I can't believe a BP would be stupid enough to try and low ball
I offer this single sentence in an effort spare my friends the pain of my following diatribe. BPs aren't into casual dating
Advance apologies for what may seem a too lengthy response. It is in direct contrast to my footer about being brief and being seated. I am sincere so I'm good on that one.
Some time ago I posted information about an internal communication that my current employer had been acquired. Everything I provided was for public consumption but the specific segments I provided were boiled down for easy employee digestion. I provided a list of third parties that were involved in the deal. I don't have time right now to dig into old messages to name the specific firm representing my employer but each side had a independent consultant focused on 'fair price' evaluation.
In my most recent situation some could say too much was paid for my employer. What pushed a small company with apx $150 MM annual gross revenue into a $1.2B deal was the market penetration my employer has and how our products tie in with buyer. This is what I regard as the X multiplier. The CEO of the buyer has reiterated future value multiple times in employee Town Hall meetings. Btw, the buying CEO and his wife are Harvard Med School MD's. Common folk, energized, easy to talk to, children, and devoted to their health care mission. The fact that 'Alabama Shakes' is on his jogging playlist impressed me.
IPIX may shoot for the stars and BP may come in lower and the 'fair price' consultants may have already provided negotiation turf. It may result in a signing, further negotiation, or a mutual discontinuance.
No, I don't think a BP will come in with a ridiculously low offer. The unfounded comments about current share price versus actual value is little more than self stimulation with the added bonus of provocation. IPIX drugs appear to have a lot of potential but the fact that many drugs stumble during phase III will be weighed in. The fact that a term sheet was signed tells us the prospective partner/buyer is optimistic. I believe we are at the point of the prospect having assigned a project to the number crunchers involving a devil's advocate deep dive into the risks aka final due diligence.
My years in a (GITI) Global IT Infrastructure organizations has taught me that most industries are actually a small world. Underhanded game playing and ultimatums of the nature frequently mentioned are woefully ill informed observations. Always was the mantra "be careful what you leave in the sandbox".
A prospect doesn't burn a target because the ramifications can last for years. It's can be a serious faux pas. "Do not burn your platform".
I have personal friends who are in M & A (mergers and acquisitions) who tell me that for the most part it's boring. Until they lock onto something that fits and the deciders are interested. 'The deal' is what they dream of and live for. Mostly to build resumes or to strike out on their own. M&A is a burnout job in that the odds against fruition and the accompanying sense of purpose are so slim.
M&A are entrepreneurs who are really cowboys and cowgirls in corporate clothing. They're herders.
I have one example of a M&A buddy that started his own brand and sold it to PepsiCo. There was demand, Pepsi saw it, and Pepsi paid. Joe now owns a plane. Not a jet. Yet.
Like others I have made the decision to curtail my time on this page. Increasingly difficult to bear. Please know that I will continue to read and appreciate your and counterparts opinions that I regard as valid and of value.
Brittany says, "Hold On" (give it 62 seconds and then decide)
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