tag:blogger.com,1999:blog-2080506270244832638.post3588781386602448358..comments2024-03-28T07:17:13.573-05:00Comments on Clark Street Value: Actelion: J&J Deal Offers a Free R&D SpinoffMDChttp://www.blogger.com/profile/10679835609782815537noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-2080506270244832638.post-50722978672159663012017-12-11T19:46:01.160-06:002017-12-11T19:46:01.160-06:00I got one "dividend payment" and then on...I got one "dividend payment" and then one merger payout. I'm guessing the dividend was the spin payment. I can look up the exact language later. Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-29345956769136282082017-12-11T19:44:15.854-06:002017-12-11T19:44:15.854-06:00Anuj, what did your broker say about the Idorsia s...Anuj, what did your broker say about the Idorsia spin?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-64321562261719559692017-12-11T14:32:36.726-06:002017-12-11T14:32:36.726-06:00Thanks for the follow up. Yeah, I just didn't...Thanks for the follow up. Yeah, I just didn't have the nerve to hold it after all the chatter around tax withholding, glad to hear it worked out more or less as planned.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-66472615959364910892017-12-08T15:14:41.245-06:002017-12-08T15:14:41.245-06:00Ah nevermind. I also received a dividend of 3.96 i...Ah nevermind. I also received a dividend of 3.96 in July. Total proceeds of 73.83 which is pretty good!!Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-45011985863677723262017-12-08T15:12:18.540-06:002017-12-08T15:12:18.540-06:00MDC - I held a single share of ALIOY through today...MDC - I held a single share of ALIOY through today to see what would happen. Today it looks like the share is gone from my account and I received only 69.87. Which essentially means I got less than just the regular cash payout and nothing for the R&D spin. I'm a bit surprised but happy I did the same as you and sold earlier.Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-2615708963194895632017-05-09T08:51:01.160-05:002017-05-09T08:51:01.160-05:00I sold the ADR today (5/9/17) -- called up Citi, t...I sold the ADR today (5/9/17) -- called up Citi, they just sounded too passive on how the ADRs will be treated for me to be comfortable. They're likely to sell the spinoff and distribute the cash, plus there's some uncertainty around tax withholding on the squeeze out, just doesn't seem worth the risk at just under $70. Will look at Idorsia once it starts trading (was still pending as far as I could tell yesterday).MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-36514139573699972412017-05-01T19:03:04.210-05:002017-05-01T19:03:04.210-05:00Any insight would be great. From speaking to Citi ...Any insight would be great. From speaking to Citi it doesn't sound as though they have tendered. I personally would be surprised if they didn't structure it properly such that all shareholders receive same tax treatment but I am no expert. <br /><br />Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-21078599581599007802017-05-01T09:39:56.323-05:002017-05-01T09:39:56.323-05:00Maybe others can chime in on the tax question? I ...Maybe others can chime in on the tax question? I don't have any insight or intelligent thoughts on whether it caused the spreading widening we saw last week.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-20589954157261466122017-04-29T01:27:55.985-05:002017-04-29T01:27:55.985-05:00http://www.investor.jnj.com/publictenderoffer.cfm
...http://www.investor.jnj.com/publictenderoffer.cfm<br /><br />Sorry. Hopefully this link works Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-41228587785861254412017-04-28T18:12:24.923-05:002017-04-28T18:12:24.923-05:00Are you worried at all about the tax consideration...Are you worried at all about the tax considerations: (page 40) file:///C:/Users/nugvader/Downloads/0652-Actelion_Ltd-Offer_Prospectus_of_Janssen_Holding_GmbH-20170216-en.pdf<br /><br />I can't figure out if the ADRs were tendered or not. I was hoping to be able to back into it based on how many shares the ADRs represent (in totality) but could not find that number.Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-14745915147749769522017-04-28T08:33:45.221-05:002017-04-28T08:33:45.221-05:00It might be because Actelion is being removed from...It might be because Actelion is being removed from the main Swiss index this week ahead of the merger. I'm not entirely sure about this, but I believe in the US, companies typically aren't removed until after the transaction occurs, so if I'm right about that being the reason for the dip this week it could be a buying opportunity.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-73849262663023589472017-04-27T13:50:07.534-05:002017-04-27T13:50:07.534-05:00The tender offer expired on April 21. Since then, ...The tender offer expired on April 21. Since then, the share price has been dropping again towards the CHF270 mark. Any idea why that happens? Buying now would represent an even bigger IRR than buying 2 months ago - if you considered holding until the cash-out + spinoff.<br /><br />By the way, the spinoff is called Idorsia Ltd.<br /><br />http://www.nasdaq.com/article/janssen-holding-acquires-9251-of-actelion-20170424-00142<br /><br />Great blog.<br />Erik SAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-6088645008545518782017-03-16T13:35:13.969-05:002017-03-16T13:35:13.969-05:00Thank you for the write up. I always enjoy reading...Thank you for the write up. I always enjoy reading all of them. Do you know if ALIOY ADRs are registered shares and whether or not they will be allowed to participate?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-84894381627823468902017-03-16T09:32:10.829-05:002017-03-16T09:32:10.829-05:00Thanks, nice write-up as well. Yes, it's not ...Thanks, nice write-up as well. Yes, it's not really "free" - it's built into the spread - but the spread to just the cash offer seemed attractive at time, let alone throwing in the small spinoff on top of it.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-28518317436839055112017-03-15T23:09:36.415-05:002017-03-15T23:09:36.415-05:00I wouldn't quite call the spinoff 'free...I wouldn't quite call the spinoff 'free' but generally agree with your thesis. The discount on the shares seems large. Here is another writeup about the deal.<br /><br />https://smginvestor.wordpress.com/2017/03/16/actelion-acquisition-post/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-83687159549046415322017-03-01T15:01:49.249-06:002017-03-01T15:01:49.249-06:00Nothing fancy, they're contributing $1B (CHF) ...Nothing fancy, they're contributing $1B (CHF) to the R&D NewCo, as an earlier commenter mentioned, JNJ effectively owns 32% of that, so it's $6.50 per full Actelion share. Plus you'd have to give some value for the IP that's be transferred along with the cash. I didn't get scientific about it.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-64947284686595754132017-03-01T14:59:16.274-06:002017-03-01T14:59:16.274-06:00I don't have an assumption, could be the way y...I don't have an assumption, could be the way you describe or maybe the ADR converts to the spin and you get paid the cash, either way you'd get the value somehow. There's a slight discount for the ADR compared to the foreign shares, probably accounts for a cancellation fee? I don't have access to the Swiss exchange through my broker, otherwise I'd probably own the foreign shares to avoid any of these questions too. But in the end, I think you get the value in the end.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-75721775999602925412017-03-01T11:01:52.615-06:002017-03-01T11:01:52.615-06:00How do you get to a $1bn valuation? How do you get to a $1bn valuation? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-33272532651879646372017-02-28T20:35:10.135-06:002017-02-28T20:35:10.135-06:00How are you assuming the ADRs will be treated? Is ...How are you assuming the ADRs will be treated? Is it possible that they are terminated and you are forced to take delivery of the foreign shares? Why not own the foreign shares?timidbidhttps://www.blogger.com/profile/11606303869402287925noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-65301797118979140442017-02-26T17:26:56.825-06:002017-02-26T17:26:56.825-06:00Good work.
Assuming it's valued at cash ($1 ...Good work. <br /><br />Assuming it's valued at cash ($1 billion), spinoff stub would be worth ~$6.50 per Actelion common since J&J technically will own 32% (fully diluted) of R&D NewCo's capitalization.<br /><br />The sound logic holds regardless. Getting the stub for free. A stub, as it were, which most institutionals won't care much for since (a) 1/30th of their Actelion position and (b) monthly performance benchmarking meaning zero patience for Clozier to develop that drug pipeline <br />Sean Feminoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-21693869400229946662017-02-26T05:11:48.766-06:002017-02-26T05:11:48.766-06:00Good catch, thanks, updated.Good catch, thanks, updated.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-85480304305834790292017-02-25T22:37:33.642-06:002017-02-25T22:37:33.642-06:00I think you have a typo in the second paragraph. J...I think you have a typo in the second paragraph. J&J is paying $280 per share, not $260. <br /><br />Thanks for the post.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-38506325025490083972017-02-25T17:06:37.977-06:002017-02-25T17:06:37.977-06:00I've also spent some time researching MACK and...I've also spent some time researching MACK and think it could be another interesting cheap look at the R&D pipeline. My main concern is they appear to have tried to sell themselves outright but couldn't find any buyers, so they're reluctantly returning to a development stage company versus at Actelion it was a condition for them to sell themselves. Position of strength versus position of weakness. Thanks for the great comment, and please let me know if you find any similar situations.MDChttps://www.blogger.com/profile/10679835609782815537noreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-73881187746465268132017-02-25T16:24:40.261-06:002017-02-25T16:24:40.261-06:00I've also started noticing and participating i...I've also started noticing and participating in some of these deals. The R&D aspects of many of these deals is often not priced in to many deals. It's sort of a twist on the Mohnish Pabrai style of investing in that we are investing in uncertain but not necessarily risky ventures (because we are buying these R&D vehicles for free or less than nothing).<br /><br />One successful deal involved buying $PIP which was owed litigation proceeds. One could have bought $PIP stock for less than the litigation amount paid out to shareholders while receiving an unknown (but substantial) value for the ex-dividend stock. <br /><br />An interesting deal but probably a little bit too speculative is $MACK. They are selling their main asset (in an asset sale) but are distributing a large amount of the proceeds to shareholders after earmarking a large amount for future R&D and debt reduction. Dividend amount could be between $1.5-1.95. In addition to owning the proforma company the company also has the option to receive milestone payments on the asset they just sold. If stock were probably in the less than $2.5 range it would be kind of interesting. Less than $2 and it would be extremely interesting. <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2080506270244832638.post-46005766236404855752017-02-25T08:02:25.281-06:002017-02-25T08:02:25.281-06:00great stuff. Will be interesting to see at what le...great stuff. Will be interesting to see at what levels the R&D NewCo will be trading.WPhttps://www.blogger.com/profile/03670904773172941402noreply@blogger.com