Amarin Corp Plc (AMRN)

[hamkypamky]

Use of capital … familiarize yourselves with this
A deal with EU rights to NVS brings that return to us shareholders forward

This scenario doesn't even make sense.

1. Why would NVS make a deal for AMRN for $6 for EU alone when they can likely buy the company outright for $8?
2. You said "use of capital", yeah, NVS shareholders care about use of capital as well.
Company "theoretical valuation" (Whalatane version) = $9 ($6 + $3).
Company market valuation = $3.30
NVS "theoretical EU valuation" = $6.

Hence it would make more sense for NVS to put in a bid for $7-$8 and nab the company whole rather than a partnership for nearly that amount for EU alone with no real guarantees, no pipeline, nothing.
What do you think NVS CEO is gonna tell his shareholders "Yea I KNOW the marketprice of this co is $3.30 but i'm gonna give em double that just for a partnership for 1 continent cos I like those guys, y'know?"

He'll be sacked faster that he can blink. At least if he bought AMRN entirely for $7-8 he can sell the dream to the shareholders like - unlocking US, pipeline combo, etc. He wouldn't look like he just got robbed, even if the deal is "pricey".


Then you have AMRN shareholder standpoint.

NVS partnership theoretically valuing EU at $6 alone?
Why the heck wouldn't they go to AZN and say, "we'll sell you the whole shebang for $9 with a $3 CVR?"

No, a partnership for > market valuation is a stupid, lose-lose proposition.

On one hand it makes the acquirer look stupid and their share price will probably take a massive hit with the analysts saying "X Overpaid!"

On the other hand the seller also is probably wondering, how much more can I probably get if I shop around? And why not sell the whole damn company rather than having odds and ends to try and squeeze a few bucks out of?

No chance of partnership unless we're talking like $3 or below.