MNK on it's own was likely to return to 70s. With Q, as the deal comes closer to closing, I would think that at least $25-30 net dollars are being added to MNK PPS, probably more.
So I believe fair value of MNK with Q added is at least $100. That is AFTER the $30 payout is accounted for.
I realize fair value may not be reached at first. In reality, though, I think my estimate is conservative, and fair value of the new company might be $120 -130 AFTER the $30 payout.
I am no Mikey or Patentright or Maxdad - but we know that Q on it's own was worth mid-80s even with all the overhangs, and $140 fair value now (likely higher by time deal is closed.)
So take $75 -$30 from MNK. $45. Then $150 from QCOR (fair value as of this summer?). That is $200. Divide by 2 because of 2x the number of shares. About $100. Add 140 times 30%, for the PPS increase of QCOR taxed in Erin. That is $40, divided in haif to $20
So we are up to $120 PPS fair value just there for the new company. And QCOR holders also have $30 dollars. Granted, taxable, those with big amounts of shares going to be giving some of it to Uncle Sam. Big whoopsie. We are going to do well inMNK from the start, even without fair value.
some are confused so i'll offer a really simple way to look at it: MNK peaked at 73 in February. If MNK just gets back to there, qcor should be at $95 (30 + 0.897x73). So MNK was able to justify that price on their own. And we all know QCOR can justify $95 on it's own (especially after removing the cloud of #$%$ & adding in the tax benefits). Then add in growth in future and higher multiple given diversification of combined company etc. and you're effectively north of $95... almost don't need to worry about what it looks like after they combine. Do the math separately as that's how we're all wired until the close for now...
Sentiment: Strong Buy
And don't forget the value of Q increasing because if the move to Ireland. That will raise the new companies shares by 15% (1/2 the 30% Q would have experienced in gain - I say one half because the number of shares in the float will approximately double.)
Agreed. After doing some basic calculations I arose at a per share merger price of around $103. That is calculating a minimal growth rate (I believe I put it at an average of 10% for the combined entity) in earnings and no major catalysts.That is without the $30/share in cash we receive as QCOR holders. Therefore, assuming this deal goes through, come October Questcor holders are essentially getting 0.897*$103 + $30/share = $122.39.
No brainer until Q offsets MNK which means I will be buying and trading Q until it reaches 87 - 88 (or higher if MKN continues to rally). The shorts and arbitragers know this and are doing their best to suppress in order to cover as well as accumulate shares before the true offset is realized or closer to where it should be. Today MKN almost rose three dollars, yet Q only rose 17 cents. Since the percentage is "almost" share for share, should have seen a dollar or two higher in Q today. Also, Q was already approx $5 below where it should be to correctly offset at market open.
Sentiment: Strong Buy
basically yes but his math is extremely confusing and I always prided myself in math, major in college. but buying qcor today is like buying mnk at 55.91 considering Qcor pays a dividend. Great arbitrage situation.