But an outright acquisition - at least at the approximate $86 per share price your example below implies - is not in the cards. It's simply not enough - even with the prospective stock appreciation you describe - as then a huge portion of the true and future value of Bavi and its progeny would ultimately go elsewhere.
MD, if Bavi is the cornerstone molecule GILD is looking for
then $20 billion may indeed be the initial cash offer, but no way Garnick, SK, ES et. al. will settle for that. They want a piece of the action in the future. How does that happen then? GILD offers PPHM cash AND stock.
What if GILD said, "OK, we offer $20 Billion for US rights AND 1 share GILD for 5 shares PPHM to your stockholders."
This is a more plausible way to get to the high numbers bandied about from time to time on the Board.
****EXAMPLE: Joe Six-Pack IHUB Member has been averaging down for the past 2 years and now has 65,000 shares accumulated.
CEO John Martin of GILD gets aggressive and makes the above offer.
How does Joe Six-Pack do? Well, he does quite well with the initial offer, but he'll do even better if he sticks with GILD.
The $20 billion cash gives Joe about $20B/300M shares (shares outstanding will increase in the future, hey, that's Biotech, out of the kitchen if you can't take it), which = $66/share, which gives Joe $4.3M for his Biblical patience. Sounds fine, but ah, we're just beginning.
Joe's 65K shares will entitle him to 65K/5 = 13,000 GILD shares, which X closing price today $102/share gives him another 1.32M
So I would suggest you try remodeling the deal as the purchase of a 50% partnership interest in the worldwide rights - for a price in the 15 to 20 billion dollar range {which would then of course value PPHM at twice the negotiated number} - and placing the stock and cash portions on at least an equal footing - while also granting GILD an option to purchase the rest in say - seven years - at then fair market value.
If something like the above came to fruition - then I believe we'd finally have a deal that the board and all us long suffering old Joe Six-Packs would be quite pleased to accept.
Of course the punditry out there would TOTALLY FREAK OUT when the deal was announced - and say John Martin and the GILD board have totally lost their minds. But hopefully a few would remember the deal GILD struck in 2011 - paying 12 billion for a phase II drug - and for just one indication - and in a crowded field at that.
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