ABT does not want trouble. If ALR cannot file the quarterly report for past two quarters then there may be something seriously wrong with ALR.
Since ALR has not stepped forward with its true financial then ABT has right to terminate the acquisition. May be ABT offer ALR some money to motivate the company.
Another choice is that ABT reduces the acquisition purchase price. ALR shareholders may not like it but the reduced price is better than significantly reduced price when ALR is left alone.
ABT can buy ALR shares now that are traded at discount price too.
First, if ALR has a good assets then their shares can bought at a discount and the deal will be done eventually. In case ALR problems are hard to solve then ABT can reject the deal.
Either way, ABT has advantages and it should not be punished for something that it tirns out in its favor.
Sentiment: Strong Buy
ABT is also buying STJ. STJ is getting approval for leadless pacemaker here in US while it is selling it in Europe.
I think, ABT investors can gain at least 20% by the end of this year without being worry about the market.
I say, uncertainty. Investors don't want that. ALR created some uncertainty and print media is steering STJ acquisition. All above will be solved by time. So, give ABT a few months and it will be on its right course again.
This is the best deal that ABT could make at the right time.
STJ has $677m cash, makes about $1B in next 3 quarters, has $1.5B in receivable, $900m inventory while payable is around $700m. So, there is over $3B of cash to grab when the deal is closed.
After all, with all above, ABT needs about $18B to close the deal. Two years from now, STJ assets will worth $50B.
This is ABT style. It goes down several days in a row and then it reverse itself and go up several days in a row.
Probably, tomorrow's CC will push it up.
With RKUS acquisition, he may be planning for a different price.
Those estimates are a little bit high but still not bad for a company is growing at a good rate.
Acquisition by BRCD was a good move because they are getting a company that have been growing and increasing revenue in past 5 years.
In regard the purchase, total RKUS diluted shares stands at 96m shares (87m basic).
BRCD pays $6.45 per share of cash or $619m and also pays .75 share for each RKUS share which will be 72m shares. The numbers are based on current info in the 10k.
Yahoo is showing that RKUS has $230m cash and almost zero debt.
So, the total cost will be around $400m cash and 72m shares. With 1.4B cash on hand and making over $400m in a year, BRCD will be in a good position since it can buyback its shares under $10 very aggressively while growing its business with current purchase.
Ned Davis Research Group upgrades BROCADE COMMUNICATIONS SYSTEMS INC from NEUTRAL to BUY.
BY Investars Analyst Actions - private
— 9:04 AM ET 04/18/2016
On April 18, 2016 Ned Davis Research Group upgraded BROCADE COMMUNICATIONS SYSTEMS INC ( BRCD ) from NEUTRAL to BUY.
Don't be so sure for what you are wishing for.
The deal is a good one and opens a lot opportunity for BRCD .
BRCD pays about $700m cash and about 75m shares.
It gains RKUS cash position which is about $300m. So, BRCD pays only $400m cash.
Currently, BRCD has $1.4 B cash and $800m debt. Provided that BRCD adds $100m cash every quarter, by the time the deal is done, BRCD ends up with $1.2B cash and the same debt, 75m more shares and access to RKUS revenue and income. RKUS has excellent wireless technology and this is the area that will get a lot of growth.
In summery, BRCD owns RKUS, increase its revenue by about $450m to $500m per year and increase its income by about $60m but most importantly, growth potential and cost saving.
A year after purchase, most of the shares paid for RKUS will be purchased back and BRCD cash position will be higher than current one while revenue and income will be much higher.
Eventually, BRCD will be acquired and the purchase price will be around $20 per share.