Andrew (and ALL):
Although I apologize for even saying so, since it is bastardizing a significant thinker by applying his ideas to something this metaphysically mundane, I think Occam would endorse this type of solution. To my reading, the agreement takes a relatively large number of disparate events and resolves them in a straightforward manner; the number of events (compounds in this case) and the cross-royalties are more the source of the complexity rather than the basic principle of the resolution. The use of the lottery and the cross-royalties, which I assume are common devices, provide something of a bridge across the uncertainty inherent in this research.
On my quick reading of the press release and the Reuter's story, I am curious about the ambiguous use of "BY the fourth quarter" and the assertion that "upon the closing, Ligand will record a one-time charge related to the excess of the purchase option price over the fair value of the assets acquired." As to the former, I guess they want wiggle room given the postponements from the unfortunate January "announcement."
With respect to the "charge," to my eye, if the applicable value of LGND stock used in the deal exceeds the stated option price, a charge would be based on an esoteric (non-market) pricing of the "assets." Maybe you or someone else with a clearer understanding could comment.
It is interesting that Robinson is asking the street to take a closer look at the value of LGND stock. He (and we) would like to drive up the price as much as possible as a way to keep the cash requirement as low as possible. But by one reading, it is curious to invite a "reassessment of their valuations" if a deal is pending; such a deal would provide a fairly clear indication of the two companies' estimation of LGND's "valuation" (assuming the likelihood that it involves an equity position for the purchaser).
Nevertheless, I think we agree that the willing purchaser at $16/$16.125 must be smiling tonight. I assume we all will be smiling tomorrow!
Harrison Hickman |
