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BioMimetic Therapeutics Inc. Message Board

  • dr.tjm42 dr.tjm42 Nov 20, 2012 12:19 AM Flag

    Problems

    What if the FDA approval comes BEFORE the closing? The conversion rate is still going to be .2482 to Wright stock so if the BMTI shares rocket, we won't get to take advantage of the pop unless you sell before the closing. But if you did, you would then lose the "milestone" $$.

    Secondly, if the approval comes before closing, what happens to the "milestone" payment of $3.50 per share? Wright is never going to include an incentive in a deal based on FDA approval after that incentive has already been reached. Doesn't make sense.

    Third, BMTI would be stupid to sell out at this price if approval goes through prior to settlement. Wright is buying the company at a big discount (class actions are already lining up) because they are speculating on approval. If BMTI is already approved, shouldn't the speculative discount go away?

    And finally, the $12+/share final mix price is great but $3 of that gets pushed back at least 2 years after the closing date, assuming they hit the $40million and $70million thresholds.

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    • If the FDA approves Augment before the deal closes (and Wright believes that is a distinct possibility) then nothing changes. Other firms would certainly be interested in acquiring BMTI, however, and could submit a superior bid. If one did, BMTI would be obligated to notify Wright and a bidding war would likely begin. If BMTI withdraws from this deal and enters a new merger agreement with another firm they need pay only a $8.2 million penalty.

      The $3.50 payment would stay in place even with approval. The CVR would then cover only the revenue milestones.

      "If BMTI is already approved, shouldn't the speculative discount go away? "
      Listen to the conference call. Wright makes clear they expected competition for BMTI if they waited for approval before bidding. The "speculative discount" would go away onlyif another company bids or Wright has trouble getting the majority of votes.

      • 2 Replies to ffmoo
      • Seems like the "outs" given to both companies are indications that:

        a) Both think there will be a better offer coming
        b) Approval is coming
        c) Tenn. boys band together to get best deal for both. If no suitor surfaces, then Wright wins, and BMTI is okay. If suitor surfaces, both win. BMTI expects a new suitor, if you ask me.

        This move was made to get the other party to move.

        Can't find CC. Wright expected a suitor?

      • "The $3.50 payment would stay in place even with approval."

        So who is going to pay out the $3.50/share in cash upon FDA approval if there is no deal in place? Nobody owns the company so XYZ company isn't going to pay it. And BMTI isn't going to pay $3.50/share to their own shareholders upon approval. ????

 

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