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Shire plc Message Board

  • ranjit.jaques ranjit.jaques Jul 14, 2014 10:10 AM Flag

    price action

    if the deal goes through, when would it reflect in the price?

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    • So right now the discount seems to be 6.4%, which seems to be to be about 1.5 to 2% too much.
      So I think there is 1.5% to 2% to be picked up off the table by buying at the present price and selling in a week or two.
      This Friday, July 18th is a target date by which I think the deal has to be accepted or ABBV has to desist for 6 months.

    • Usually arbitrageurs short the acquirer (ABBV) which would lower ABBV's price and lower the value of the deal since a good portion of the deal depends on ABBV's price.
      So maybe a 3-4% discount until regulators give approval--at least in the U.S. you have to get past any monopoly concerns and maybe concerns about avoiding taxes, but that probably does not apply here since there are no monopoly concerns and I don't think the British have as much groundswell of concern over companies doing tax inversions like what would happen here.
      In maybe 2 or 3 months? after British approval (and maybe Irish approval-I don't know) the discount should narrow further to , I guess, a couple of percent-just in case the deal falls apart.
      Also, if the British pound continues to weaken versus the dollar that would lower the takeover price because the cash portion of the deal is in GB pounds.

      • 3 Replies to rayonman11
      • So 3 months until we see returns? When would the swap occur. I would think shortly after announcement

      • "at least in the U.S. you have to get past any monopoly concerns and maybe concerns about avoiding taxes, but that probably does not apply here since there are no monopoly concerns and I don't think the British have as much groundswell of concern over companies doing tax inversions like what would happen here."
        Sorry, I thought ABBV was a British company but I see from the latest Reuters story they are in Illinois in the U.S. So the factor of hostility to companies avoiding U.S. taxes by these tax inversion deals IS a factor here.
        Still, the deal should go through since ABBV has no doubt taken this into consideration and does not view it as a deal breaker and I don't think regulators can stop the deal on the grounds ABBV is trying to avoid U.S. taxes.

      • Your saying even if they announce the deal has been accepted and is for say 272 a shr. The price will stay in the 250/260 range due to the price of the buyer and the deal falling through. How c ome every other buyout i see the stock goes to the buyout price with in cents to maybe 1 buck? makes zero sense. I can see waiting till a deal is announced but thats just stupid.. Company will get full value reguardless of the buyers stock price. . If this is going to stay here for whatever reason even though the deal is for 270+ than i say no deal and i am sure the company will as well. Price needs to reflect deal when announced this is absurd

 
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