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As detailed in my prior thread ("When the company is doing well, management is in control, when not, the investors are"), I don't think this merger will happen.  Whether, or when, anyone can see the beginning of the end of this deal, is a matter for conjecture -- something I leave for the professional Wall Street class.


The basic alignment of power is largely as it has been all along: Valeant has largely played all their cards, and are slowly progressing through their steps (although they haven'y even reached first base -- gathering 25% to call a special meeting), whereas Allergan has been keeping Valeant off balance with "soft powers" (Doctor letters, media barrage, political attention, lawsuit, etc.) only and still have a lot of "hard power" (acquisitions, stock buyback, etc.) available.


In the meantime, delays work for Allergan favor.  With each passing quarterly report, Allergan is improving earnings and outlook (it has a lot of stored power, from years of being unchallenged, that it can release); while Valeant is reducing guidance (it has a lot of skeletons that are meant to be glossed over by frequent acquisitions).  The short-term momentum investors (who normally like Valeant) are at risk of losing patience.  Non-shareholder constituencies (doctors, politicians, regulators, media, courts) are making their voices heard.  And, generally, the "sweet-spot timing" of the deal is being spoiled.


We may have already seen some of the "sweet-spot timing" spoilage:  A key ingredient of the Valeant deal structure is the ability to finance the cash portion with Junk bonds, taking advantage of historically low interest rates.  Well, last week has seen global sharp drops in junk bonds, and a corresponding increase in (junk bonds) interest rates.  This damages the profitability and prospects of the deal, and Valeant's ability to offer any more cash.


Dan.