Glossary of Hostile Takeover Terms with Discussion

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  • Shoham   Nov 10, 2014 at 02:31: AM
Anonymous said:
You are wrong about the growth rate. The 49% growth rate is due to the acquisition of Santarus, which closed in Jan 2014.
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Fair enough. I did say that my familiarity with Salix is minimal, and that I'm only giving my immediate take based on news that came about since the Allergan involvement. Allow me to rephrase my writings to just say that the growth rate of the affected products was seriously overstated through this 'channel stuffing' fraud, and withdraw any my earlier attempt to actually estimate what it would have been without it.

Dan.
 




Shoham said:
Hello:

I do, very much, appreciate the vote of confidence; and I do, very much, feel saddened for the Salix people. However, starting another thread is probably more commitment than I can take on right now. I'm writing this thread for the benefit of a family member (wife) and many friends who are Allergan employees. It's a lot of work, but, at least now, after doing it for 5 months, I've developed some background knowledge with Allergan (and Valeant). I know nothing about Salix beyond the little I gathered in the context of the Allergan interest.

You are more than welcome to copy anything I write here to the Salix board. I'll try to give my immediate take, with the huge caveat that my familiarity with Salix is really minimal.

There is no easy way to say this; but a lot of people will suffer for the shenanigans of a very few. Accounting fraud -- and this is fraud, no matter what euphemistic or temporizing language is being used -- is just about the most unforgivable sin in any publicly traded company. What is particularly enraging is that there was no need to commit this fraud; the company and shareholders were doing just great legitimately. The incremental gain on account of the fraud (if it was successful) was not that great relative to playing it straight. And the chance of getting away with the fraud wasn't that great either.

In an otherwise very dark situation, there is one bright spot: The 2013 financial statements were audited by Ernest&Young, a respected and beyond reproach CPA firm. E&Y stated that they are still standing by their audit of 2013 (which includes verifying inventory levels). This means that, at least as of December 31, 2013, Salix was probably a legitimate company. On that day, Salix stock closed at $90. This is almost exactly the same as it is trading now -- meaning that the market continues to believe that the company has not destroyed the value it had on that day (but anything that it claims to have done in 2014 is now suspect).

So, if on 12/31/2013 the company was legit, it's distributors inventory level would have been at the normal of about 3 months supply. Now (meaning end of Q3), 9 months later, inventory is at 9 months. This means that over the past 9 months, 15 months worth of inventory was shipped to distributors (9 to meet ongoing needs and 6 to increase the stockpile from 3 to 9 months). Under accounting rules, inventory shipping is the definitive event for revenues recognition. So, over the past 9 months, revenues for 15 months worth of shipping was recognized, boosting revenues for the affected products by 70% above where they would have been legitimately. I don't know how much of the total Salix revenues is in the affected products, but my understanding from reading the news stories is that those are the dominant products. So, let's say, that the revenue boosting, on a company-wide basis was in the ~50% range. The company, in it's most recent report, stated a 49% Year-over-year quarterly revenue growth (meaning that Q3-2014 generated 49% more revenues than Q3-2013). That's a very impressive growth rate, and any company that is growing revenues so fast deserves a high premium (or, in Wall Street speak, "multiple") when sold. However, if the number is ~50% inflated, than sales are, basically, flat; and the core products are not growing -- meaning they have already topped out (or will do so soon).

In normal times, a ~50% over-reporting of revenues, extending over 3 quarters, is unlikely to be an innocent mistake and most likely deliberate fraud. When a company is about to be sold, it is a near certainty that this is a deliberate fraud. The intent of the fraud is to pretend that sales are growing faster than they really are so as to achieve higher multiples and sell the company for a higher price than would have been gotten legitimately. Once the company sold, there is no taking back; if the buyer didn't catch the fraud during due diligence, the seller gets away with it and the buyer is ****ed.

Salix CFO was apparently hoping that Allergan is so desperate for a Valeant-thwarting transaction that they would gloss over the due diligence, or even would knowingly buy a company at a fraudulently inflated price just to throw Valeant off it's back. This is why I give the Allergan due diligence team and Board such high marks -- even under the most intense pressure to get a deal done, they kept their cool and discipline, and walked away.

As a side note, everyone -- myself included -- thought that the barrage of sharply worded letters from major shareholders warning Allergan not to buy Salix without a shareholder vote is what derailed the Salix deal. This was the first (and thus far only) hint that the Board can be cowed by a sufficiently intense expression of shareholders' sentiment. Well, apparently, by the time those letters were penned, as best as I can reconstruct the timeline, Allergan had already walked away from Salix. Apparently, the Allergan Board is sufficiently determined that, if it believed the Salix deal is in the interest of shareholders, it would have closed the deal even in the face of blistering opposition from those same shareholders, and sufficiently disciplined that it wouldn't do a bad deal even if desperate.

So, what's next for Salix? First, a very serious housecleaning is necessary. The CFO is out (I'll put "even money" that he will face criminal charges -- since there is no way this happened without his knowing, blessing, and probably coordinating). I have to assume that the discussions and planning that went into making this fraud happen all took place outside board meetings (because the Salix board meeting minutes would have been available to the Allergan due diligence team -- the intended target of the fraud); which mean it is that much harder for those who were in on it to argue that they thought what they were doing was legitimate. I'm going to guess that a handful of individuals in accounting have a "get out of jail free" card in their hand. Specifically, that they sent some email to their direct manager (or the CFO, or CEO, or any board member, or even to HR) expressing concern and were told not to worry about it. For higher level members of the accounting department, and for all CPAs, that's not enough -- if they suspect fraud they need to whistle-blow or leave. (Question to Salix people: Did any member of the accounting department, particularly anyone with a CPA license, inexplicably resigned or was unexpectedly fired in 2014?). I think the CEO is as good as out too, but the board didn't fire him immediately because they can't just behead the organization and expect it to manage the biggest crisis in it's history while headless. I also think most (probably all) of this board will be out not much later (but again, not immediately, because this is not the time to run headless). One of the principal responsibilities of the Board of Directors is to exercise effective control over management, and this Board clearly didn't. I don't think any of the Board members will ever serve on another Board of a publicly traded company (if there are some external directors representing specific large investors, they might get a pass -- but even they will now be viewed as dinged). The next order of business is to deal with the Class Action Mills (aka, 'bloodsucking parasites'). That won't be easy, but if there is a solid Errors&Omissions insurance and the house is cleaned well enough, there might be a deal that can be reached that won't further damage the company.

Selling the company, before the house is cleaned, is not impossible; but very very hard (they could probably sell it for the current trading price of ~$90 -- with E&Y coming in and doing an out-of-cycle audit proving that, indeed, no value was destroyed since 12/31/2013 -- but not much more). The company could sell off individual assets, and buyers may be willing to take that route.

Back to the Allergan audience: I really hope you guys appreciate how strong your Board and senior management are -- especially as we see, right in front of our eyes, what the alternative looks like.

And one final line: Does anyone doubt me now, when I say that I don't believe in blowout quarters???

Dan.
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Thanks Dan I've reposted on Salix site. Appreciate you sharing all you knowledge. We are all in shock at Salix...best of luck to you and your Allergan family.
 




Question for Dan

Do you think that some of the Allergan board's recent action or non-actions ie not pursuing Salix because of what they saw during their review of their business, and not purchasing Shire because the price was too high and then the resulting events, Abbvie deal falling through and Salix accounting fraud, strengthen to boards position going into the 12/18 meeting?

As an Allergan employee I'm obviously biased here but if you get past all of the PR crap and just look at how Allergan's board has handled these situations as compared to the media BS Valeant/Ackman push it's hard to argue that they (Allergan board) are truly looking out for what's in the best interest of shareholders. Ackman/Valeant are obviously trying to steal the company at a discount (as evident by Ackman's last letter) while Allergan has driven up the price for shareholders and avoided bad deals. Even if Valeant pulled out right now the price would probably be in the $160 range which is still huge growth year to date.

I know the hedge funds, Ackman, and event based investors who bought in post 4/22 will want to vote out the board but anyone else who owns Allergan stock would be best served to keep the current board in place and take them on their word they will make the most of their balance sheet moving forward. Are over 51% of Allergan's shareholders event based hedge funds at this point?

Even selling to Actavis seems like a losing proposition, why give control of great products, services, & R&D to another CEO and board who's model is quit frankly not much different than Valeants? Actavis will slash jobs and don't have the capacity or talent to handle Allergan's R&D or commercial operations with the bevy of TRUE specialty products Allergan possess not the me to 10th in class products Actavis promotes.
 








  • Shoham   Nov 11, 2014 at 01:09: AM
Anonymous said:
Question for Dan

Do you think that some of the Allergan board's recent action or non-actions ie not pursuing Salix because of what they saw during their review of their business, and not purchasing Shire because the price was too high and then the resulting events, Abbvie deal falling through and Salix accounting fraud, strengthen to boards position going into the 12/18 meeting?

As an Allergan employee I'm obviously biased here but if you get past all of the PR crap and just look at how Allergan's board has handled these situations as compared to the media BS Valeant/Ackman push it's hard to argue that they (Allergan board) are truly looking out for what's in the best interest of shareholders. Ackman/Valeant are obviously trying to steal the company at a discount (as evident by Ackman's last letter) while Allergan has driven up the price for shareholders and avoided bad deals. Even if Valeant pulled out right now the price would probably be in the $160 range which is still huge growth year to date.

I know the hedge funds, Ackman, and event based investors who bought in post 4/22 will want to vote out the board but anyone else who owns Allergan stock would be best served to keep the current board in place and take them on their word they will make the most of their balance sheet moving forward. Are over 51% of Allergan's shareholders event based hedge funds at this point?

Even selling to Actavis seems like a losing proposition, why give control of great products, services, & R&D to another CEO and board who's model is quit frankly not much different than Valeants? Actavis will slash jobs and don't have the capacity or talent to handle Allergan's R&D or commercial operations with the bevy of TRUE specialty products Allergan possess not the me to 10th in class products Actavis promotes.
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Hello:

Just my guesses.

1. I do think the discipline and fortitude shown by the Board in avoiding making bad deals for both Shire and Salix takes much of the air out of Ackman's "Entrenched Board only looking out for themselves" argument, and that the voting shareholders are taking notice. They are not the only audience here. Judges ruling on future battles (and there are likely more to come) are too.

Nonetheless, unless this Board makes some Hard Power play to increase shareholder value, the "trust us to continue doing what we have been doing" argument won't win (my opinion). (As described in my posts at the time, the restructuring got Allergan more than halfway there; but still more Hard Power play is needed to win)

2. Over 90% of Allergan is held by institutions. Institutions have the luxury to decide, every day, if today it is in their advantage to be "event based" or "long term." In other words, they will vote the way they feel make them the most money, with neither loyalty to Allergan, Ackman, "event-ism," "long-term-ism," or anything or anyone.

3. While I'm not a naive enthusiast about Actavis, I don't see it as a losing play, and I don't see Actavis as just another Valeant wannabe. Actavis made it clear they value Allergan for it's R&D capacity and pipeline. So long as these are preserved, the value of the company is not destroyed. When the value is not destroyed, and some value is actually created in the transaction, it is possible to negotiate a deal where both sets of shareholders gain (and employees, for the most part, can gain -- or at least not lose -- as well). To my knowledge (anyone with actual experience please chime in and provide supporting- or counter-evidence), Actavis does not destroy companies it acquire. Granted, they never acquired anything as top-rated as Allergan, but with the company they will also inherit the people who run it; so why, in the world would they want to damage their expensive acquisition. Valeant's house-of-cards business model does destroy companies and they openly promise to do the same with Allergan.

My own, quite speculative, view is that what the shareholders want is to stretch this drama as long as possible (I appreciate that this is not what the employees want to hear). The longer the drama is stretched, the higher the prices that are being discussed. And if this turns into an ego battle (and maybe it already has for some of the combatants), then it's possible the bidding will start exceeding all rational numbers -- making the shareholder even happier. A vote to keep the current board will end the drama (Valeant will walk away, they said so, and it's hard to see how they could stay in the fight in any event). A vote to oust 6 board members will keep the fight going (with Ackman going to DE court and asking a judge to order a vote for his slate, and then going into another shareholder vote with more drama and more pandering to the shareholders and more opportunities for bid raises). It is therefore my prediction that if we get to December 18, the vote will be to oust the 6 Board members; but this will hardly be the end of the battle.

Of course, there is a good chance we won't get to December 18. If we have a signed Actavis deal, then December 18 is moot. A deal with Actavis will almost certainly have a hefty breakup fee (meaning that Allergan will have to pay Actavis a ton of money if Allergan shareholders vote against the deal), so any shareholder who thinks about voting against it will have to think twice if Valeant will be able to offer so much as to make up for the lost breakup fees and still outbid Actavis. (The traditional breakup fees is 3% of the value of the breaking company -- or about $6/share for Allergan. However, I wouldn't be surprised if Actavis insist on a much higher breakup fee -- say $15 -- as the price for making a higher bid, and Allergan readily agreeing. Ackman will 'explode,' but Allergan will be able to demonstrate that in exchange for the higher BUF, they were able to sell the company for more, so his explosion won't do him any good).

Right now, I'll put better-than-even-money on an Actavis deal. Of course, Allergan already walked away twice from better-than-even-money deals, both times wisely; so I suppose we should just wait to see if this one will hit, or if the fabled Allergan due diligence team will hit some red flags. We also still have the much promised, yet delivered, Valeant $200 raise (their small print did say it is predicated on their own share price going up, but the Allergan shareholders will choose not to have noticed the small print and tell Valeant that they are waiting to hear this $200 bid materializing)

Dan
 








Shoham said:
Hello:

Just my guesses.

1. I do think the discipline and fortitude shown by the Board in avoiding making bad deals for both Shire and Salix takes much of the air out of Ackman's "Entrenched Board only looking out for themselves" argument, and that the voting shareholders are taking notice. They are not the only audience here. Judges ruling on future battles (and there are likely more to come) are too.

Nonetheless, unless this Board makes some Hard Power play to increase shareholder value, the "trust us to continue doing what we have been doing" argument won't win (my opinion). (As described in my posts at the time, the restructuring got Allergan more than halfway there; but still more Hard Power play is needed to win)

2. Over 90% of Allergan is held by institutions. Institutions have the luxury to decide, every day, if today it is in their advantage to be "event based" or "long term." In other words, they will vote the way they feel make them the most money, with neither loyalty to Allergan, Ackman, "event-ism," "long-term-ism," or anything or anyone.

3. While I'm not a naive enthusiast about Actavis, I don't see it as a losing play, and I don't see Actavis as just another Valeant wannabe. Actavis made it clear they value Allergan for it's R&D capacity and pipeline. So long as these are preserved, the value of the company is not destroyed. When the value is not destroyed, and some value is actually created in the transaction, it is possible to negotiate a deal where both sets of shareholders gain (and employees, for the most part, can gain -- or at least not lose -- as well). To my knowledge (anyone with actual experience please chime in and provide supporting- or counter-evidence), Actavis does not destroy companies it acquire. Granted, they never acquired anything as top-rated as Allergan, but with the company they will also inherit the people who run it; so why, in the world would they want to damage their expensive acquisition. Valeant's house-of-cards business model does destroy companies and they openly promise to do the same with Allergan.

My own, quite speculative, view is that what the shareholders want is to stretch this drama as long as possible (I appreciate that this is not what the employees want to hear). The longer the drama is stretched, the higher the prices that are being discussed. And if this turns into an ego battle (and maybe it already has for some of the combatants), then it's possible the bidding will start exceeding all rational numbers -- making the shareholder even happier. A vote to keep the current board will end the drama (Valeant will walk away, they said so, and it's hard to see how they could stay in the fight in any event). A vote to oust 6 board members will keep the fight going (with Ackman going to DE court and asking a judge to order a vote for his slate, and then going into another shareholder vote with more drama and more pandering to the shareholders and more opportunities for bid raises). It is therefore my prediction that if we get to December 18, the vote will be to oust the 6 Board members; but this will hardly be the end of the battle.

Of course, there is a good chance we won't get to December 18. If we have a signed Actavis deal, then December 18 is moot. A deal with Actavis will almost certainly have a hefty breakup fee (meaning that Allergan will have to pay Actavis a ton of money if Allergan shareholders vote against the deal), so any shareholder who thinks about voting against it will have to think twice if Valeant will be able to offer so much as to make up for the lost breakup fees and still outbid Actavis. (The traditional breakup fees is 3% of the value of the breaking company -- or about $6/share for Allergan. However, I wouldn't be surprised if Actavis insist on a much higher breakup fee -- say $15 -- as the price for making a higher bid, and Allergan readily agreeing. Ackman will 'explode,' but Allergan will be able to demonstrate that in exchange for the higher BUF, they were able to sell the company for more, so his explosion won't do him any good).

Right now, I'll put better-than-even-money on an Actavis deal. Of course, Allergan already walked away twice from better-than-even-money deals, both times wisely; so I suppose we should just wait to see if this one will hit, or if the fabled Allergan due diligence team will hit some red flags. We also still have the much promised, yet delivered, Valeant $200 raise (their small print did say it is predicated on their own share price going up, but the Allergan shareholders will choose not to have noticed the small print and tell Valeant that they are waiting to hear this $200 bid materializing)

Dan
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Thank you Dan.

First let me say I'm on the commercial side, field based so this is probably why I'm more concerned about Actavis than you but I do know a fair amount about the company and this is what concerns me.

When they purchased Forest Labs a year ago, despite the company being called Actavist, Forest's management and systems were put in place so it's basically the old Forest labs. Not sure how much you know about them but from a commercial perspective they are one of the worst run companies in the industry. Poor immature management. Very cheap (like Valeant), stuck in a late 90's big pharma sales/marketing model. Allergan's true specialist products would suffer greatly if Forest/Actavist is running the show. They do not know how to sell/market medical devices or injectables.

Actavist's CEO is Brent Saunders. He was the CEO of B&L who sold to Valeant. He played a major part in Shearing Plough Selling to Merck. And was put in place by Carl Ichan, when he pulled the same power play with Forest that Ackman's doing with Allergan.

R&D. While they promise to keep Allergan's keep in mind their model is a lot like Valeant's in this way. They focus on the "D". They typically license products at the Phase III point from other companies that have been promoted in other markets, Euorpe for example. Not much research going on at all and because of this approach their products are just what we call in the industry "me too" products in crowded or genercized spaces, nothing even close to break through therapies. Their top products are SSRI/SNRI anti-depressants and a Beta Blockers these therapeutic classes are 25 and 35 years old respectively.

Saunders recently got in trouble for some shady actions regarding their Alzheimer's product Namenda, does not say much about his character.

I appreciate your feedback but in my opinion Actavist is a last ditch desperate action by Allergan and not a white Knight to save the day.
 




Anonymous said:
Thank you Dan.

First let me say I'm on the commercial side, field based so this is probably why I'm more concerned about Actavis than you but I do know a fair amount about the company and this is what concerns me.

When they purchased Forest Labs a year ago, despite the company being called Actavist, Forest's management and systems were put in place so it's basically the old Forest labs. Not sure how much you know about them but from a commercial perspective they are one of the worst run companies in the industry. Poor immature management. Very cheap (like Valeant), stuck in a late 90's big pharma sales/marketing model. Allergan's true specialist products would suffer greatly if Forest/Actavist is running the show. They do not know how to sell/market medical devices or injectables.

Actavist's CEO is Brent Saunders. He was the CEO of B&L who sold to Valeant. He played a major part in Shearing Plough Selling to Merck. And was put in place by Carl Ichan, when he pulled the same power play with Forest that Ackman's doing with Allergan.

R&D. While they promise to keep Allergan's keep in mind their model is a lot like Valeant's in this way. They focus on the "D". They typically license products at the Phase III point from other companies that have been promoted in other markets, Euorpe for example. Not much research going on at all and because of this approach their products are just what we call in the industry "me too" products in crowded or genercized spaces, nothing even close to break through therapies. Their top products are SSRI/SNRI anti-depressants and a Beta Blockers these therapeutic classes are 25 and 35 years old respectively.

Saunders recently got in trouble for some shady actions regarding their Alzheimer's product Namenda, does not say much about his character.

I appreciate your feedback but in my opinion Actavist is a last ditch desperate action by Allergan and not a white Knight to save the day.
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I have to agree! I think Actavist will be very much like Valeant would be. Perhaps not at first but 2 yrs in I can see alot of R and D being asked to go.
 




Headline on yahoo finance this AM

Why would our board do that now?

"Allergan amends shareholder meeting bylaws ahead of Dec. 18 meeting

Nov 12 (Reuters) - Allergan Inc changed its bylaws associated with calling a special shareholder meeting, about a month before such a meeting where William Ackman, the Botox maker's biggest shareholder, aims to replace most of Allergan's board.

Ackman, whose hedge fund Pershing Square Capital Management owns nearly 10 percent of Allergan, is pushing the company to sell itself to Valeant Pharmaceuticals International Inc , a move that Allergan has constantly rebuffed.

The amended laws now includes a provision that requires Allergan's board to call for a meeting within 90 days of a valid request rather than exercise its discretion in setting a date, Allergan said in a statement on Wednesday.

The company also reduced the amount of information required to be submitted by a shareholder calling for a special meeting, and eliminated the requirement that the shareholder disclose who else is "acting in concert with the proposing person".

Ackman and Valeant have gathered investors representing an additional 25 percent of Allergan shares in order to call the special meeting on Dec. 18. They want to use the proxy battle as a platform to force Allergan to open talks about a deal.

The amendments to the bylaws are to ensure next month's meeting "is focused on the question of value," Michael Gallagher, Allergan's lead independent director said.

"Allergan remains confident that it can create more value than Valeant Pharmaceuticals International Inc's offer to acquire the company's shares," Gallagher said.

(Reporting by Natalie Grover in Bangalore; Editing by Savio D'Souza)"
 




  • Shoham   Nov 12, 2014 at 10:26: AM
Enter Revlon Mode

From earlier post:

Shoham said:
[...]

I thought I'd spend some time preparing the readers with regards to the legal standards board of directors are required to follow.

[...]

3. The Revlon standard (aka auctioneer mode): Once the board has decided that the best, or inevitable, course of action for the company is a merger or sale, the Unocoal standard goes out and the Revlon standard kicks in. The Board becomes an auctioneer -- an agent of the seller (the shareholders) -- whose job is to get the best price for the company. In this mode, the interests of other constituencies are no longer relevant; only the shareholders matter. If multiple bidders are making credible cash offers, the board may not accept any offer other than the highest one. Of course, even in auctioneer mode, the Board may still decide that the highest bid is inadequate and that staying independent is the best interests of the shareholders (even if the shareholders think otherwise). Unless the bid includes equity (or other obligations) in the acquirer, it is none of the Board's business what the buyer intends to do with the company; just how much they can get for it. If bidder A's best and final offer includes keeping all employees, and bidder B is offering $1 more and plans to fire most employees; the auctioneer is forbidden from accepting bidder A -- it can either take bidder B or provide evidence that it is better off staying independent (of course, in such a close-call scenario, the employees may choose to ally with bidder A and throw in $1.01 to help him top out). Bidders who offer non-cash considerations (such as Valeant offering shares) give the board flexibility to value those considerations using their best judgement. While Wall Street considers the trading value of a stock to be the best metric of it's value, Boards are under no compulsions to do likewise. If the Board thinks Valeant's share are overvalued, or their merger business plan will destroy value, they are completely free to value the offered shares accordingly. The Revlon standard, you guessed it, is named after another 1980s case involving Revlon (defender Revlon lost the lawsuit and the takeover battle).


Dan.
Click to expand...

From Bloomberg this morning: "Actavis Said in Talks to Acquire Allergan for Over $60 Billion," with the text adding "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 a share, said two of the people."

This means the Revlon Mode has almost certainly been entered.

My guess, just a guess, Actavis will agree to come closer to $210 than $200, provided Allergan offers a bigger-than-traditional breakup fee; to which Allergan will readily agree (because it will make it that much harder for Valeant to compete).

Dan.
 








Re: Enter Revlon Mode

Shoham said:
My guess, just a guess, Actavis will agree to come closer to $210 than $200, provided Allergan offers a bigger-than-traditional breakup fee; to which Allergan will readily agree (because it will make it that much harder for Valeant to compete).

Dan.
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What's so wrong with competing ?
 








  • Shoham   Nov 13, 2014 at 01:22: AM
Anonymous said:
Headline on yahoo finance this AM

Why would our board do that now?

"Allergan amends shareholder meeting bylaws ahead of Dec. 18 meeting

[...]
Click to expand...

Probably moot, because the Actavis deal is now likely; but if Actavis doesn't happen, and we do go into a special meeting, Allergan Board would need to fight for every vote. If there is even one major shareholder out there who thinks the current bylaws are too onerous (as Ackman, ISS, and even the DE judge seem to believe), but would be ok with retaining the Board if those bylaws were fixed; then Allergan would rather fix them proactively than be forced to by a vote.

Dan.
 








Anonymous said:
And what woll happen to valeant stock if allergan and Actavis agree to a deal? Does the potential for zoetis provide a safety net for them?
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Read Ronald Barusch's wsj dealpolitik column "Pershing Square Takes on a Well-Armed Target in Zoetis", 12 Nov 2014. It sounds like Ackman will have difficulty, unless Zoetis really wants to be acquired by Valeant, or unless Ackman has more ground-breaking (and law-breaking) tricks up his sleeve, like he and Pearson pulled on Allergan. Zoetis has much stronger anti-takeover defenses than Allergan has.
 








Shoham said:
Probably moot, because the Actavis deal is now likely; but if Actavis doesn't happen, and we do go into a special meeting, Allergan Board would need to fight for every vote. If there is even one major shareholder out there who thinks the current bylaws are too onerous (as Ackman, ISS, and even the DE judge seem to believe), but would be ok with retaining the Board if those bylaws were fixed; then Allergan would rather fix them proactively than be forced to by a vote.

Dan.
Click to expand...

Dan I appreciate all of your comments. You seem to be able to predict whats happening next at every move. Just curious, how much side tail are your getting from all this blogging? Please be specific about the details...
 




Dan - help us understand one of judge carters rulings, which is after he issued his ruling on November 4th the judge stated that no proxy solicitations can take place until the corrective disclosures were made. Proxy solicitations can generally be pretty broad right?

Doesn't it seem like anything that's happened over the last 10 days could be violative? Aren't they effectively soliciting when they are meeting wth investors or working their magic? If so what recourse could Allergan have. Seems like Pershing is just doing what they want.

Side note: I love that the revised disclosures use the words "disgorging of profits" in reference to what would happen if he class actions you referred to actually won.
 




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