stop is $75. Anyone know if we will see highs anytime
soon. Still cant believe the action in this stock.
Thought it would be a good defensive play. Well its not
turning out that way. Still very long on JNJ !!!!!
You are correct regading the hostile takeovers.
However, you fail to see recent and past history about JNJ
and takeovers of large organizations. JNJ stinks at
doing this. Not only does mamagement have trouble with
external takeovers, there have been problems trying to
merge two JNJ companies together! Been involved in
several and survived! The culture of JNJ is so different
from other large orgs. it can mean the difference in
success or falure. Remember the Cordis takeover. That
still has not cleared yet. Lifescan is another that
took time and was not controlled well. JNJ management
usually takes on the surface a hands off policy on the
issues. Just sets the financial goals and sits back. They
usually do not get involved in the day to day stuff. But
will jump in and make changes to cut through all the
politics when needed. JNJ management has alot on their
plate right now.
I threw out the idea of a merger largely because
as an Amgen stockholder I am unhappy about what
seems to be a thin pipeline to me. I assume however
that Amgen management thinks its pipeline is just fine
and that J&J's is uninterested in absorbing a biotech
company; though if I were a J&J shareholder I would be
unhappy with Ortho Biotech's skimpy [one?] product line.
Thus I have no real expectation of any merger, mainly
because I suspect neither management has any interest in
one. I think this is a more potent reason than any
mutual animosity, though that may in fact exist. Neither
management has told me how it felt about the other. Have
they chosen to confide in you?
I'm smiling a little at your message. No, I'm not
naive; but realistic with first-hand experience. Yes
I've heard of hostile takeovers. So has JNJ. Their
track record (see Cordis) is so successful (tongue
deeply in cheek); like flushing a billion + of our money
down the toilet.
As a management consultant,
I've seen the deepest workings of several major
coporations. I've also worked on several M&As.
100,000 foot persepctive (concerning product synergy),
AMGN and JNJ are a good match (because PRI is
useless). But will JNJ execute an M&A that would be approx.
$25 billion (friendly) and >$30 (hostile)? That's
a lot to swallow if there is an integration risk or
a repeat of the management of the Cordis hostile
It's just these Yahoo boards annoy me too
much with the cheerleading and the constant
unrealistic M&A trash.
(BTW, I'm an ex-JNJer, I have
a pretty good persepective)
You appear never to have
heard of hostile takeovers. Do you think mergers never
take place unless both managements adore each other?
You are not a bit naive, perhaps, are you? The fact
that not all mergers work out well does not mean that
there were not good and intelligent economic reasons
for them in the first place. No one doubts that
managements are concerned about their fate after a merger;
but there are stockholders who vote and boards of
directors who have a say. Management "chemistry" is not the
only factor involved, though it is facile to act as if
Intelligence and businessmen?
Sometimes not synonymous terms. Egos are more important to
track when you are at the board room level.
Just look at the hard personal feelings at the
Microsoft Anti-trust trial to answer your own question. You
said <<...act on rational bases and do what was
economically sensible>>. Can anybody say that the west
coast Billionaires Boys Club is doing that? Usually
"economically sensible" means not what is best for the firms,
but what is best for bonuses, stock options, and
points of power.
Look at the normal reason
mergers fail to consumate after announcement - who is in
charge - not lack of business synergy. Look at the
failed merger of E&Y and KPMG as an example. SmithKline
and Glaxo failed the same way.
"economically sensible" dealings at Cendant and Sunbeam - again
managing to egos and bonuses.
The pharma business
is less publically overt than the high-tech
business, but I could not find another firm that has more
animosity towards JNJ than AMGN. Well except USS (now Tyco)
towards Ethicon Endoscopic.
I agree with the Spin Doctor's evaluation. However, a hostile takeover scenario could work. The only negative to a hostile takeover is the bad taste JNJ has from the Cordis takeover....
Are you quite certain that
intelligent businessmen would never do an intelligent deal
because of "feelings," assuming that they in fact have
the feelings you attribute to them. I would have
thought that people running corporations as large as JNJ
and Amgen would act on rational bases and do what was
economically sensible. You know otherwise?????
Nice Christmas present from Ralph yesterday.
Maybe he is trying to save the 2% staff Christmas
bonuses on the 4100 people.
All kidding aside, it
always amazes me where companies like J&J and Boeing can
annouce such layoff uncertainty right around Christmas. A
Chrismas present of anxiety? Trying to be "helpful" and
prevent staff from spending? Or the simple fact that FY
end occurs so close and by announcing in December
that they can accrue expenses or tax savings in FY
Sorry, never. The two managements hate each other
over the EPO deal. One suit already completed. And it
is not over . . .
Believe me, JNJ would love
to get AMGN since their biotech research track
record is pretty poor (Go to the stockholder meeting and
ask how many discoveries PRI has had. Sales are
probably still lower than costs over the last 10
AMGN would rather sell to the devil or a white knight
first than to JNJ.