Couple of relevant news items today:
First, FASB meets to decide whether to kill pooling. The general consensus is that they will do so. Some consequences:
1. Companies might rush to get their mergers in under the wire. January 2001 has been suggested as an effective date for the proposed change.
2. Companies might decide that purchase accounting isn't so bad after all, even if they can't take an immediate write-down. I've seen several companies recently report their results two ways - one with and one without the non-cash amortization charge. Here's an example from one of my (non-biotech) holdings:
FORT LAUDERDALE, Fla., April 19 /PRNewswire/ -- Citrix Systems, Inc.
(NASDAQ:CTXS) today reported results for the first quarter ended March 31,
1999.
Net revenues for the first quarter ending March 31, 1999, were $85.0
million, representing a 72% increase compared to the same quarter of the prior
year. Net income, not including the amortization of intangible assets which
were acquired through business combinations in prior years was $28.2 million
or $0.30 per share. Net income for the first quarter of 1999, including
after-tax amortization charges of approximately $2.4 million, was $25.8
million or $0.28 per share.
The other news item is from AMGN. Here's a quote from yesterday's release:
"We've intensified our end-license business ... the opportunities out
there are greater than they used to be," Binder said. As for acquisitions,
"we are interested in a company with a good product candidate and might be
interested in a company with a sufficient scale of technology."
Speaking of AMGN, note that their stock repurchase program likely kills pooling for them, although I've seen talk recently of a loophole if the repurchase is just for the purpose of replenishing stock plans.
Peter |
