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Concordia Healthcare Corp. T.CXR.R



TSX:CXR.R - Post by User

Comment by Hockeyzon Sep 05, 2016 8:33pm
166 Views
Post# 25208629

RE:RE:RE:RE:Takeover/Way Undervalued

RE:RE:RE:RE:Takeover/Way UndervaluedLati:  The credit and guarantee agreement you posted are all part of the $3.4 billion in loans outstanding.  The USD term loan has $1.03 billion US outstanding, the pound sterling loan has $637M US outstanding and the revolver is zero as it has not been drawn on as per Note 11 in the June'2016 financial statements.  The $220M earnout is also included inthe $3.4 billion in loans as per Note 18.

What I am saying is even if the purchasers pay $16 per share for CXR (double the current price) and pay off all (100%) of the debt of CXR so they are debt-free (and therefore there would be not interest on the debt), the new purchasers would still get a very good 12.4% return on their $4.2 billion investment.

Alternatively, if the new purchasers did not pay off any of the debt (then there would continue to be interest on the debt), their yearly return on investment would be 30% ($4.81 per share of earnings divided by $16 purchase price of shares).  Either way looks like a very good return for the purchasers, combined with filling up their drug pipeline and 60 new drugs in the next few years.

I do not know where you get the $2.2B of assets from.  All I am going by is the earnings expected in the future to determine the return.

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