Tribute Pharmaceuticals Canada Inc. (fka TBUFF)

[gpg]

Interesting read from poster named "kuatolives" on the Tribute board at stockhouse.com.

POZN/Aralez could merge again before Q4
From the US Treasury Department:

"An inverted company is subject to potential adverse tax consequences if, after the transaction: (1) less than 25 percent of the new multinational entity’s business activity is in the home country of the new foreign parent, and (2) the shareholders of the old U.S. parent end up owning at least 60 percent of the shares of the new foreign parent. If these criteria are met for an inverted company, the tax consequences depend on the continuing ownership stake of the shareholders from the former U.S. parent. If the continuing ownership stake is 80 percent or more, the new foreign parent is treated as a U.S. corporation (despite the new corporate address), thereby nullifying the inversion for tax purposes. If the continuing ownership stake is at least 60 but less than 80 percent, U.S. tax law respects the foreign status of the new foreign parent but other potentially adverse tax consequences may follow. The current wave of inversions involves transactions in this continuing ownership range of 60 to 80 percent."

Given the new US treasury rules intended to throttle inversions, it's possible the nature of the TRX/POZN deal included the equity stake to Deerfield (resulting in an equity split of 28% to TRX, 54% to POZN and 17% to Deerfield) to keep parent sharehoulder equity under 60%. Going forward, this would put Aralez into a position to merge with yet another company of roughly 1.25B in valuation so the larger parent could 'buy into' the tax inversion and still maintain sub 60% ownership (sans any more equity buy-ins). It's not inconceivable this relatively low embarkation point could lead to a cascade of mergers with Aralez as other companies continually buy-into the Irish domicile, each deal of higher and higher valuations, but each company staying under a 60% equity stake. TRX shares today could be worth a helluva lot of money in a few years. It's also possible we could see the first such deal before Yosprala is approved by the FDA, as the value of POZN would theoretically be more after approval, therefore more expensive to buy-in. It's interesting that the new US treasury rules intended to thrwart inversions might actually create a cascade of them. glta.

Read more at http://www.stockhouse.com/companies/bullboard/tbuff/tribute-pharmaceuticals-canada-inc#YQdeuVThCOzhZpi2.99