Glossary of Hostile Takeover Terms with Discussion

[Shoham]

My response

1. What you said it is possible, but consider the leverage of a unsecured creditor. Now the cross-default clause is waived, so unsecured creditors can push for an event of default and put VRX into bankruptcy--however, only secured lenders receive interest during bankruptcy, and most likely unsecured lenders would be impaired if a 363 sale (of all core assets) is used to pay down debt. Moreover, there is something called lenders' liability. I don't see why unsecured lenders want to do that, except for a small subset of lenders (distressed debt investors), however, the current bond prices are too high for distressed investors. Looking at the current holders of VRX credit, you don't see many distressed players. Unsecured lenders can use this as a negotiation tactic to increase coupon rate, but they are still behind all secured lenders and they have everything to lose during bankruptcy.

Hi Lin:

If the unsecured creditors are even under the slightest pressure, then the equity holders are effectively wiped out. This is another one of those "you can't have it both ways" situations: If the company is worth more than the sum of it's debt (meaning it has positive equity), then even the unsecured lenders are, effectively, secured. They can call for a liquidation and know that they will be paid every last penny (including interest) before the shareholders get anything. If they are at a risk of impairment, then the company is worth less than the sum of it's debt -- in which case, the longer they wait, the less they will get. In either case, the unsecured creditors are better off calling for default than suffering in silence.

While the company is allowed to continue to operate, it is burning cash like crazy (or creating future cash liabilities). Even if beforehand they were actually solvent (meaning that their cash flow could service their debt -- something I have long speculated is not the case), they sure aren't now. In crisis mode, there are a lot of constituencies that are absolutely critical for any chance of turnaround, and each is now screaming for extra cash if they are to play along. We just saw significant cash thrown at the secured debtors (probably, among the cash-screaming constituencies, one of the easiest to satisfy -- and it wasn't cheap). There are plenty of other constituencies: Key employees that will need a retention bonus; new CEO (who will probably bring in a whole new team) who will need serious cash to jump into this hornet nest; doctors who may be abandoning the brand; payers; etc. All this cash is coming out of the pockets of the unsecured creditors (after the shareholders are wiped out), and every day that passes, there is less left for them.

On a good day, Valeant was worth no more than the sum of it's parts. It was an eclectic collection of unrelated businesses. Ackman and MP were speaking of this "Platform," but, lets get real; what do toe fungus cream and female sex drive pills have to do with each other? (I'm seriously resisting an urge to make a joke here). Right now, however, arguably, it is worth less than the sum of it's part (because the brand damage, employee demoralization, lack of investment cash, political spotlight, etc.; are affecting all parts of the business, even those parts that would have been viable otherwise). It is better to find a nice home to all the business units where they will no longer suffer the collective calamity that is Valeant. If the management team is not doing this, then every day the debt holders delay taking charge away from management is less eventual liquidation value.

Dan.

 

[Shoham]

I'm a day behind, and Valeant is already creating a backlog of comments-worthy events.

Let's start with yesterday: After MP missed a deposition subpena, Valeant issues a press release urging him to fully cooperates with the Senate investigation.

Say what???

The last time I checked: disregarding a Senate subpoena is a criminal offence. Not the kind where they send the cops to arrest him the next day; they first go through a 'contempt of Congress' motion, and then a doj investigation, and, in the meantime he can agree to come and testify and be clear; but still. (And, in any event, even if he comes, he doesn't have to say anything. He can just envoke the 5th -- meaning, refuse to testify unless he gets criminal immunity for his Valeant transgressions; something they'll never give him because they all want to see him in prison).
Also, last time I checked, he is still the CEO, and CEOs still report to the Board; so they can just order him to testify, rather than issue a Press Release 'urging' him.

And now, today: first bond holder, as predicted here, informed VRX of intent to issue notice of default. Maybe they just want cash to shut up, or maybe they really want to start liquidating. It doesn't matter. The process is rolling along, with ever-shorter deadlines, and no game-changer in sight (at least not publicly).

Dan.

PS: There, again, have been some inappropriate postings here. I now automatically hit the 'report' button for abusive posts. If others did likewise, CP, hopefully, will remove the offending posts and deprive the trolls the pleasure of soiling this thread.

 

[anonymous]

Looks like one of the creditors is calling a default.

"The Wall Street Journal reported earlier on Tuesday that Centerbridge Partners LP intends to call a default.

The move would start a 60-day period during which the embattled drugmaker would have to file its annual report or potentially be forced to repay the bonds early, the WSJ reported. (http://on.wsj.com/1TPIVpH)"


On seeking alpha all the comments are treating this as a nonevent as it gives VRX 60 days to file annual report.

So, what does this mean?

 

[P551]

So you are saying we won't see $300 for years? That is quite a let down for employees and retirement funds. It's possible with Teva the share price may climb a bit but as of today the stock is almost $120 off its high. Perhaps this could also be the reason for the sell off in that shareholders don't want to wait more than two years to see Allergan stock turnaround given its volatility to media, politics and growth strategy. Brent Saunders was given too much too quickly to successfully drive honest strong shareholder growth--one has to wonder what Saunders thoughts are on his stock diving.

I'm not sure I'm saying that, but it's clearly all about Teva right now. It appears that the acquisition model is not in favor now, for the moment. What BS needs to do is show investors that he can lead the company through this transition using classic business approaches. The new AGN never came close to integrating the legacy businesses before PFE came on the scene. BS needs to show that the company is stable and able to deliver consistent growth without the acquisition fuel. Pyott, like him or not, was steady at the helm and from an older school of thought. That older school is in session now!

I'm not good enough to predict any kind of realistic stock price moves. My gut feel is that $300+ is not in the cards near term. But AGN is a solid business. With the Teva deal closed, the company is much better looking from a financial point of view. VRX and its ilk have poisoned the water hole so a couple of quarters of traditional growth and a cleaned up balance sheet will take away prying eyes who are now looking negatively on the financials of companies like AGN. It seems like BS and Mgmt are committed to shareholder value so I think all is OK in the end.

As an equity holder I think a wait and see approach is warranted. Personally if we get to $280 I am planning on lightening up and declaring a small victory on the road to higher valuation.

P551

 

[anonymous]

I'm not sure I'm saying that, but it's clearly all about Teva right now. It appears that the acquisition model is not in favor now, for the moment. What BS needs to do is show investors that he can lead the company through this transition using classic business approaches. The new AGN never came close to integrating the legacy businesses before PFE came on the scene. BS needs to show that the company is stable and able to deliver consistent growth without the acquisition fuel. Pyott, like him or not, was steady at the helm and from an older school of thought. That older school is in session now!

I'm not good enough to predict any kind of realistic stock price moves. My gut feel is that $300+ is not in the cards near term. But AGN is a solid business. With the Teva deal closed, the company is much better looking from a financial point of view. VRX and its ilk have poisoned the water hole so a couple of quarters of traditional growth and a cleaned up balance sheet will take away prying eyes who are now looking negatively on the financials of companies like AGN. It seems like BS and Mgmt are committed to shareholder value so I think all is OK in the end.

As an equity holder I think a wait and see approach is warranted. Personally if we get to $280 I am planning on lightening up and declaring a small victory on the road to higher valuation.

P551

Excellent post. I agree that the CEO needs to focus on showing solid clean growth and no disruptions of Teva closing--this alone will show confidence in a geniune company. We are not Valeant as much as people like to compare and point fingers. There are many hard working employees that created great things and hopefully continue to do so with the support of the CEO (and hopefully more so after seeing Valeant tumble). Its hard to watch the stock tumble when so many hard working employees put so much effort into making the company.

 

[Shoham]

Looks like one of the creditors is calling a default.

"The Wall Street Journal reported earlier on Tuesday that Centerbridge Partners LP intends to call a default.

The move would start a 60-day period during which the embattled drugmaker would have to file its annual report or potentially be forced to repay the bonds early, the WSJ reported. (http://on.wsj.com/1TPIVpH)"


On seeking alpha all the comments are treating this as a nonevent as it gives VRX 60 days to file annual report.

So, what does this mean?

Remember, how with the PFE-AGN merger story, we had a lot of news coming out regularly, but actually no news: The exact same one issue that was immediately identified on the first day -- that the value creation of the merger was too weak and entirely dependent on the fragile inversion play -- was also the one relevant issue on the last day? All the tea leafs reading, the stock price fluctuations, and all the opinions, and gauging the CEOs and the Arbs and what this article said and what that metric read; all changed nothing. If there was ever a significant value creation articulation that exceeded just inversion, releasing it would have addressed this one issue and the merger would have consummated. But, we now know for sure, there was none.

There is a very similar situation here with Valeant. The exact same issue that was identified here in October -- how can Valeant get PWC to sign an audited statement that won't break the company -- is still the issue today. VRX was in the mid $100's then, about $30 now, with a lot of news in the interim; but, actually, no news. We still don't have an audited annual report, just ever-shifting commitments and target dates. Ad Hoc committe said this, CEO in hospital, CEO out of hospital, CEO fired, ex-CFO in the dog house, Ackman in the throne room, Senate said that, new CEO may be found, secured lender agreed to that, yada yada yada -- none of those stories addresses the same issue we had for 6 months. 17 days from now (April 29), the music will stop (maybe they'll find a few more short-lived extensions). On that day, lack of audited report will be no different than an unclean one. Valeant can promise all they want that they will have a report on that day, but promises to perform are meaningful only when the penalty for breaking the promise exceeds the penalty for failing to perform in any event. (A guy promising a potential blind date that she will have a good time is not saying anything meaningful; if she doesn't, there will be no second date in any event. Therefore, it's a promise that guys will freely make, and their dates will just as freely disregard).

As for the notice of default: If Valeant (somehow) gets a clean audited financials filed by April 29, then the Seeking Alpha comments are indeed correct: The notice is a non-event. Actually, a lot (not all) of other bad things that happened since October will also become non-events. I skeptically waited for AGN-PFE to publicize an articulation of the (non-inversion) value creation of the prospective merger, and was not exactly surprised when none came. I am even more skeptically awaiting a clean audited financial statement to come out of Valeant by April 29th.

Dan.

 

[Shoham]

I'm not sure I'm saying that, but it's clearly all about Teva right now. [...]

P551

I previously said that Teva is a done deal (at least with respect to FTC approval), and I'm not backtracking on that. But, ever since the PFE deal broke, I am getting paranoid about Teva.

There are two pillars to my paranoia:

1. We (Allergan) need this deal to close a lot more than Teva does. For Teva, it's a transformative change that will bring the company into a whole new class (I think it will become the largest Israeli company in history and the first Israeli company to become a top-line multinational). It will open opportunities for Teva that they currently do not have, open new countries (some of which are very tough for an Israeli company to open on its own), achieve market power, further strengthen the brand, improve economies of scale, and so on. As important and as lucrative as those upsides are, if the deal fails, Teva is not in trouble. There will be other opportunities, if not this year, then another time. Allergan, on the other hand, is somewhat desperate to clear the debt off it's books. It's not just that Saunders would love to use "balance book flexibility" to make more deals (acquisitions, presumably); but also that now, in the post-Valeant implosion era, a mid-10-figure debt is getting to be uncool. We are not desperate for this deal, but it's failure would definitely cause us a lot of anxieties (and when shareholders are anxious, share price drops). When one side wants a deal a lot more than the other, it creates all sort of leverages. If Teva, which undoubtedly understands this dynamics, starts making demands; those demands will be backed up by their willingness to walk. If we cave, we lose the value of whatever they demanded; if we don't, they may reach a point where they will feel compelled to validate their threat. In either case, the deal is facing a risk. (And for us to say "a deal is a deal" won't cut it, if the power situation is disadvantageous; they'll find a way to credibly threaten the deal).

2. When the deal was announced (July 27, 2015), the Pharma sector stocks were at a historical high (we were over $300 -- even without the PFE deal). The transaction price, therefore, in some way reflected this. If our Enterprise Value was about $160B ($120B market cap + $40B debt), and the portfolio being sold was about a quarter of the company (by whatever yard stick was used to measure valuation), then a price tag of $40B surmises. However, now, with the sector, to include us, about 25% down (or something like that); the $40B number may seem pricy. If you signed a contract to buy a house and before the closing date, real estate prices crashed and the value of houses in general is down 25%, will you walk away (and maybe lose a small deposit, but a lot less than 25%)? Find an excuse to bail? Demand all sort of concessions from the seller? Or will you knowingly complete a transaction buying a house for more than it is now worth? (and will your lenders let you?) Whichever it is, the deal is at risk.

Paranoia notwithstanding, my overall feeling is that Teva will suffice itself with no more than modest concessions and, on the whole, keep the deal (particularly if there are future issues with regulators or other unexpected costs -- they'll expect Allergan to bear the brunt of the cost to fix those issues). The opportunities it opens to them and the reputation benefits of honoring a deal under such circumstances, in my opinion, will outweigh any short-term benefits that shafting Allergan may provide.

Dan.

 

[anonymous]

I previously said that Teva is a done deal (at least with respect to FTC approval), and I'm not backtracking on that. But, ever since the PFE deal broke, I am getting paranoid about Teva.

There are two pillars to my paranoia:

1. We (Allergan) need this deal to close a lot more than Teva does. For Teva, it's a transformative change that will bring the company into a whole new class (I think it will become the largest Israeli company in history and the first Israeli company to become a top-line multinational). It will open opportunities for Teva that they currently do not have, open new countries (some of which are very tough for an Israeli company to open on its own), achieve market power, further strengthen the brand, improve economies of scale, and so on. As important and as lucrative as those upsides are, if the deal fails, Teva is not in trouble. There will be other opportunities, if not this year, then another time. Allergan, on the other hand, is somewhat desperate to clear the debt off it's books. It's not just that Saunders would love to use "balance book flexibility" to make more deals (acquisitions, presumably); but also that now, in the post-Valeant implosion era, a mid-10-figure debt is getting to be uncool. We are not desperate for this deal, but it's failure would definitely cause us a lot of anxieties (and when shareholders are anxious, share price drops). When one side wants a deal a lot more than the other, it creates all sort of leverages. If Teva, which undoubtedly understands this dynamics, starts making demands; those demands will be backed up by their willingness to walk. If we cave, we lose the value of whatever they demanded; if we don't, they may reach a point where they will feel compelled to validate their threat. In either case, the deal is facing a risk. (And for us to say "a deal is a deal" won't cut it, if the power situation is disadvantageous; they'll find a way to credibly threaten the deal).

2. When the deal was announced (July 27, 2015), the Pharma sector stocks were at a historical high (we were over $300 -- even without the PFE deal). The transaction price, therefore, in some way reflected this. If our Enterprise Value was about $160B ($120B market cap + $40B debt), and the portfolio being sold was about a quarter of the company (by whatever yard stick was used to measure valuation), then a price tag of $40B surmises. However, now, with the sector, to include us, about 25% down (or something like that); the $40B number may seem pricy. If you signed a contract to buy a house and before the closing date, real estate prices crashed and the value of houses in general is down 25%, will you walk away (and maybe lose a small deposit, but a lot less than 25%)? Find an excuse to bail? Demand all sort of concessions from the seller? Or will you knowingly complete a transaction buying a house for more than it is now worth? (and will your lenders let you?) Whichever it is, the deal is at risk.

Paranoia notwithstanding, my overall feeling is that Teva will suffice itself with no more than modest concessions and, on the whole, keep the deal (particularly if there are future issues with regulators or other unexpected costs -- they'll expect Allergan to bear the brunt of the cost to fix those issues). The opportunities it opens to them and the reputation benefits of honoring a deal under such circumstances, in my opinion, will outweigh any short-term benefits that shafting Allergan may provide.

Dan.

Dan-

From snippets I have seen lately, it sounded more of potential government blocking of this deal after the failed AGN/PFE deal due to the nature of the generic business and drug price issues.

Any thoughts on that?

 

[anonymous]

I previously said that Teva is a done deal (at least with respect to FTC approval), and I'm not backtracking on that. But, ever since the PFE deal broke, I am getting paranoid about Teva.

There are two pillars to my paranoia:

1. We (Allergan) need this deal to close a lot more than Teva does. For Teva, it's a transformative change that will bring the company into a whole new class (I think it will become the largest Israeli company in history and the first Israeli company to become a top-line multinational). It will open opportunities for Teva that they currently do not have, open new countries (some of which are very tough for an Israeli company to open on its own), achieve market power, further strengthen the brand, improve economies of scale, and so on. As important and as lucrative as those upsides are, if the deal fails, Teva is not in trouble. There will be other opportunities, if not this year, then another time. Allergan, on the other hand, is somewhat desperate to clear the debt off it's books. It's not just that Saunders would love to use "balance book flexibility" to make more deals (acquisitions, presumably); but also that now, in the post-Valeant implosion era, a mid-10-figure debt is getting to be uncool. We are not desperate for this deal, but it's failure would definitely cause us a lot of anxieties (and when shareholders are anxious, share price drops). When one side wants a deal a lot more than the other, it creates all sort of leverages. If Teva, which undoubtedly understands this dynamics, starts making demands; those demands will be backed up by their willingness to walk. If we cave, we lose the value of whatever they demanded; if we don't, they may reach a point where they will feel compelled to validate their threat. In either case, the deal is facing a risk. (And for us to say "a deal is a deal" won't cut it, if the power situation is disadvantageous; they'll find a way to credibly threaten the deal).

2. When the deal was announced (July 27, 2015), the Pharma sector stocks were at a historical high (we were over $300 -- even without the PFE deal). The transaction price, therefore, in some way reflected this. If our Enterprise Value was about $160B ($120B market cap + $40B debt), and the portfolio being sold was about a quarter of the company (by whatever yard stick was used to measure valuation), then a price tag of $40B surmises. However, now, with the sector, to include us, about 25% down (or something like that); the $40B number may seem pricy. If you signed a contract to buy a house and before the closing date, real estate prices crashed and the value of houses in general is down 25%, will you walk away (and maybe lose a small deposit, but a lot less than 25%)? Find an excuse to bail? Demand all sort of concessions from the seller? Or will you knowingly complete a transaction buying a house for more than it is now worth? (and will your lenders let you?) Whichever it is, the deal is at risk.

Paranoia notwithstanding, my overall feeling is that Teva will suffice itself with no more than modest concessions and, on the whole, keep the deal (particularly if there are future issues with regulators or other unexpected costs -- they'll expect Allergan to bear the brunt of the cost to fix those issues). The opportunities it opens to them and the reputation benefits of honoring a deal under such circumstances, in my opinion, will outweigh any short-term benefits that shafting Allergan may provide.

Dan.

With Teva being so important Allergan ceo needs to get a better handle on steering our shareholders with trust and confidence--he needs to get out there and vocally distinguish a positive plan of this company. Too many people are shorting and criticizing this company. A company needs strong PR.

 

[anonymous]

With Teva being so important Allergan ceo needs to get a better handle on steering our shareholders with trust and confidence--he needs to get out there and vocally distinguish a positive plan of this company. Too many people are shorting and criticizing this company. A company needs strong PR.

I agree 100%! Hasn't been enough of this at all!

 

[anonymous]

Dan, I find your posts informative. Just curious what do you do for a living ? I notice you spend countless hours on the Cafe and your not getting paid. How do you have so much free time ? Thanks Keep up the good work !

 

[anonymous]

Dan, I find your posts informative. Just curious what do you do for a living ? I notice you spend countless hours on the Cafe and your not getting paid. How do you have so much free time ? Thanks Keep up the good work !

I Call TROLL!! He already told us, is very open and clearly anyone with real interest can see he lives on the west coast and posts at night. Defending Dan, I am a fan!!

 

[anonymous]

I Call TROLL!! He already told us, is very open and clearly anyone with real interest can see he lives on the west coast and posts at night. Defending Dan, I am a fan!!

Ditto-troll

 

[anonymous]

I previously said that Teva is a done deal (at least with respect to FTC approval), and I'm not backtracking on that. But, ever since the PFE deal broke, I am getting paranoid about Teva.

There are two pillars to my paranoia:

1. We (Allergan) need this deal to close a lot more than Teva does. For Teva, it's a transformative change that will bring the company into a whole new class (I think it will become the largest Israeli company in history and the first Israeli company to become a top-line multinational). It will open opportunities for Teva that they currently do not have, open new countries (some of which are very tough for an Israeli company to open on its own), achieve market power, further strengthen the brand, improve economies of scale, and so on. As important and as lucrative as those upsides are, if the deal fails, Teva is not in trouble. There will be other opportunities, if not this year, then another time. Allergan, on the other hand, is somewhat desperate to clear the debt off it's books. It's not just that Saunders would love to use "balance book flexibility" to make more deals (acquisitions, presumably); but also that now, in the post-Valeant implosion era, a mid-10-figure debt is getting to be uncool. We are not desperate for this deal, but it's failure would definitely cause us a lot of anxieties (and when shareholders are anxious, share price drops). When one side wants a deal a lot more than the other, it creates all sort of leverages. If Teva, which undoubtedly understands this dynamics, starts making demands; those demands will be backed up by their willingness to walk. If we cave, we lose the value of whatever they demanded; if we don't, they may reach a point where they will feel compelled to validate their threat. In either case, the deal is facing a risk. (And for us to say "a deal is a deal" won't cut it, if the power situation is disadvantageous; they'll find a way to credibly threaten the deal).

2. When the deal was announced (July 27, 2015), the Pharma sector stocks were at a historical high (we were over $300 -- even without the PFE deal). The transaction price, therefore, in some way reflected this. If our Enterprise Value was about $160B ($120B market cap + $40B debt), and the portfolio being sold was about a quarter of the company (by whatever yard stick was used to measure valuation), then a price tag of $40B surmises. However, now, with the sector, to include us, about 25% down (or something like that); the $40B number may seem pricy. If you signed a contract to buy a house and before the closing date, real estate prices crashed and the value of houses in general is down 25%, will you walk away (and maybe lose a small deposit, but a lot less than 25%)? Find an excuse to bail? Demand all sort of concessions from the seller? Or will you knowingly complete a transaction buying a house for more than it is now worth? (and will your lenders let you?) Whichever it is, the deal is at risk.

Paranoia notwithstanding, my overall feeling is that Teva will suffice itself with no more than modest concessions and, on the whole, keep the deal (particularly if there are future issues with regulators or other unexpected costs -- they'll expect Allergan to bear the brunt of the cost to fix those issues). The opportunities it opens to them and the reputation benefits of honoring a deal under such circumstances, in my opinion, will outweigh any short-term benefits that shafting Allergan may provide.

Dan.

Just read a few articles emphasizing how important Teva closing is as well. Spot on!

 

[anonymous]

Dan-

From snippets I have seen lately, it sounded more of potential government blocking of this deal after the failed AGN/PFE deal due to the nature of the generic business and drug price issues.

Any thoughts on that?

Not Dan, but I would think that the government was more incentivized to block this deal as a back-door way to stop the Pfizer transaction. With the Pfizer deal off the table, I don't think the competitive issues are material enough to stop the Teva deal from going through, with the one caveat being that it seems increasingly difficult to get large transactions approved and that the rules we thought were in play (based on past history) may be changing.

 

[Shoham]

ONE THOUSAND POSTS!

WOW!

When I started the thread, I wasn't planning on ever going beyond one post. The only reason I posted the first "Glossary" entry, rather than just send it by email to the handful of individuals it was intended for, was to avoid having anything awkward in their company email account (particularly if the company was going to end up a part of Valeant).

Allow me to again show my great appreciation to the community that has formed around this thread and whose continuing interest and participation makes it a worthy phenomena!

Thanks everyone!

Dan.

 

[P551]

Our poor AGN stock seems to be wrapped in kryptonite.

We need some sort of reassuring news to come out. It's a long way until earnings get announced and I'm concerned we will keep dropping unless there is something from BS. He owes it to investors to announce a pre-earnings preview, maybe as part of some other interview he might schedule.

Help Mgmt help!

P551

 

[anonymous]

Our poor AGN stock seems to be wrapped in kryptonite.

We need some sort of reassuring news to come out. It's a long way until earnings get announced and I'm concerned we will keep dropping unless there is something from BS. He owes it to investors to announce a pre-earnings preview, maybe as part of some other interview he might schedule.

Help Mgmt help!

P551

What Allergan really needs is... Pyott. That would change things very quick in terms of share value. Saunders needs this next earnings to be more than strong--a strong voice is needed too.

 

[P551]

Remember, how with the PFE-AGN merger story, we had a lot of news coming out regularly, but actually no news: The exact same one issue that was immediately identified on the first day -- that the value creation of the merger was too weak and entirely dependent on the fragile inversion play -- was also the one relevant issue on the last day? All the tea leafs reading, the stock price fluctuations, and all the opinions, and gauging the CEOs and the Arbs and what this article said and what that metric read; all changed nothing. If there was ever a significant value creation articulation that exceeded just inversion, releasing it would have addressed this one issue and the merger would have consummated. But, we now know for sure, there was none.

There is a very similar situation here with Valeant. The exact same issue that was identified here in October -- how can Valeant get PWC to sign an audited statement that won't break the company -- is still the issue today. VRX was in the mid $100's then, about $30 now, with a lot of news in the interim; but, actually, no news. We still don't have an audited annual report, just ever-shifting commitments and target dates. Ad Hoc committe said this, CEO in hospital, CEO out of hospital, CEO fired, ex-CFO in the dog house, Ackman in the throne room, Senate said that, new CEO may be found, secured lender agreed to that, yada yada yada -- none of those stories addresses the same issue we had for 6 months. 17 days from now (April 29), the music will stop (maybe they'll find a few more short-lived extensions). On that day, lack of audited report will be no different than an unclean one. Valeant can promise all they want that they will have a report on that day, but promises to perform are meaningful only when the penalty for breaking the promise exceeds the penalty for failing to perform in any event. (A guy promising a potential blind date that she will have a good time is not saying anything meaningful; if she doesn't, there will be no second date in any event. Therefore, it's a promise that guys will freely make, and their dates will just as freely disregard).

As for the notice of default: If Valeant (somehow) gets a clean audited financials filed by April 29, then the Seeking Alpha comments are indeed correct: The notice is a non-event. Actually, a lot (not all) of other bad things that happened since October will also become non-events. I skeptically waited for AGN-PFE to publicize an articulation of the (non-inversion) value creation of the prospective merger, and was not exactly surprised when none came. I am even more skeptically awaiting a clean audited financial statement to come out of Valeant by April 29th.

Dan.

VRX now talking to investment banks...something is going to happen now. Liquidation sale I suspect. Possibly a last ditch to avoid bankruptcy?

Stay tuned. Something to distract us from our AGN decline.

P551

 

[anonymous]

ONE THOUSAND POSTS!

WOW!

When I started the thread, I wasn't planning on ever going beyond one post. The only reason I posted the first "Glossary" entry, rather than just send it by email to the handful of individuals it was intended for, was to avoid having anything awkward in their company email account (particularly if the company was going to end up a part of Valeant).

Allow me to again show my great appreciation to the community that has formed around this thread and whose continuing interest and participation makes it a worthy phenomena!

Thanks everyone!

Dan.

Dan,

Legacy AGN field sales rep here:
THANK YOU for your posts. Not only have you kept me (and probably countless others) well-informed, but grounded through the last 2 years.

Can you believe it's been 2 years?!

You have taught me so much through this thread. Keep up the great work.