Successfully repelling an unsolicited bid is, and should be, a mixed blessing for any company. In the case of ISTA Pharmaceuticals (ISTA) and Valeant (VRX), it's pretty clear that Valeant was attempting to exploit investor fatigue and pessimism with a low-ball bid. Now that Valeant has retreated, it falls on management to show that they can deliver on that value that they claim Valeant (and, by implication, the broader stock market prior to the bid) failed to recognize.
Valeant Steps Away
Valeant had always said that its $7.50/sh bid for ISTA had a lit fuse attached (an expiration date of January 31), and management decided to pull it a day early. Management at Valeant claimed that this was due to a "lack of progress." But the reality is that ISTA was doing exactly what it said it would do - shopping around for a better offer.
Read more here:
Okay, ISTA Management, It's Time To Step Up
Showing posts with label Cephalon. Show all posts
Showing posts with label Cephalon. Show all posts
Monday, January 30, 2012
Wednesday, May 4, 2011
Investopedia: Teva And Cephalon Solve Each Other's Problems
Whenever companies announce a deal, managements try to paint it as a great move for each shareholder group. Experience says that is rarely the case, but Teva Pharmaceuticals' (Nasdaq:TEVA) acquisition of Cephalon (Nasdaq:CEPH) really could be a case where that is true. This deal solves significant, but different, problems for each company.
The Terms Of The Deal
Unlike Valeant's (NYSE:VRX) attempt at a hostile bid (or its thus far unsuccessful attempt to find a friendly agreement with Cephalon's board), Teva pursued a friendly offer and both boards agreed to it unanimously. Teva will acquire Cephalon in an all-cash deal that pays Cephalon shareholders $81.50 - 12% more than what Valeant had offered. The deal amounts to about $6.8 billion for Teva, which will have to raise debt for the bid.
Not Great, But Better
Cephalon shareholders may still grumble at the terms of the deal. After all, less than six times trailing EBITDA and about two times trailing revenue is not an exciting premium. What's more, in recent memory Pfizer (NYSE:PFE) paid for more for King and Abbott (NYSE:ABT) paid for Kos.
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The Terms Of The Deal
Unlike Valeant's (NYSE:VRX) attempt at a hostile bid (or its thus far unsuccessful attempt to find a friendly agreement with Cephalon's board), Teva pursued a friendly offer and both boards agreed to it unanimously. Teva will acquire Cephalon in an all-cash deal that pays Cephalon shareholders $81.50 - 12% more than what Valeant had offered. The deal amounts to about $6.8 billion for Teva, which will have to raise debt for the bid.
Not Great, But Better
Cephalon shareholders may still grumble at the terms of the deal. After all, less than six times trailing EBITDA and about two times trailing revenue is not an exciting premium. What's more, in recent memory Pfizer (NYSE:PFE) paid for more for King and Abbott (NYSE:ABT) paid for Kos.
Please continue through the link below:
http://stocks.investopedia.
Thursday, March 31, 2011
Investopedia: Valeant Offers A Princely Sum For Cephalon
The news Tuesday evening that Cephalon (Nasdaq:CEPH) had received a bid was not all that surprising. Cephalon had long been a fixture on analysts' short-lists of biotech/specialty pharma companies that could be sellers in M&A transactions. To see the bid come from Valeant (NYSE:VRX), though, was surprising as few people had talked about this pharma company as an active bidder in high-value deals.
That said, and while the deal is far from a sure thing at this point, this deal makes quite a bit of sense and may be the best opportunity for Cephalon shareholders to get value for some time.
The Terms of the Deal
After what appears to be weeks of frustrated attempts to strike a friendly deal, Valeant went public with an unsolicited bid of $5.7 billion for Cephalon. This deal would deliver $73 a share in cash to Cephalon shareholders, an amount that Valeant would fund with debt from Goldman Sachs (NYSE:GS).
All in all, it does not look like a bad bid for Cephalon. It represents a 24% premium to Cephalon's prior close, and a 12% premium to the consensus analyst price target on the shares (for the very little that those are often worth). The deal also represents an EV/EBITDA of just under five and a forward P/E of over eight on 2011 earnings and almost 13 on 2012 earnings.
To read the full article, please click the link:
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Wednesday, November 17, 2010
Human Genome Takes A Big Step Forward
One small step for an FDA advisory panel, one leap forward for biotech company Human Genome Sciences (Nasdaq:HGSI).
Late Tuesday, an FDA advisory panel voted by the surprisingly wide margin of 13-2 to recommend approval of HGSI's Benlysta for the treatment of lupus. This drug, which top-tier pharmaceutical company GlaxoSmithKline (NYSE:GSK) has been developing under license from HGSI, would represent the first new lupus drug in more than 50 years - a potentially big step forward for the treatment of a disease that is life-altering (and life-threatening) but still not well-understood by doctors or scientists. (For more, see Measuring The Medicine Makers.)
A More Compassionate Panel?
Benlysta's progress toward approval was not smooth or worry-free for HGSI investors. The FDA spooked the market a bit a few days ago when the agency released its pre-panel meeting assessment of the lupus drug candidate. Although these reviews are supposed to be tough, critical, and generally negative, it did focus on what it called "mild" efficacy and the fact that the drug does not seem to benefit African Americans much at all.
Benlysta's progress toward approval was not smooth or worry-free for HGSI investors. The FDA spooked the market a bit a few days ago when the agency released its pre-panel meeting assessment of the lupus drug candidate. Although these reviews are supposed to be tough, critical, and generally negative, it did focus on what it called "mild" efficacy and the fact that the drug does not seem to benefit African Americans much at all.
Nevertheless, the panel seemed to acknowledge that mild efficacy is still efficacy and that the impact of the drug varied with each patient. In other words, it may be significantly effective for some patients, and the side-effects did not outweigh that potential benefit.
Please follow the link for the full story:
http://stocks.investopedia.
Wednesday, August 11, 2010
The Curious Case of PPCO
Late on Monday, Endo Pharmaceuticals (Nasdaq:ENDP) announced that it was acquiring its small partner Penwest Pharmaceuticals (Nasdaq:PPCO) for $5 per share, all of which is to be paid in cash. Normally, this would be a "no big deal" type of announcement - little deals happen all the time, and there would not be much significance to the deal beyond its impact on just the two companies. This deal is a bit more curious, though.
Somebody Seemed to Know Something
If you look at the behavior of Penwest's stock and options prior to the announcement of the deal, you too may find your eyebrows lifting a bit. The press release for the deal hit the wires at 3:30pm, but Penwest's stock started moving relatively early in the day on Monday, continuing a move that began roughly in the middle of the day on the preceding Friday. Keep in mind, this was a stock that tended to plateau for a few months at a time, so it was not as though big moves were normal.
To read the complete article:
http://stocks.investopedia.
Somebody Seemed to Know Something
If you look at the behavior of Penwest's stock and options prior to the announcement of the deal, you too may find your eyebrows lifting a bit. The press release for the deal hit the wires at 3:30pm, but Penwest's stock started moving relatively early in the day on Monday, continuing a move that began roughly in the middle of the day on the preceding Friday. Keep in mind, this was a stock that tended to plateau for a few months at a time, so it was not as though big moves were normal.
To read the complete article:
http://stocks.investopedia.
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