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Biotech / Medical : Biotechnology Value Fund, L.P. -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (737)	6/22/1999 10:07:00 AM
From: aknahow	Read Replies (1) \| Respond to of 4974

DAK, are you proposing that a party as mentioned in RMac post would buy up a position at a higher level and then try to merge at a lower level? Just don't understand your point??? I know in the past I have been amazed at how many people don't understand one is kidding when one does not add a <g> For now I just have to assume that you have beaten me at my own game and I don't want to continue to fall for it any more. Congratulations, you really had me. <<<<<<< If you're talking about the aquirer buying stock at lower levels [as your post suggests] and then merging at a higher level, I have never seen this....>>>>>> DAC yeah, your right why would a buyer accumulate stock at a low level and then offer a higher amount for the rest of the company? Just makes no sense. <g>

To: LLCF who wrote (737)	6/22/1999 11:30:00 AM
From: RCMac	Read Replies (1) \| Respond to of 4974

DAK, George, I'm not sure I fully understand the dispute, or why the tone has gotten unnecessarily a tiny bit testy between you two very useful contributors to SI biotech threads, but not having a full grasp doesn't always stop me from chiming in -- I was trained as a lawyer, after all -- so let me speak on the point. >>However even in friendly mergers a position is usually accumulated before the partner says yes.<< George, I think this is pretty rare, as I gather DAK does. In my term (15 years) as mostly a securities and financial services lawyer with a large NY law firm, I occasionally represented acquirers, targets, and various other players in the merger and acquisition dance, and paid close attention to how that game was played by other participants in the game. It was pretty rare (actually I don't remember an example, although there may have been some) for a party that wanted a genuinely friendly takeover to buy more than a token amount of the other party's stock. The main reason was that the "target's" principals would usually be offended by such purchases, since the purchases looked like a hostile act, a prelude to a hostile tender offer if the "friendly" approach were rebuffed. This is quite apart from "insider trading" 10b-5 or other legal issues -- the targets were offended by entirely legal purchases. Of course, sometimes the potential offeror wanted to apply this sort of pressure, in a "bear hug" approach, but it usually would poison negotiations toward a truly "friendly" offer. And in one instance I recall, where we represented one entity that shopped for and bought out a number of companies, even the purchase of a token amount offended a series of potential targets (these were all low tech pre-"new economy" companies - grocery chains, manufactures of tile, tools, plumbing supplies, etc. -- I'm describing events of the early and mid-1980's). I was a little surprised by these sensitivities, but they were real, and led most potential friendly acquirers to be very cautious. I would bet that these sensitivities are there, although in somewhat different form, where the scientific and IP component of the target's value is a greater proportion of total value. Hope this is helpful. --Bob