Buyout BingoOn April 21, 2016, CXR announced the formation of “a special committee of independent members of the Board of Directors to consider various strategic alternatives potentially available to the Company.”
Blackrock and Carlyle allegedly bailed on making a final round bid for CXR, but private equity firm Apollo apparently did make a final bid. Apollo has been on a buying spree purchasing what they consider to be undervalued companies (ADT Corp. for $6.9 Billion, The Fresh Market Inc. for $1.4 Billion, Apollo Education Group Inc. for $1.1 Billion, Diamond Resorts International Inc. for $2.2 Billion).
Brexit happened, possibly complicating the timing / conditions of an Apollo buyout announcement.
On August 12, 2016, CXR’s Q2 2016 Earnings report indicated reduced earnings guidance due to FDA approval of some competing generic drugs and currency exchange issues related to Brexit and the subsequent depreciation of the British pound sterling.
Text from CXR earnings conference call transcript as posted on the Seeking Alpha website quotes CXR CEO Mark Thompson stating: “With respect to the strategic review, it is ongoing. It has not stopped. We’re looking at one very specific opportunity. I recognize that people are frustrated that it’s taken so long, but if you look at the timing and events that have happened over the past couple of quarters, significant things like Brexit have come up which have been bumps in the road. The full Board is engaged now in what’s going on and we’re all quite hopeful that we’ll be able to provide some news shortly.”
On August 23, 2016 (today), CXR issues a press release stating “Concordia's senior management team is currently in a blackout period until the conclusion of the review of strategic alternatives and cannot proactively sell or buy shares at this time.”
I think CXR will eventually be bought out, by either Apollo or another private equity firm / pharmaceutical company……the question I have is when and at what price? My guess is the first half of September at a takeout price of $30 - $35.