(Total Views: 577)
Posted On: 06/24/2020 8:15:00 AM
Post# of 155592
Re: crazyjogger925 #38864
Crazy jogger
Thanks for you post. Your buyout plan is right on in my opinion.
No one is going to pay $70 or even $30 outright for the stock right now that is trading at $4.48.
Couple of reasons
- No one is going to pay in today’s dollars for revenues 2-3 years from now
- Companies's expect returns on their investment so if they want a 7% return in capital investment they need to pay under full value now to get a return for their capital and any risk.
- board of directors can’t approve paying 20 or 30 Billion for a stock that is worth under 3 billion now
BUT
CVR’s is a way to make this deal work for both parties
See the structure of the recent mega deal by BMS for CELGENE - it used
CVRs
Bristol-Myers Squibb Company (NYSE:BMY) and Celgene Corporation (NASDAQ:CELG) today announced that they have entered into a definitive merger agreement under which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion. Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones.
Thanks for you post. Your buyout plan is right on in my opinion.
No one is going to pay $70 or even $30 outright for the stock right now that is trading at $4.48.
Couple of reasons
- No one is going to pay in today’s dollars for revenues 2-3 years from now
- Companies's expect returns on their investment so if they want a 7% return in capital investment they need to pay under full value now to get a return for their capital and any risk.
- board of directors can’t approve paying 20 or 30 Billion for a stock that is worth under 3 billion now
BUT
CVR’s is a way to make this deal work for both parties
See the structure of the recent mega deal by BMS for CELGENE - it used
CVRs
Bristol-Myers Squibb Company (NYSE:BMY) and Celgene Corporation (NASDAQ:CELG) today announced that they have entered into a definitive merger agreement under which Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction with an equity value of approximately $74 billion. Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones.
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