There's nothing like a good hostile takeover to get you in the holiday spirit.
Now things are really heating up. Yesterday Biogen told Facet's shareholders it's ready for a proxy fight. The company wants shareholders to tender their shares before the offer expires tonight and they'll vote to elect a board that will sign off on the deal.
Facet countered today by allowing one of its largest shareholders, The Baupost Group, to increase its holdings from 14% to 20% and said that it had commitments from its two largest investors, who collectively hold 28.7% of the shares, not to tender their shares to Biogen. Shares fell substantially on the news, presumably because investors were hoping for a takeout at $17.50 per share, but have since recovered much of that drop. Wonder if Baupost decided that the drop was a good time to use its new-found power?
Assuming Biogen can't get shareholders to tender more than half of the shares, the ball will be back in Biogen's court. The company said $17.50 per share was its final offer, but it also said $15 per share was a fair offer back in September and eventually raised the bid. At $17.50, Biogen is getting a good deal because it'll come with almost $13 in cash and no debt, thanks to the spinoff from PDL Biopharma
From the sidelines, hostile takeovers are much more fun to watch than civil acquisitions like Pfizer's
But for investors who own shares in Facet, it has to be nerve-wracking. A Christmas present from Biogen in the form of a higher bid may be coming, but the box might also contain a lump of coal. If you're a long-term believer in the company's pipeline, then either outcome should be acceptable. If you're not thinking long term, then you probably shouldn't be holding the shares anyway. I hear Vegas is warm this time of year.