I disagree. RVP clearly has the upper hand right now. Regardless of the eventual outcome, the jury found that BDX committed an anti-trust violation and violated the Lanham Act. If BDX is right and the verdict was not justified, the best they could hope for is a Court of Appeals ruling that the case should be re-tried. In the meantime, BDX has to disclose the verdict on its SEC filings and may be prejudiced if they intend to bid on gov't contracts. The verdict hits below the belt.
I speculate that BDX is more willing to settle then is Shaw. Shaw has a thorn up his #$%$ when it comes to BDX and I have always been concerned that he will not be satisfied with just a grand slam. He also wants to pitch a no hitter in the same game. RVP's shareholders have no say and we can't count on Shaw handling this situation in a rationale way. That is where his attorneys and family come into play. They have to convince him to walk away now a winner and use the globs on money he will get to start another business where he can again play the role as "King".
I #$%$ume you made good money on this play. I am betting that there is still decent money on the table and I will continue to closely monitor this situation. I believe that if the Judge is forced to rule, he will uphold the verdict and grant attorney's fees and pre-judgment interest. Even pending the outcome of an appeal, a $400m verdict should result in the stock being priced in excess of $5.
I thought yesterday was supposed to be the final.
It turned out:
- judge was not dismissive to BD's argument for JMOL
- BD feel like they have a chance of verdict overturn
-Shaw might be blinded by greed and "ego" personality
-judge not wanting to "prodding" for lack of clear evidence and hate to write lengthy legal opinions
It's a vicious circle.
It seems to me there's no clear winner so far and BD's willing to drag this for ever.
I have never seen a clearer case to settle, or to agree to an acquisition by BDX. In either event, the number should be about $250-300M. Here are some considerations:
1. BDX is looking at a downside risk of $400 million, in addition to a reputational problem and a potential injunction against such competitive behavior in the future. In addition, to its own legal fees as well as the opportunity cost of time and energy.
2. In the hands of BDX and its distribution prowess, RVP's product would offer great synergy.
3. In the event of a buy out, the amount that Shaw is getting for the patent would be passed along to BDX, and this would bolster the bottom line. I calculate this to be approximately $30-40 million in enterprise value for BDX.
4. BDX has already taken a $340 million write down, and as a result, this acquisition/settlement would bolster the bottom line for this quarter.
5. If no settlement is reached, RVP's competitive position will deteriorate with the advent of time.
6. Although unlikely, the potential of a worst case scenario for RVP in the appeal court, should encourage Shaw to take as much as possible now. Even if it's a 10% chance, Shaw stands to lose everything, as opposed to potentially walking away with $50-100M now.
As such, if I were RVP's and/or BDX's lawyer, I would be pounding on the table that this deal needs to happen right now for $250-300M.