You need to get informed before you write stupid BS. First off- there are many shareholders that don't want the VRX deal. There is a minority of "event" hedgies that want this deal but long term investors are smarter than you think. They know the likelihood that VRX acquiring AGN will not produce long term gains. Also as a shareholder of AGN with many shares, I am not in favor of this deal happening either. Secondly- for employees of AGN, the worst possible scenario is to be bought by this fraud company VRX and I will bet the farm that it is viewed exactly the same way with the BOD and Pyott. Lastly- those of us who have been with the company for many, many years got plenty of stock in not only ESOP but also in options so go blow your smoke up your fellow VRX asses. No one wants this deal other than the 40 yr old wanna be event hedge fund manager that spoke out a couple weeks ago.
Glossary of Hostile Takeover Terms with Discussion
- Thread starter Shoham
- Start date
You need to get informed before you write stupid BS. First off- there are many shareholders that don't want the VRX deal. There is a minority of "event" hedgies that want this deal but long term investors are smarter than you think. They know the likelihood that VRX acquiring AGN will not produce long term gains. Also as a shareholder of AGN with many shares, I am not in favor of this deal happening either. Secondly- for employees of AGN, the worst possible scenario is to be bought by this fraud company VRX and I will bet the farm that it is viewed exactly the same way with the BOD and Pyott. Lastly- those of us who have been with the company for many, many years got plenty of stock in not only ESOP but also in options so go blow your smoke up your fellow VRX asses. No one wants this deal other than the 40 yr old wanna be event hedge fund manager that spoke out a couple weeks ago.
I agree with 100% of what you're saying but keep in mind TRowe Price spoke out for a deal and they are a respected mutual fund company. Don't get me wrong they're full of shit as they increased their AGN stake after first unsolicited offer came into effect and they are a major shareholder of VRX so they are acting like an event driven fund but make no mistake they are a respected company despite their unethical actions in this takeover battle.
A little testy aren't we. Well dickhead we will see I guess who wants the deal in December. I now really hope it goes through and that you are one of the first laid off. I work for Shire and have read this thread in its entirety and didn't care either way. But now I'm on team VRX mainly because of your arrogant post.
Its very clear- at least by press releases- that plenty of majority shareholders didn't want AGN to buy Salix because of the prospects of a VRX purchase. You must read selectively. It appears- very clearly I might add- that if those shareholders hadn't spoken out AGN would have went ahead of blocked the sale by making a purchase of Salix.
Again,
1.)Under Delaware corporate law, no shareholder approval is required for an acquisition. And,
2.)New York Stock Exchange rules only require such approval if more than 20% of Allergan's shares were being issued.
And that still holds even if some of the shareholders are Pershing Square and T.Rowe Price.
There's nothing legally stopping allergan from making th e salix purchase, that's true. But, the real world of corporate governance doesn't allow a CEO and board to completely ignore their largest shareholders without repercussions.
Just because Pyott and Co could make an Aquisition doesn't mean that if they do so, 20+ top funds sell their positions entirely due to a lack of trust in the board, and Allergan's stock tanks to 50.
Just because it's legal, doesn't mean any CEO would or should spurn their shareholders. It never works out
New poster here. Quit being a moron. AGN and Pyott know the Shareholders much better then you and Hackman. Most funds if not all will always vote for a special meeting because it is in their by-laws to do so. The fact that 39% of the votes want that meeting means nothing other than there will assuredly be a meeting. If the BOD wants to stave off a VRX "hostile" takeover then, I for one, trust that they know what is best for the company. VRX is Tyco redux. Short term thinking is not a good future.
Man you guys are in for a rude awakening. Don't you think Allergan would have pulled the trigger by now- a hostile takeover is imminent. You better hope Octobers court date is kind to you otherwise you have no hope at all.
And what has your billions in R&D gotten you? Worst investment ever...
Keep talking SH!t, deal is happening and DP will be laughing to the bank!
How hard is it to keep the Allergan posts on the Allergan board, and the Valeant Bullsh*t on the Valeant board? This was an interesting and intelligent course of e-conversation until recently. A**clowns.
Dan, thank you for your personal and insightful perspective.
Much appreciated.
OK, back to our regularly scheduled program...
There was a trial balloon being floated by Paradigm Capital (Toronto) this week that Valeant's upcoming Q3 report (coming out on Monday morning) is so spectacular that in fact, Valeant doesn't need to follow through with the takeover of Allergan.
I am wondering, is this a change in the Valeant narrative, that the takeover is not the "fait accompli" that Pearson and Ackman were trying to to push; is this their plan B to avoid a humiliating and costly failure at the Dec. 18 shareholder vote? Anyway, this is (almost)
the first time I have heard promotion of an idea backtracking away from Valeant's shotgun wedding with Allergan.
"Valeant Q3 could prove it doesn't need Allergan, says Paradigm", 15 Oct. 2014, by Nick Waddell, Cantech Letter --
A strong third quarter from Valeant Pharmaceuticals on October 20th could prove to the street that the company's legacy business is strong and sustainable, says Paradigm Capital analyst Alan Ridgeway...'In our opinion, a strong quarter with a raise in guidance for Q4 should alleviate some of the arguments that AGN and the bears have been making about the sustainability of VRX's legacy business and its ability to maintain momentum in growth businesses it acquires,' said Ridgeway. The analyst says he views Valeant as a solid stand-alone ivestment opportunity, and that (emphasis mine) ALLERGAN IS SIMPLY A FREE OPTION FOR INVESTORS."
http://www.cantechletter.com/2014/10/valeant-q3-prove-doesnt-need-allergan-says-paradigm
There was a trial balloon being floated by Paradigm Capital (Toronto) this week that Valeant's upcoming Q3 report (coming out on Monday morning) is so spectacular that in fact, Valeant doesn't need to follow through with the takeover of Allergan.
I am wondering, is this a change in the Valeant narrative, that the takeover is not the "fait accompli" that Pearson and Ackman were trying to to push; is this their plan B to avoid a humiliating and costly failure at the Dec. 18 shareholder vote? Anyway, this is (almost)
the first time I have heard promotion of an idea backtracking away from Valeant's shotgun wedding with Allergan.
"Valeant Q3 could prove it doesn't need Allergan, says Paradigm", 15 Oct. 2014, by Nick Waddell, Cantech Letter --
A strong third quarter from Valeant Pharmaceuticals on October 20th could prove to the street that the company's legacy business is strong and sustainable, says Paradigm Capital analyst Alan Ridgeway...'In our opinion, a strong quarter with a raise in guidance for Q4 should alleviate some of the arguments that AGN and the bears have been making about the sustainability of VRX's legacy business and its ability to maintain momentum in growth businesses it acquires,' said Ridgeway. The analyst says he views Valeant as a solid stand-alone ivestment opportunity, and that (emphasis mine) ALLERGAN IS SIMPLY A FREE OPTION FOR INVESTORS."
http://www.cantechletter.com/2014/10/valeant-q3-prove-doesnt-need-allergan-says-paradigm
Guys, get over the Salix thing. There is one reason we did not buy them. Salix was asking north of $200 per share. That was too much . They have a big indication potentially coming (Irritable Bowel Syndrone Diarrhea) in February. Potentially a billion $ indication so they felt buoyed by that to ask for $210.
Yeah that stock is way overpriced even at $140...much less over $200. They are crazy if they think anyone will pay that. One trick pony!
Even if they were to win on Dec 18, the fight wouldn't be over. Valeant is probably not prepared to go well into 2015 to get Allergan.
The ave M and A deal takes 4-5 yrs, I am sure Pearson knows this, so far all in this is just about 3 yrs. Don't be foolish they are prepared to go into 2015. Point is they aren't going anywhere and AGN is a 'quack' sitting duck! What a joke!
What an assclown. The game would've already been over if a trump card was needed against Valeant's pathetic offer and business model
- Shoham Oct 20, 2014 at 12:19: AM
Shoham
Member
What to Look Forward to This Week and Next
Hi everyone:
Chances are we are going to go into another eventful week. I don't know if it will rival the one three weeks go, but it might. There are 4 calendared events over the next 10 days, and none for the following 7 weeks until the special meeting; so I imagine all players will want to position themselves as well as they can and have been preparing for this timeline.
First, the calendared events:
1. Monday, October 20: Valeant Release Q3 Earnings
2. Monday, October 27: Allergan Release Q3 Earnings
3. Tuesday, October 28: Insider Trading Law Suit Injunction Hearing
4. Thursday, October 30: Record Date for Shareholder Meeting
... Long Pause ...
5. December 18: Special Shareholder Meeting
Before we go into more details, let me share a widely known, but little discussed, bit of accounting trickery: Auditors give push back when companies recognize revenues too aggressively. But there are very little controls against the opposite. I have never, in my life, met an auditor who didn't approve a financial statement because its earnings recognition was too conservative. In theory, accounting rules require reporting to be accurate and consistent; but in practice, the cops are a lot more interested in speeders, even if they are the only ones on the road, than those driving too slow. So, companies, almost as a second nature, create what I would call a "slush fund" of instances where they chose to be more conservative than necessary. When they earn more than projected, they become ubber-conservative in their revenue recognition, which has the effect of charging up this fund. When they urgently need a revenue boost -- to avoid missing numbers, or to boost share price ahead of an acquisition -- they make "withdrawals." Just about every accounting decision -- from bad debt provision to legal risk estimation to percent-of-completion project accounting -- generates an opportunity to be extra conservative one day (thus making a "deposit"), and back to normal behavior the next (making a withdrawal). This is how, out of the blue, just when they need it, without any dramatic new product launch or anything unusual happening in the economy or the competition, a company can suddenly have a "blowout quarter."
Allergan, with decades of being unchallenged by the Street, I believe, has a fully charged slush fund (one of the reason for the takeover attempt, the share price was a lot lower than where the real earnings were because the slush fund was being charged up). Valeant would have some in the fund, but not a vast amount, since they have to use it to push up their own price before every acquisition and equity offering (then they charge it back up with "one time" charges at acquisition time).
Ok, so now, with this bit of background, let's see where the next 2 weeks will take us:
1. Monday, October 20: Valeant Release Q3 Earnings. Valeant has clearly been been, since at least July, fixated on this date. In July, when they release their Q2 numbers, they lowered guidance and took a significant share price drop (I speculated then that they swallowed more poison than necessary so as to be able to beat and raise guidance at the more crucial October 20 earning release). Three weeks ago, they announced that, indeed, they will be beating guidance, but didn't say by how much (what the heck?). The big question, in my mind, would be if their "beat" now will be more or less than the "lowering" in July. If it's about the same (or, even worst, if it's less), then it's clearly gaming the guidance to create pretend-momentum. Gaming or not, they will describe Q3 as a "blowout quarter."
I also read Ackman's alleged finding of evidence that Allergan has been lying about Valeant to be part of the momentum-generation effort. Ackman, just in time for the "blowout quarter" that Valeant has been cooking, is refocusing everyone's attention on how Allergan has been saying that Valeant destroys the value of companies it acquires and how Valeant has been saying "it ain't so" -- setting the stage to prove Allergan wrong and Valeant right. (Legally speaking, this particular whining is totally laughable. For Ackman to "find evidence" that Allergan has been saying what everyone has for 6 months been hearing them saying, is a joke. If anyone sold Valeant shares -- and apparently many did -- based on what Allergan has been saying, it's because it had the ring of truth, not because they are mindless drones easily driven into wrongheaded trades by simplistic lies based entirely on publicly available information.)
I also expect that they will start inserting heavily into their propaganda the concept of "standalone value." (Some of their Hedge funds are already using this language). With Actavis in the picture, they can not make a convincing argument that an Allergan acquisition is a foregone conclusion, and therefore, if there is a sentiment that Valeant doesn't have much "standalone value," it will damage the share price, which will then reduce the value of the Valeant deal, which will further reduce the chance of a deal happening (further damaging Valeant share price, and so on). So, I expect that they will talk a lot about how great the Valeant is, with or without an Allergan acquisition.
One event that won't happen Monday is the raise in deal offer for Allergan. When the Actavis rumor was at a fever pitch, Valeant leaked to CNBC that they will raise their offer by $15 and intended to announce it on October 20, just as they are releasing their "blowout quarter" numbers. The leaker openly said that this was as part of a momentum-creating push. (Short of explicitly spelling it out, CNBS didn't even make the slightest effort to mask that the leak came from Valeant). At the time of the leak, Allergan was already trading (slightly) more than $15 above the Valeant offer. The leak didn't exactly say how the $15 will be made up, but implied it would be mostly stocks (not a surprise to readers of this thread, who know that Valeant's ability to offer cash is nearly topped out). Well, in a further CNBC leak, equally minimally-masked, they now say they won't raise the bid on October 20th, or prior to the record date, but will before the special meeting. (I don't know if it's just me, but the reporter -- David Farber -- who reported both the leak and the reversal, seemed annoyed to me; as if he is telegraphing to Valeant that leaks that get reversed damage the credibility of both the leaker and the reporters that channel such).
It probably won't be more than 2-3 days before we have Allergan and the Forensic Accounting Team, as well as our friends at Seeking Alpha, shred the Valeant "blowout quarter" numbers to pieces. If Valeant can't send their stock price into the 130's or better and keep them there for more than just a few days, I don't see another opportunity to do so before the special shareholder meeting. Other than raising their bid, for Valeant, I think, this is the last major "hard power" play.
2. Monday, October 27: Allergan Release Q3 Earnings. Allergan, too, will be (surprise, surprise) having a "blowout quarter" and guidance raise. Unlike Valeant, this is on top of a prior "blowout quarter" and guidance raise the prior quarter. (Of course, as per my speculations above, the Allergan slush fund for blowout numbers has been charged up a lot better than Valeant, so Allergan can engineer two consecutive blowouts; whereas Valeant need to lower guidance one quarter before they can raise it back the next). Also, unlike Valeant, when Allergan announced (on October 10) that they are beating their own -- already raised -- guidance, they used actual numbers. They might have held a bit back, and will further beat (for a third time), even the preliminary numbers; but probably not by much (it would be hard to justify -- what information could possibly came to light after October 10 that would have dramatically increase the already finished Q3 earnings?). My expectation -- it will be a non-event.
3. Tuesday, October 28: Insider Trading Law Suit Injunction Hearing. This is, of course, (one of) the big elephant(s) in the room. I have stated before that as this is uncharted legal territory, I refuse to handicap how the decision will go. (I will even go as far as to say that anyone who claims this is a slam dunk win, or a slam dunk lose -- well, you get the idea). As mentioned earlier, if he loses the injunction, than not only do his shares not vote for the removal of board members, but they are effectively voting against it.
4. Thursday, October 30: Record Date for Shareholder Meeting. The Record Date is the one on which stock ownership for the purpose of voting in the special shareholder meeting count. Technically speaking, a Record Date shouldn't matter much, since anyone who sold his shares after the record date would have sold his right to vote along with it and is required, if requested, to provide the buyer with a proxy (where they can change the vote if already cast). In practice, given the complexity of instruments (such as options) governing the control over many Allergan shares, it is not always straight forward. If there is a lot of share movement between the Record Date and the Shareholder Meeting, and particularly if there is evidence of "empty voting" (the practice of voting shares and then selling them, or other methods of voting more than owning), we may yet have another legal front opened up!!!
The Record Date is not the date of voting, that's the meeting date (December 18). That's just the date for determining who gets to vote. Shareholders can give proxy (effectively, early votes), but can revoke those proxies and change their mind at any time until the actual meeting. With over 90% of Allergan shares held in institutions, I expect that most of them will try to keep the tension high right up to the last minute so as to motivate all interested parties (Allergan, Valeant, Actavis, maybe more we don't yet know about) to max up their play, bid, business plan, or offers.
Dan.
Hi everyone:
Chances are we are going to go into another eventful week. I don't know if it will rival the one three weeks go, but it might. There are 4 calendared events over the next 10 days, and none for the following 7 weeks until the special meeting; so I imagine all players will want to position themselves as well as they can and have been preparing for this timeline.
First, the calendared events:
1. Monday, October 20: Valeant Release Q3 Earnings
2. Monday, October 27: Allergan Release Q3 Earnings
3. Tuesday, October 28: Insider Trading Law Suit Injunction Hearing
4. Thursday, October 30: Record Date for Shareholder Meeting
... Long Pause ...
5. December 18: Special Shareholder Meeting
Before we go into more details, let me share a widely known, but little discussed, bit of accounting trickery: Auditors give push back when companies recognize revenues too aggressively. But there are very little controls against the opposite. I have never, in my life, met an auditor who didn't approve a financial statement because its earnings recognition was too conservative. In theory, accounting rules require reporting to be accurate and consistent; but in practice, the cops are a lot more interested in speeders, even if they are the only ones on the road, than those driving too slow. So, companies, almost as a second nature, create what I would call a "slush fund" of instances where they chose to be more conservative than necessary. When they earn more than projected, they become ubber-conservative in their revenue recognition, which has the effect of charging up this fund. When they urgently need a revenue boost -- to avoid missing numbers, or to boost share price ahead of an acquisition -- they make "withdrawals." Just about every accounting decision -- from bad debt provision to legal risk estimation to percent-of-completion project accounting -- generates an opportunity to be extra conservative one day (thus making a "deposit"), and back to normal behavior the next (making a withdrawal). This is how, out of the blue, just when they need it, without any dramatic new product launch or anything unusual happening in the economy or the competition, a company can suddenly have a "blowout quarter."
Allergan, with decades of being unchallenged by the Street, I believe, has a fully charged slush fund (one of the reason for the takeover attempt, the share price was a lot lower than where the real earnings were because the slush fund was being charged up). Valeant would have some in the fund, but not a vast amount, since they have to use it to push up their own price before every acquisition and equity offering (then they charge it back up with "one time" charges at acquisition time).
Ok, so now, with this bit of background, let's see where the next 2 weeks will take us:
1. Monday, October 20: Valeant Release Q3 Earnings. Valeant has clearly been been, since at least July, fixated on this date. In July, when they release their Q2 numbers, they lowered guidance and took a significant share price drop (I speculated then that they swallowed more poison than necessary so as to be able to beat and raise guidance at the more crucial October 20 earning release). Three weeks ago, they announced that, indeed, they will be beating guidance, but didn't say by how much (what the heck?). The big question, in my mind, would be if their "beat" now will be more or less than the "lowering" in July. If it's about the same (or, even worst, if it's less), then it's clearly gaming the guidance to create pretend-momentum. Gaming or not, they will describe Q3 as a "blowout quarter."
I also read Ackman's alleged finding of evidence that Allergan has been lying about Valeant to be part of the momentum-generation effort. Ackman, just in time for the "blowout quarter" that Valeant has been cooking, is refocusing everyone's attention on how Allergan has been saying that Valeant destroys the value of companies it acquires and how Valeant has been saying "it ain't so" -- setting the stage to prove Allergan wrong and Valeant right. (Legally speaking, this particular whining is totally laughable. For Ackman to "find evidence" that Allergan has been saying what everyone has for 6 months been hearing them saying, is a joke. If anyone sold Valeant shares -- and apparently many did -- based on what Allergan has been saying, it's because it had the ring of truth, not because they are mindless drones easily driven into wrongheaded trades by simplistic lies based entirely on publicly available information.)
I also expect that they will start inserting heavily into their propaganda the concept of "standalone value." (Some of their Hedge funds are already using this language). With Actavis in the picture, they can not make a convincing argument that an Allergan acquisition is a foregone conclusion, and therefore, if there is a sentiment that Valeant doesn't have much "standalone value," it will damage the share price, which will then reduce the value of the Valeant deal, which will further reduce the chance of a deal happening (further damaging Valeant share price, and so on). So, I expect that they will talk a lot about how great the Valeant is, with or without an Allergan acquisition.
One event that won't happen Monday is the raise in deal offer for Allergan. When the Actavis rumor was at a fever pitch, Valeant leaked to CNBC that they will raise their offer by $15 and intended to announce it on October 20, just as they are releasing their "blowout quarter" numbers. The leaker openly said that this was as part of a momentum-creating push. (Short of explicitly spelling it out, CNBS didn't even make the slightest effort to mask that the leak came from Valeant). At the time of the leak, Allergan was already trading (slightly) more than $15 above the Valeant offer. The leak didn't exactly say how the $15 will be made up, but implied it would be mostly stocks (not a surprise to readers of this thread, who know that Valeant's ability to offer cash is nearly topped out). Well, in a further CNBC leak, equally minimally-masked, they now say they won't raise the bid on October 20th, or prior to the record date, but will before the special meeting. (I don't know if it's just me, but the reporter -- David Farber -- who reported both the leak and the reversal, seemed annoyed to me; as if he is telegraphing to Valeant that leaks that get reversed damage the credibility of both the leaker and the reporters that channel such).
It probably won't be more than 2-3 days before we have Allergan and the Forensic Accounting Team, as well as our friends at Seeking Alpha, shred the Valeant "blowout quarter" numbers to pieces. If Valeant can't send their stock price into the 130's or better and keep them there for more than just a few days, I don't see another opportunity to do so before the special shareholder meeting. Other than raising their bid, for Valeant, I think, this is the last major "hard power" play.
2. Monday, October 27: Allergan Release Q3 Earnings. Allergan, too, will be (surprise, surprise) having a "blowout quarter" and guidance raise. Unlike Valeant, this is on top of a prior "blowout quarter" and guidance raise the prior quarter. (Of course, as per my speculations above, the Allergan slush fund for blowout numbers has been charged up a lot better than Valeant, so Allergan can engineer two consecutive blowouts; whereas Valeant need to lower guidance one quarter before they can raise it back the next). Also, unlike Valeant, when Allergan announced (on October 10) that they are beating their own -- already raised -- guidance, they used actual numbers. They might have held a bit back, and will further beat (for a third time), even the preliminary numbers; but probably not by much (it would be hard to justify -- what information could possibly came to light after October 10 that would have dramatically increase the already finished Q3 earnings?). My expectation -- it will be a non-event.
3. Tuesday, October 28: Insider Trading Law Suit Injunction Hearing. This is, of course, (one of) the big elephant(s) in the room. I have stated before that as this is uncharted legal territory, I refuse to handicap how the decision will go. (I will even go as far as to say that anyone who claims this is a slam dunk win, or a slam dunk lose -- well, you get the idea). As mentioned earlier, if he loses the injunction, than not only do his shares not vote for the removal of board members, but they are effectively voting against it.
4. Thursday, October 30: Record Date for Shareholder Meeting. The Record Date is the one on which stock ownership for the purpose of voting in the special shareholder meeting count. Technically speaking, a Record Date shouldn't matter much, since anyone who sold his shares after the record date would have sold his right to vote along with it and is required, if requested, to provide the buyer with a proxy (where they can change the vote if already cast). In practice, given the complexity of instruments (such as options) governing the control over many Allergan shares, it is not always straight forward. If there is a lot of share movement between the Record Date and the Shareholder Meeting, and particularly if there is evidence of "empty voting" (the practice of voting shares and then selling them, or other methods of voting more than owning), we may yet have another legal front opened up!!!
The Record Date is not the date of voting, that's the meeting date (December 18). That's just the date for determining who gets to vote. Shareholders can give proxy (effectively, early votes), but can revoke those proxies and change their mind at any time until the actual meeting. With over 90% of Allergan shares held in institutions, I expect that most of them will try to keep the tension high right up to the last minute so as to motivate all interested parties (Allergan, Valeant, Actavis, maybe more we don't yet know about) to max up their play, bid, business plan, or offers.
Dan.