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Astex Pharmaceuticals, AŞ Message Board

  • doccf doccf Sep 6, 2013 3:24 PM Flag

    maximizing value? ceo motivation and other assumptions and math

    ceo's sweetheart deals ... it's all about the entitled money he believes he deserves ...
    this so-called deal looks to be all about mgmt & insiders and not about maximizing value for all shareholders
    1 - manuso owned all of 6400 shares as of a couple of months ago and had exercised and immediately sold approx 98k options in march and may for about a $202k pretax profit
    2 - as of june 21, manuso held over 5.42mm options presumably mostly with low strike prices, so i'm guessing he would clear at least $7 pretax profit per option, and no doubt at favorable lt cap gains rate
    3 - meanwhile, upon change of control, he reaps the $2mm payment (noted by buysell1929) AND $675k '2013 on target bonus'. so we're talking $35-$40mm instant gratification, and $1.5-$2.5mm annually looking forward
    4 - oh, he was paid $1.32mm in 2012, and the five top compensated officers were paid over $4.0mm as a group. and it sure looks like all of them keep their jobs if the deal is consumated, inasmuch as the buyer has indicated it intends for astex to be operated independently
    5 - all of the top five own more options than shares, most by a lot, so the motivation to do an m&a deal is abundantly clear in terms of accelerating compensation, various bonuses and perks for the top officers
    6 - one of the main reasons the transaction was agreed to now may well be that the dacogen royalty stream will likely start to shrink as generic competition bares its price competition fangs
    7 - finally, there's that $31mm breakup fee should astx not be acquired by otsuka, or about 3.5% of the indicated value of the deal. brean murray and others believe astex is worth a whole lot more than $900-$930mm - as do i - which is why the stock continues to trade north of the $8.50/sh offer
    8 - see my 9/4 5:07pm post for further info and observations
    9 - good weekend to all, except astx mgmt and directors