Don't Make Assumptions About Allergan CFO Quitting: Opening LineC. Thompson and Laurence Arnold
Valeant and its sugar daddy, Bill Ackman, extended their hostile tender offer for Allergan at end of last week until Dec. 31 -- because what else are they going do? -- which means this fight is going to go extra rounds.
It’s been nothing short of hand-to-hand combat -- and we don’t take the use of war hyperbole lightly -- with each side mounting presentations knocking down the other’s, with Allergan’s (roughly) insider-trading lawsuit against Valeant and Ackman’s Pershing Square, with Valeant’s call for a special meeting to rejigger the board, etc.
After receiving somewhere in the area of 4 percent of Allergan stock by the Aug. 15 deadline, Valeant CEO Michael Pearson and Ackman have a long way to go to get the 25 percent they need to call the special meeting, and they’re still going.
But with its leadership team intact, Allergan stands at least a fair chance of emerging from the Trojan horse Acktivism (tm) that brought this fight inside its gates.
Yeah, about that.
In the middle of Allergan’s fight for its life, Allergan Chief Financial Officer Jeff Edwards resigned yesterday for that most nebulous of reasons: to spend more time with his family. Jim Hindman will take his place.
The news hit Allergan stock, which dropped 1.7 percent on a day when the S&P 500 rose 0.85 percent and the S&P 500 Health Care Sector Index rose 0.77 percent. Then we noticed Valeant’s stock had fallen even more, down 2.2 percent.
So we asked around, and it turns out an event that normally would be viewed with suspicion and caution is being viewed a sign of strength for Allergan.
At Sanford Bernstein, Aaron Gal said by e-mail that he spoke with Edwards and accepts his explanation that this was a long time coming, only to be delayed by Valeant’s approach. Michael Waterhouse at Morningstar agreed, in his e-mail, that the timing was “a bit odd,” but didn’t assign too much weight to the decision and said he thought Hindman is a capable successor.
At BMO Capital Markets, David Maris said in a research note that he, too, had spoken to Edwards and that like Gal, not only is he not concerned, he’s taking it as a good omen for Allergan.
“[T]o us, it may be a sign that a strategic transaction marking a new chapter in Allergan’s growth may be nearing, and not an imminent change of control (which would be a significant financial gain for an executive. In other words, Edwards would be leaving a lot of money on the table if he believed a change of control of Allergan were in the future.)."
Is this deal a lulu or what? What is it, $53 billion?
Today’s U.S. economic indicators are CPI and housing starts at 8:30 a.m. EDT.
U.S. earnings are expected from Home Depot, Dick’s Sporting Goods, TJX Cos and Medtronic, which may have something to say about the state of its bid for Covidien.
A short time ago, the U.K. said inflation fell to 1.6 percent in July from 1.9 percent in June.
- Unrest continued overnight in Ferguson, Missouri, where Eric Holder is due to meet with authorities tomorrow. - Israel and Palestinian militants agreed to extend their five-day truce for 24 hours. - In Ukraine, some brave fighters opened fire on women and children among a convoy of refugees trying to flee, Ukraine says. - U.S. airstrikes that helped dislodge I.S. fighters from the dam in Mosul, Iraq, will continue. - India canceled the first formal talks with Pakistan in two years because it didn’t like Pakistan meeting with Kashmiri separatists groups first. - Meanwhile in Pakistan, Imran Khan is threatening to bring his supporters to Prime Minister Nawaz Sharif’s front door, literally, if Sharif doesn’t resign by 3 p.m. EDT. - Thomas Johnson is out, Julian Geiger is back in at struggling Aeropostale. - Who’s going after Family Dollar next? Probably not Wal-Mart. - Primary elections are held in Alaska and Wyoming. - Airlines are casting a nervous glance toward Iceland, where a volcano is threatening a repeat of the ‘‘ash crisis” that disrupted air travel in 2010. - Former Rabobank trader Paul Robson pleaded guilty to conspiring to manipulate yen Libor. - Corporate complaints about their tax burden are overblown, a report finds. - Germany, which was shocked, shocked that it might have been a target of U.S. spying, evidently has some explaining to do to the U.S., and to Turkey. - How do you say “Don’t Venmo me” in Chinese? - Four men died on a flight from Florida when their Cessna crashed on approach to its landing in the Bahamas. Identities are pending. - Authors of a college textbook covering plagiarism are accused of plagiarism. - Steve “Basket” Ballmer turned on the crowd last night in his debut as the Los Angeles Clippers’ owner. - The crewman who died after a fire erupted on a chemical tanker off Oregon was buried at sea. - New York’s Metropolitan Opera and unions reached a tentative labor agreement. - Hashim Khan, who forged a Pakistani squash dynasty as one of the sport’s greatest players, has died at 100. - Don Pardo, the former announcer for “Saturday Night Live,” has died at 96.
Once again, the liberal media speaketh in near-lockstep unison. We suppose this follows one of those secretive leftist agenda-setting sessions, over chardonnay and brie, at some luxe residence in Manhattan, the Hamptons or Martha’s Vineyard.
The target du jour, a favorite among the MSMers, is Rick Perry, still (believe it or not) the governor of Texas, still hard at work erasing memories of the “Oops” heard ’round the political world. And blood is in the water, thanks to the Travis County grand jury that indicted him for abuse of power after he cut funding to the public-integrity unit of a Democratic district attorney.
Get the daggers out, Northeasterners -- it’s Perry-hunting time! Who’s first?
“To describe the indictment as ‘frivolous’ gives it far more credence than it deserves. Perry may not be much smarter than a ham sandwich, but he is exactly as guilty as one.”
Hmm. Maybe Chait missed the meeting.
Over to you, Amy Davidson at The New Yorker:
“[L]ooking closer at the story, one feels almost sorry for Perry -- really sorry, not just pitying in the way one did when he seemed to forget where he was during the Republican primary debates in 2012.”
Fellow journalists, we beseech you! How can we pile on if nobody casts the first stone? Fortunately Bloomberg News has an editorial department, which will take its best shot at Perry in 3 … 2 … 1 …
“The criminal case against him is a farce and should be dismissed faster than prairie fire with a tail wind.”
OK, call off the dogs.
Call it the MADD effect: after three decades of mothers (and fathers and everybody else) condemning the recklessness of driving while intoxicated, a DWI charge carries an enormous stigma. And when the accused is a member of the law-enforcement community -- say, the very district attorney, Rosemary Lehmberg, whose battle with Perry spurred his indictment -- few if anybody wants to take her (or his) side.
So that does it for the storyline of the power-hungry Texas governor willing to bulldoze anything and anyone standing between him and the White House. It was, to be honest, an overly simplistic formulation to begin with.
Sort of like the notion of an effete, liberal, monolithic mainstream media that would never defend a guy like Rick Perry.
Imagine it’s 1440 and newspapers are flying off the shelves (just go with it) as readers in Europe can’t get enough news about Turkey’s attempt invade Belgrade, which is Serbia now but who knows what that was back then. Reporting there from the scene was Johannes Gutenberg.
Or imagine it’s 1836, and people are flocking to London from around the world to see the railroad come to London. Off to the side, recording it all -- one silver-plated sheet of copper at a time -- is Louis Daguerre.
It’s kind of how someone might write about the events in Ferguson, Missouri, many years from now, because there at the scene, reporting live, is Jack.
@Jack, that is. Jack Dorsey, the 37-year-old billionaire chairman and co-founder of Twitter, the first one to send a tweet.
Dorsey’s a St. Louis native and he’s been putting himself on the ground and in the way like the rest of more mainstream media, covering the upheaval 140 characters at a time.
Speaking of the challenge, it was just last week that Microsoft CEO Satya Nadella was talking a little smack, touting the company’s cloud services after successfully taking the cold bath and daring Jeff Bezos and Larry Page to join him.
Pretty clever, calling out the CEOs of his closest cloud competitors.
So it’s a little unfortunate that Microsoft’s Azure cloud-computing service chose yesterday to, eh, come down to Earth. The service was down in “at least six of its major components in multiple data centers,” Jack Clark reported late yesterday, with interruptions lasting hours.
Next fundraising fad for CEOs: the eating-crow challenge.
From 1949 until last year, a cheesesteak shop in Philadelphia was called “Chink’s Steaks.” The founder, Samuel Sherman, wasn’t Asian but might have looked so. Not too long after Sherman’s widow sold the shop in 1999, its name started becoming a thing.
Now it’s called “Joe’s Steaks & Soda Shop.” The PC-backlash crowd in Philly didn’t take well to the change, but they got over it and life went on. With fried onions and provolone, one hopes.
Entering the NFL season, the controversy over the name of Washington’s mascot -- the Washington Redskins; there, we said it -- was already a thing and getting reminiscent of the weight that started to hang around the neck of Augusta. Of interest was whether a new vocabulary, one of omission, would take to the air.
As the R-words were taping up before night’s preseason game against Cleveland, announcers from CBS Sports discussed the leeway they’d been given to decide whether to use the name. Phil Simms says he’ll probably avoid it, same with Tony Dungy. Not so much Jim Nantz, who said he didn’t think it was his job to make the call.
“My very first thought is it will be ‘Washington’ the whole game,” Simms said. He’ll have to make his decision by Sept. 25, when CBS airs Washington’s game against the New York Giants.
Fox Sports’ Troy Aikman has already made his. “As long as their nickname is the Redskins, I’ll continue to call them the Redskins,” he said. ESPN is sticking with the name, as you heard last night from Mike Tirico, Jon Gruden and Chris Berman during Washington’s 24-23 win over Cleveland during which Johnny Cleveland appeared to make his feelings toward the Washington team clear.
These personal discretions aren’t likely to change Daniel Snyder’s decision to defend the name. But they’re out in the open now, no matter how small, and like pulling a thread on a sweater, you never know where it might stop.