Celeryroot, I think some posters still don't understand the Farallon arbitrage position. This isn't my area, but I did look at the 13D filing on Friday and this is my take (and this is definitely out of my area). On Nov 20, 21 and Dec 4,5 Farallon shorted about 60,000 shares of LGND. They had about 1.6 million shares of ALRI and received about 1.6 million shares of LGND on Nov 24 (as a result of the ALRI call). They used those 1.6 million shares of ALRI to cover the recently shorted 60,000 shares as well as another 1.6 million shares that they had shorted previously. Since they had 1.6 million ALRI, they would have also hade 3.2 million LGNDW.
My guess is they still have the 3.2 million LGNDW and still have about a 1.6 million share short position in LGND (after covering 1.6 million), but to cover that, they would have to exercise their LGNDW, which I suspect they can do whenever they want between now and June 3, 2000. To exercise the warrants, they have to pay LGND just over $7 which coincidently is what LGND just paid them in cash as part of the ALRI call.
None of the above requires any buys or sells on the equity market. They bought most of their ALRIZ long ago and their ALRI and LGNDW positions come from the separation of the units. |
