James, GILD will not make Roche's mistake
Roche (a stodgy ol' Swiss company) bought 60% of Cowboy-California Genentech for just $2.1 Billion (!!) in 1991.
This proved to be a brutal, extremely costly mistake. Genentech proved to be such an incredible superstar, that just 18 years later, Roche was forced to pay $47 Billion in 2009 for the rest of the company (!!)
NO WAY does GILD make a similar mistake with PPHM. These guys are vicious. They're salivating big time over the gazillions just sitting there with immuno-oncology; they know it represents the paradigm shift away from the "cut-poison-and-burn" cancer treatment that everybody despises (i.e. surgery/chemo/radiation). Cancer is ready to surpass HEART DISEASE as the number #1 killer. Good grief.
No, GILD or some other behemoth wants the whole bag. The entire industry is fully aware of the catastrophic error made by Swiss Roche with South San Francisco Genentech (DNA) in 1991.
I expect CASH and STOCK for ALL of PPHM. But, OK James, let's replay your numbers:
CEO John Martin of GILD says, "OK, let's move." He offers $20 Billion for 50% of worldwide rights to Bavi plus a 1:1 stock exchange. (The float for GILD is 1.44 billion shares, so he'll have to offer 300 million shares, i.e. 20% of the company). Unlikely in my estimation, but I like your optimism.
Joe Six-Pack is going to pass out when this hits his portfolio: He'll get $66 per share from the $20 Billion, = $4.3M, plus 65,000 shares of GILD for a value of $6.63M (based on today's GILD pps of $102), plus appreciation of his GILD shares (at $345 pps in 3 years), which gives him $15.79M more, PLUS the annual dividend of $1.72/share for every GILD share (as North40000 stated, likely to increase in the future)
So Joe Six-Pack is looking at $4.3M + $6.63M + $15.79M + dividends = $26.72M for an original investment of 65,000 shares of Bavi. This would clock out at Bavi today at $411/share.
Well, King did mention the word "astronomical." Whether these numbers represent that word I guess is up to everyone's personal point of view.
Regards,
Joe
