Buyout/Partnership: "reasonable premium" and who determines the price?
Note: the following I've pasted from another Topic where it's burried layers deep and won't be seen. Deserves Topic on it's own.... kg
"if they could get a reasonable premium, I think that is exactly what they should do."
The issue is, how to determine a "reasonable premium" and who is doing the determining? The value of the co right now is dirt cheap, the current SP has been driven into the ground, but to the contrary the business once fully realized is worth exceedingly far more! And then there's the long term shareholders like myself, who've contributed to this co for years at SP's well above, some above $15 Shr! None of us know what's going on under the table right now, but I think they should take any partnership that keeps this ship moving in the right direction - one that doesn't cash the Co and shareholders out on the cheap. I don't think $3/share in a buyout will cut it. If they can't get more than that they probably should continue partnering through Europe and on into Asia. If the market and patients want it bad enough and quicker than that, they can pay us a fairer price!
Yes, although I don't thoroughly understand the current 'poison pill', it does seem to prevent us from being taken over. So, unless the Co itself maneuvers us into selling out on the cheap, then at least we're safe on that front. I worry that the Co will do the opposite and out vote us with the typical 51% majority. And as you know, shareholders don't always get a vote mergers but rather the SP & terms just get announced in a 'NY minute' right after the agreement is reached behind the scenes. There would be no momentum to drive up the the SP further - deal over...
"The surge from 50 cents to almost $3 last year was not due simply to the dismissal of the Tang lawsuit." I agree with you on this. What I've tried to bring to this board is some appreciation for the history of this publically traded Co, the length of time it and it's shareholders have been around (1990). That in itself is something current SVNT management and investment comm should be paying more attn to, or more than they appear to be on this Yahoo Msg Bd.
It would be interesting to know more just what Lou Ferrari's expectations/intentions are with respect to a partnership and timeliner Vs continuing going it alone. I hope he gets open ended questions directed at him on this at the next 2/25/13 Conf Call.
Dan, lastly, I agree whole heartedly with this comment of yours (below). But again, the issue is at what fair price, who is going step up and pay that fair price, pay for the past launch blunders?
"a larger company (or one with more working capital) at the helm all the expansion studies would be running. Research into injection as a delivery method would be underway. The drug would be being sold in Europe instead of given away for free to those interested. Applications would have been made for approval in Asia. Sales would most likely be significantly higher in the US. Overhead related to this drug would be lower. Etc. etc. It just makes business sense for that to begin happening at the very least through a partnership."
premium should be determined by demand to but or sell the company. No one is in a hurry to buy. mgmt is not in a hurry to sell, but IMO they are in denial about their situation and financial prospects. From the buyer perspective, if you can buy something for $4 per share even though it's probably worth $6 or $8, don't you still just pay $4? SVNT has no way to show with any credibility what peak sales will be.
backin, your logic sounds reasonable but I'm not sure we can say that "SVNT has no way to show with any credibility what peak sales will be". They just haven't updated their forecasts yet. Maybe this Conf Call... Certainly an excellent question to be asekd on the Call. kg
You talk too much. Why don't you wait until after the earnings call and then make your point? For example, if the earnings show that there is hardly any growth in patients treated, that will justify the current share price, and a buyout at $3/sh will be a very nice premium.
I don't talk enough for those that need a fair all around price discussed in a timely manner! And there's no reason to wait until after the earnings call to discuss this! Shareholders need to be discussing fair share price now, before the call.
3 bucks sounds pretty good to you huh? What's your current cost basis? How many shares do you own? Are Long or Short? Or Options?
kg2931 (Long n Strong SVNT 20K Shrs @ $4.64 Shr since 2/11/1997)