Pfizer backing out is a good signal of the deal being close to getting done…
The best thing that has happened in terms of buyout signaling is that Pfizer backed out (if in fact that is true at all)!
If Pfizer backed out it tells us a three things…
1. They were in it
2. There are serious bids/offers on the table
3. The bid/bids are too rich for Pfizer’s blood
If there weren’t serious offers on the table or they were low why would Pfizer back out? At the very least we know that they were in it… What it tells me is that there is a very serious offer at a far higher price than many of you or Pfizer anticipated and they walked. It wasn’t like Pfizer said, Oh Amgen offered you $120 well Pfizer will offer you $130! They had to know the bidding was going to start north of the trading price of $135ish. \
So to that end what is too high of a number, in your mind, that made Pfizer squeamish?
Wforj, unfortunately everything looks much more simple: the offer $120 was declined and PFE decided that paying much more than that is too much they bailed out. Their decision does not indicate that any other offers will be made, even though I think that AMGN going to offer slightly more than before.
Yeah I don’t see it that way at all…Pfizer knew that the starting point was going to be higher than $120 or why else would they’ve even bothered jumping in at all? I would assume that they didn’t think when TC said the $120 was ‘significantly undervalued’ they were going to convince him otherwise and get it for $130. I don’t think an 8% increase on $120 would be considered ‘accurately valued’ in TC and the board’s mind and Pfizer would have known that…the price got bid up and they balked…having been hands on for four different M&A’s it can absolutely be that simple…Let’s say Pfizer had a $140 max for a buyout and Gilead comes in at $145. Pfizer gets notice that they were outbid(but not by whom) and has a chance to counter or bow out. They bowed out...that's it. No doubt a deal gets done and the deal is for over $140. My 2 cents but this is not all that complicated or messy of a process compared to other biotech M&A's.