic behind that poster's comments on CafePharma. Ackman has joined hands with Pearson and Valeant to buy Allergan. So in that sense, he is part of the buyer's team. Why in the world would be say (back in May) that you should say "No" to this $160 offer because if you act stubborn and resist us, we will offer you more money? So - to claim that Ackman was wrong in May is nonsensical (in my opinion). As the bidder, you will always say that this is your best offer. Just because you raised your best offer does not immediately make you a liar in the negotiation world. In a purely semantic sense, yes - you lied. But - so what? That is the game. Link to comment Share on other sites More sharing options...
Liberty Posted November 11, 2014 Share Posted November 11, 2014 When Ackman and Valeant first announced the Allergan deal, Ackman mentioned in the Q&A that "they were already working on the next one", and during the presentation, they mentioned Zoetis as a company they liked (but in another context). Well, looks like it might be the next one: http://online.wsj.com/articles/ackman-takes-stake-in-animal-health-company-zoetis-1415738359 Activist investor William Ackman has taken a roughly $2 billion stake in Zoetis Inc. and could push the animal-health company to sell itself to a large drug maker like Valeant Pharmaceuticals International Inc., according to people familiar with the matter. Mr. Ackman’s Pershing Square Capital Management LP has built the stake, which amounts to roughly 10% of Zoetis, with fellow hedge fund Sachem Head Capital Management LP, the people said. Sachem Head is run by Scott Ferguson, a former protégé of Mr. Ackman. Now I have to go back to the original presentation to refresh my memory and see what they said about Zoetis exactly... Link to comment Share on other sites More sharing options...
FiveSigma Posted November 11, 2014 Share Posted November 11, 2014 I think the right term for what Ackman is trying to do here is 'double-fisting' ;D Link to comment Share on other sites More sharing options...
Liberty Posted November 12, 2014 Share Posted November 12, 2014 Slide from april 22nd, when Ackman briefly mentioned liking the business after explaining how it was one of the few businesses with as many durable assets as a AGN-VRX combination would have: http://i.imgur.com/9O7mZrH.jpg Link to comment Share on other sites More sharing options...
loganc Posted November 12, 2014 Share Posted November 12, 2014 Slide from april 22nd, when Ackman briefly mentioned liking the business after explaining how it was one of the few businesses with as many durable assets as a AGN-VRX combination would have: http://i.imgur.com/9O7mZrH.jpg As you mentioned on twitter, ZTS has a bloated cost structure relative to the VRX model. While I haven't done any work on ZTS, I would imagine you are dealing with a bunch of products that are primarily cash pay in nature. That would obviously be a desirable attribute to the business. However, I can't imagine that the synergies for ZTS-VRX are even close to AGN-VRX. Specifically, I can't see how there would be any salesforce overlap between ZTS and VRX. Link to comment Share on other sites More sharing options...
Liberty Posted November 12, 2014 Share Posted November 12, 2014 However, I can't imagine that the synergies for ZTS-VRX are even close to AGN-VRX. Specifically, I can't see how there would be any salesforce overlap between ZTS and VRX. Indeed. I wonder if maybe the plan is to build a new platform (ie. they have eye health, dermatology..). Gotta start somewhere. Once they have Zoetis, they could buy more animal health assets and then get more of those kinds of synergies? Link to comment Share on other sites More sharing options...
Liberty Posted November 12, 2014 Share Posted November 12, 2014 Hmm, here's a thought: Ackman's ZTS stake increases VRX stock price, which makes AGN deal more likely. Two birds with one stone.. Link to comment Share on other sites More sharing options...
loganc Posted November 12, 2014 Share Posted November 12, 2014 Hmm, here's a thought: Ackman's ZTS stake increases VRX stock price, which makes AGN deal more likely. Two birds with one stone.. Another thing to consider is the insider trading implications. The optics of VRX making a bid for ZTS at this point would seem to me to be pretty terrible. Link to comment Share on other sites More sharing options...
Liberty Posted November 12, 2014 Share Posted November 12, 2014 http://www.sec.gov/Archives/edgar/data/850693/000119312514407765/d820355d8k.htm Link to comment Share on other sites More sharing options...
Liberty Posted November 12, 2014 Share Posted November 12, 2014 http://www.bloomberg.com/news/2014-11-12/actavis-said-in-talks-to-acquire-allergan-for-over-60-billion.html Actavis Plc (ACT) is in talks to acquire Allergan Inc. for at least $60 billion, or more than $200 a share, with a possible agreement as little as two weeks away, said people with knowledge of the matter. The two companies are trying to narrow a gap of about $3 billion between what Actavis wants to pay and what Allergan is asking for, said two of the people, asking not to be identified discussing private information. The maker of anti-wrinkle treatment Botox is seeking more than $210 a share while Actavis wants to pay closer to $200, said two of the people. Link to comment Share on other sites More sharing options...
muscleman Posted November 13, 2014 Share Posted November 13, 2014 How would you calculate the FCF generated by the drugs? I guess my question should actually be, how would you adjust D&A for drugs? How long is the patent, and when the patent expires, can any random player make the same drug as you do? Link to comment Share on other sites More sharing options...
peter1234 Posted November 16, 2014 Share Posted November 16, 2014 Allergan close to $64bn deal with Actavis Allergan, the maker of Botox, is close to selling itself to fellow drugs group Actavis in a multibillion dollar deal that looks set to end its long and acrimonious takeover battle with rival Valeant. www.ft.com/intl/cms/s/0/f47c8610-6dc2-11e4-bf80-00144feabdc0.html Link to comment Share on other sites More sharing options...
cemadh Posted November 16, 2014 Share Posted November 16, 2014 And Zoetis adopts a poison pill - http://www.bloomberg.com/news/2014-11-14/zoetis-adopts-poison-pill-after-ackman-takes-stake.html?cmpid=yhoo Ackman and Valeant would still make a profit on the VRX shares they own. They may also sue and/or make a higher offer for Zoetis and/or Allergan. Also Ackman may have to deal with insider trading lawsuits. The soap opera is not over yet..... Link to comment Share on other sites More sharing options...
Guest wellmont Posted November 16, 2014 Share Posted November 16, 2014 it looks like vrx will bow out gracefully per cnbc. Link to comment Share on other sites More sharing options...
krazeenyc Posted November 16, 2014 Share Posted November 16, 2014 it looks like vrx will bow out gracefully per cnbc. While making a decent little profit along with Pershing Square. Link to comment Share on other sites More sharing options...
loganc Posted November 16, 2014 Share Posted November 16, 2014 it looks like vrx will bow out gracefully per cnbc. I thought VRX was going to raise the bid again. Why not do it now and make ACT pay more? I don't know the details of ACT, but it seems to me that VRX can make a higher bid price make sense, given the deal synergies. Link to comment Share on other sites More sharing options...
Guest wellmont Posted November 17, 2014 Share Posted November 17, 2014 it looks like vrx will bow out gracefully per cnbc. I thought VRX was going to raise the bid again. Why not do it now and make ACT pay more? I don't know the details of ACT, but it seems to me that VRX can make a higher bid price make sense, given the deal synergies. apparently the price is too high. I like their discipline. let $ACT get stuck with the pig in a poke. Link to comment Share on other sites More sharing options...
Liberty Posted November 17, 2014 Share Posted November 17, 2014 Tomorrow will be an interesting day for sure. If ACT gets AGN, it'll be interesting to see how many other companies adopt the horse-choker bylaws that AGN has... Link to comment Share on other sites More sharing options...
loganc Posted November 17, 2014 Share Posted November 17, 2014 I guess AGN mgmt prefers the ACT currency because of the lower price to sales ratio. Link to comment Share on other sites More sharing options...
dwy000 Posted November 17, 2014 Share Posted November 17, 2014 As much as I hate the tactics they used and feel it was a pretty scummy way to go about it, at the end of the day AGN board did what they were supposed to do - get the maximum amount for their shareholders. If they had just resigned themselves to the Valeant bid early on it would have been cleaner, faster and much less money for shareholders. Link to comment Share on other sites More sharing options...
merkhet Posted November 17, 2014 Share Posted November 17, 2014 I feel like this will cause managements to learn, possibly, the wrong lesson from Allergan. Just because this worked out okay for Allergan shareholders doesn't mean that a similarly situated board in another company will also work out for its shareholders. Link to comment Share on other sites More sharing options...
LC Posted November 17, 2014 Share Posted November 17, 2014 I feel like this will cause managements to learn, possibly, the wrong lesson from Allergan. Just because this worked out okay for Allergan shareholders doesn't mean that a similarly situated board in another company will also work out for its shareholders. Yes I agree. I just wish Ackman didn't parade around trying to acquire these guys, because his actions will cloud the valid criticism that Allergan's management took actions which essentially spat in the face of their shareholders. Link to comment Share on other sites More sharing options...
100 Shares Posted November 17, 2014 Share Posted November 17, 2014 Getting a near 100% premium to when this bidding war began makes management look good until you realize that that was a 100% premium to a company already priced at 25 times earnings. Just goes to show how poorly run and how much excess fat has accumulated in the company's operations. Link to comment Share on other sites More sharing options...
giofranchi Posted November 17, 2014 Author Share Posted November 17, 2014 "We have seen the announcement that Allergan and Actavis have made, and while we will review any such agreement in determining our course of action, Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan," said J. Michael Pearson, Chairman and CEO of Valeant. "Our business is performing extremely well as evidenced by our third quarter results, our expected strong fourth quarter, and our robust outlook for 2015, and I am confident in our continued ability to generate exceptional shareholder value. We will remain focused on delivering strong organic results and evaluating acquisition opportunities as we always have: prudently, in a disciplined manner, and in the best interests of our shareholders." http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Comments-On-Allergan-Announcement/default.aspx Gio Link to comment Share on other sites More sharing options...
mankap Posted November 17, 2014 Share Posted November 17, 2014 It is good to walk away than overpay. There will be other opportunities in future. Link to comment Share on other sites More sharing options...
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