Glossary of Hostile Takeover Terms with Discussion
- Thread starter Shoham
- Start date
A question for you Dan.
Do you think that Brent Saunders' pledge not to raise prices significantly will have much impact on AGN's ability to deliver on its double digit growth promise? A nice PR job, but it seems to me that it was an unwise statement, especially now that it's clear that a lot of the more established products are under a lot more pressure than anticipated.
Do you think that Brent Saunders' pledge not to raise prices significantly will have much impact on AGN's ability to deliver on its double digit growth promise? A nice PR job, but it seems to me that it was an unwise statement, especially now that it's clear that a lot of the more established products are under a lot more pressure than anticipated.
Dan,
Great write up. I would add one thing that I think you might be overlooking: a forced write down of assets. VRX's auditors may force them to write down remaining assets (goodwill) to reflect the reality that they are now not worth what is on the books. This reduces the equity that VRX so desperately needs.
My theory on the "core" vs "non-core" assets was that it was a way for VRX to dump smaller businesses for less than ideal prices but also avoid a large write down of the rest of their assets because they would argue that they are core assets and thus command a different accounting treatment than the non-core assets.
My guess is that they couldn't get anyone to bite on those non-core assets and are now selling the core assets out of necessity so as to kick the can down the road a little further.
Great write up. I would add one thing that I think you might be overlooking: a forced write down of assets. VRX's auditors may force them to write down remaining assets (goodwill) to reflect the reality that they are now not worth what is on the books. This reduces the equity that VRX so desperately needs.
My theory on the "core" vs "non-core" assets was that it was a way for VRX to dump smaller businesses for less than ideal prices but also avoid a large write down of the rest of their assets because they would argue that they are core assets and thus command a different accounting treatment than the non-core assets.
My guess is that they couldn't get anyone to bite on those non-core assets and are now selling the core assets out of necessity so as to kick the can down the road a little further.
I agree Dan, Saunders will be given one more chance to try and score--he will be most likely out if he strikes just one more. But who could take on this hugely pieced together company? Possibly a forced spinoff of original Allergan?
- Shoham Nov 04, 2016 at 01:41: PM
Shoham
Member
I think this is a typical instance of "getting ahead of the [political] curve"
When the politicians are loudly complaining about something, one approach is to continue doing business as usual until new laws or regulations force otherwise (and, meanwhile, to spend lobbying resources to delay and mitigate). The risk is that by being perceived to be on the wrong side of the issue, you may become defenseless if the rule makers think they can score points by slamming you. Another approach is to jump "ahead of the curve" with some non-binding commitments to respect the spirit of the complaint. If enough of the industry gets on board with such commitments, then the politicians may declare a victory and move on without changing the rules. That's always better, for all involved, than a new layer of rules complexity.
(For example, Tobacco makers that claimed, for decades, that smoking is not harmful were perceived on the wrong side of the issue and got slammed with a huge array of rules and taxes; election exit polling organizations all committed not to release results before the polls closed -- so as to not discourage evening voters -- were perceived to be on the right side of the issue and remained unregulated).
As for actually keeping the commitments, there is always some flexibility. If new rules are passed, then you just follow the rules (even if they turn out to be different. For example, if the new rules don't prohibit big price hikes but requires some government board to sign off on such) instead of the commitments and still claim the moral high ground that you were on the right side of the issue before it was mandated. If no new rules are passed, but there is a general sense that the industry is on notice, you keep as much of the commitment as is necessary to keep the status quo and hope the rest of the industry does likewise. If, after some time, the spotlight has moved on, and no new rules have been enacted, you slowly and quietly work your way out of keeping the commitment and behave in a manner that is compatible with whatever the reality of the time dictates.
Dan.
WOW. Idea of $AGN splitting into two companies will begin to “gain substance” if the stock does not recover, Bernstein note says
Wow!!
Idea of $AGN splitting into two companies will begin to “gain substance” if the stock does not recover, Bernstein note says
Dan you talked about three strikes. With the recent fall in share price do you think that could be strike 3? He even overpaid for allergan shares in the buyback!!!
And what are your thoughts about Icahn off
Loading a large portion of his position in AGN? Would that be the trigger for the 3rd strike?
Hi Dan,
I wish I had found this thread before jumping into AGN late this summer and riding it down.
I appreciate all the time and insight you and other community members have shared here.
I wish I had more to add but I'd like to please ask your thoughts on
1. ASR - is it worrisome that with $8B ASR, stock is still at $200 or lower?
2. Management - would they ever bring Pyott back; would he agree; would it boost share price; what about if legacy Allergan were spun off as suggested above and he could run it again?
3. Might there be any accounting irregularities/what is likelihood? Does huge difference between GAAP and Non-GAAP have any significance for AGN? Is it true that they must continue M&A for accounting purposes and not necessarily for growth? Seems like a very scrupulous company that has shareholders' interests at heart but is there possibility it could fall on lack of transparency etc or is general bad news already reflected by share price of $190 to $200.
4. Any catalysts in the next six months to increase share price? Will earnings be in line this quarter? I've been reading thread on three strikes and after already taking responsibility for earnings miss sees like no other excuse if they come in short. Was hoping for positive news on TBRA from recent Boston liver conference, but heard nothing; could positive phIII have much of an impact?
I apologize if questions could be better or clearer; in short, though I've read your other posts that you are not able to predict going forward, but do you have a feeling we're safe here at $190 to $200 or will we drop lower and finally do you think we can see $250 or higher again in 2017?
Thank you for reading.
I wish I had found this thread before jumping into AGN late this summer and riding it down.
I appreciate all the time and insight you and other community members have shared here.
I wish I had more to add but I'd like to please ask your thoughts on
1. ASR - is it worrisome that with $8B ASR, stock is still at $200 or lower?
2. Management - would they ever bring Pyott back; would he agree; would it boost share price; what about if legacy Allergan were spun off as suggested above and he could run it again?
3. Might there be any accounting irregularities/what is likelihood? Does huge difference between GAAP and Non-GAAP have any significance for AGN? Is it true that they must continue M&A for accounting purposes and not necessarily for growth? Seems like a very scrupulous company that has shareholders' interests at heart but is there possibility it could fall on lack of transparency etc or is general bad news already reflected by share price of $190 to $200.
4. Any catalysts in the next six months to increase share price? Will earnings be in line this quarter? I've been reading thread on three strikes and after already taking responsibility for earnings miss sees like no other excuse if they come in short. Was hoping for positive news on TBRA from recent Boston liver conference, but heard nothing; could positive phIII have much of an impact?
I apologize if questions could be better or clearer; in short, though I've read your other posts that you are not able to predict going forward, but do you have a feeling we're safe here at $190 to $200 or will we drop lower and finally do you think we can see $250 or higher again in 2017?
Thank you for reading.
In all seriousness and sincerity, is AGN another VRX? I used to read those headlines and say no way. From a seeking alpha article, I have begun to question if they have been using financial engineering instead of true top line driven growth such as from legacy AGN to boost share price. Can anyone comment? I am very much long and would like to eliminate this possibility as I sit tight and hold and wait for management and company to bring stock back to where it was trading just a few months ago- by the way, will they be successful in doing so?
- Shoham Nov 19, 2016 at 02:50: AM
Shoham
Member
Thanks for your kind words. As you noted, I can't predict the market. I can only attempt to interpret what investors are communicating through their bids, which determine share prices.
Unlike Valeant, before it imploded, I am not seeing massive fraud or opacity. There is definitely more emphasis on financial engineering versus old-fashioned value creation as in the Pyott days; but Pyott was a real outlier, whereas what we have now is more mainstream management style (as regrettable as that may be).
The price might go on to erode some more, or it might recover, I have no way of telling; of course, but I would venture to opine that a Valeant-style meltdown doesn't seem to be in the cards.
Dan.
I really appreciate you sharing your thoughts regarding AGN , VRX.
Thank you very much,
Thank you very much,
I think these numbers are going lower before they go higher so I would wait. He only way AGN will ever see $225-250 in my opinion is higher revenues and EPS during each reporting quarter. That won't happen for awhile so I don't expect to see the stock climb as much as a sell off of hedges and shorts in the game.
Saunders has to quit the bullshit and grow this company organically or sell it to someone who wants to pay $275-300/share and that seems highly unlikely.
Well Saunders just bought $1 million worth of shares (5,250 shares) in after hours, so we have a big buyer.
Clearly done to get interest in the stock and the fact he can easily afford the losses. Need a push somewhere but that's not going to do it.
"With such a high valuation and continuing losses alone, it seems likely to this investor that there is more downside to the shares.
Icahn sold. I think he sold early." Seeking Alpha AGN Ichan sells Allergan
Doesn't look pretty
Many have said that AGN shares are still being sold off (harvesting losses for 2016 for tax purposes).
I tend to think due to the negative press that AGN will miss numbers again come Feb 2017. EPS should in theory be better due to the buyback, but I think there is very low interest in AGN due to many factors such as the risk it took buying companies with huge risk in areas of research where phase 3 drugs could fail in the clinic. If this happens then not only does the share price sink, but confidence in management sinks, and I doubt Saunders survives that blunder. Investors will wait to see what the first half of 2017 brings. This stock could sink to the 175 range before any up tick but I doubt 225-250 will happen till late 2017 at the earliest. 300 only if they hit a home run with a phase 3 or Pfizer comes calling again due to some deal Trump works out with the FEDs?