sherlock: Thanks for your latest excellent and thought provoking post regarding future LL transactions. As hundreds of board members read your post, my guess is that a substantial majority will heartily agree with the advice and suggestions you have made to CYDY's brain trust and BP negotiators aimed at harnessing "shared opportunity and mutual self-interest ... anchored in shared values." While lauding the virtue of your sentiments, my experience participating in negotiations suggests they are far more aspirational than realistic. To be clear, my world was litigation (with emphasis on trials and appellate arguments), not transactions, but settling a lawsuit was a transaction that mirrored many aspects of corporate transactions like buyouts and partnerships. And in the dozens of face to face settlement negotiations and mediations in which I participated, every participant's overriding goal was achieving maximum value, not "fair value" --- although the skillful use of Leverage by all sides often ultimately produced a reasonable facsimile of the latter. But do not expect that BPs will give a rip about fairness for CYDY, its shareholders, or patients in any BO or partnership negotiations. It will be on CYDY to drive the best bargain that its Leverage can deliver.
But when I previously discussed garnering multiple bidders for LL as a crucial aspect of of creating additional Leverage for CYDY, beyond the seemingly unique qualities of LL, I was derelict in not acknowledging the negotiating value of BP's primary Leverage --- CYDY's size (the lack thereof) and financial condition, which bears on your discussion with seemingly-harmless "that a buyout would be a sellout." I heartily concur that relying on Dr Jay to orchestrate the delivery of LL to the masses of patients that need it or will need it in the future would be far better than a BP alternative and that going it alone, if CYDY could pull it off, would likely provide a greater ultimate return to CYDY shareholders than even a seemingly generous BO -- but that's a big IF, and none of us board members or shareholders can possibly be in a position to keenly evaluate all of the moving pieces going it alone would entail. But the BPs would be far more qualified to do so -- which brings me back to BP's Leverage regarding CYDY's size and financial condition. Even with 3 or more serious and active BP bidders, but without being privy to the actual negotiations, we shareholders/board members would have no vantage point nor ability to critique how well each participant used and deflected Leverage to achieve its goal of maximum value. Consequently, if CYDY were to announce in the future what most might perceive as a disappointing proposed BO number, while it will be very easy to characterize such a number as a sellout, doing so without knowing all the moving parts that produced that number would, in my opinion, be irresponsible.
So, I don't know whether it's better or not to go it alone, or the full risks involved in even attempting to do so. If a BO offer were to be made, I will obviously have a visceral reaction to the number, but an incomplete ability to construe the fairness of it. But I would pay very close attention to the rationale provided by CYDY management for an approval vote, starting with a considerable trust in Dr Jay, the guy living on the houseboat, to equitably parse the LL present value/availability conundrum.
Sorry for such another long and windy response to your post, sherlock, but you're dealing with the ramblings of an old lawyer who's been out of the loop for the last 25 years. Time for a nap.
But when I previously discussed garnering multiple bidders for LL as a crucial aspect of of creating additional Leverage for CYDY, beyond the seemingly unique qualities of LL, I was derelict in not acknowledging the negotiating value of BP's primary Leverage --- CYDY's size (the lack thereof) and financial condition, which bears on your discussion with seemingly-harmless "that a buyout would be a sellout." I heartily concur that relying on Dr Jay to orchestrate the delivery of LL to the masses of patients that need it or will need it in the future would be far better than a BP alternative and that going it alone, if CYDY could pull it off, would likely provide a greater ultimate return to CYDY shareholders than even a seemingly generous BO -- but that's a big IF, and none of us board members or shareholders can possibly be in a position to keenly evaluate all of the moving pieces going it alone would entail. But the BPs would be far more qualified to do so -- which brings me back to BP's Leverage regarding CYDY's size and financial condition. Even with 3 or more serious and active BP bidders, but without being privy to the actual negotiations, we shareholders/board members would have no vantage point nor ability to critique how well each participant used and deflected Leverage to achieve its goal of maximum value. Consequently, if CYDY were to announce in the future what most might perceive as a disappointing proposed BO number, while it will be very easy to characterize such a number as a sellout, doing so without knowing all the moving parts that produced that number would, in my opinion, be irresponsible.
So, I don't know whether it's better or not to go it alone, or the full risks involved in even attempting to do so. If a BO offer were to be made, I will obviously have a visceral reaction to the number, but an incomplete ability to construe the fairness of it. But I would pay very close attention to the rationale provided by CYDY management for an approval vote, starting with a considerable trust in Dr Jay, the guy living on the houseboat, to equitably parse the LL present value/availability conundrum.
Sorry for such another long and windy response to your post, sherlock, but you're dealing with the ramblings of an old lawyer who's been out of the loop for the last 25 years. Time for a nap.
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