soma2022
1日前
Over a dozen parties hosted at the Revance open house and it appears that a couple had real interest. My focus is on party B overture of $250M investment for majority control. In essence, they wanted to invest $250M for 50+% share ownership = just over 105M shares = a secondary offering at $2.40/share. I am not optimistic, but let's see how motivated they may be now that lower TO price has printed. Perhaps shareholders may be willing to accept a significant share dilution for the chance to recoup some losses if newco can right this ship rather than the Crown go private.
Highlights of the Schedule 14D-9:
On February 2, 2024, Party B, a strategic party, executed a non-disclosure agreement with Revance (the “Party B NDA”) in connection with Party B’s consideration of a potential strategic transaction with, or investment in, Revance. Prior to February 2024, Revance and Party B had general conversations related to the potential for the parties to consider a potential strategic transaction or other partnership opportunities, but no specific terms were discussed.
On March 4, 2024, Revance announced the pricing of an underwritten public offering of 16,000,000 Shares at a public offering price of $6.25 per share (except with respect to 30,000 Shares purchased by Mr. Foley at $6.98 per share).
[color=red]On April 3, 2024, Revance received a non-binding proposal from Crown indicating Crown’s interest in pursuing an acquisition of Revance for $9.25 per share in cash, which indicated that Crown’s proposed offer price would be subject to completion of customary due diligence (the “April Proposal”).[/color] The April Proposal represented a 105% premium to the closing stock price of Revance’s Shares on April 2, 2024, the last trading day prior to the April Proposal. The April Proposal was based on certain assumptions made by Crown, including its review of publicly available information, information provided to date, and preliminary discussions with Revance.
On July 22, 2024, Mr. Foley met with representatives from Party B to continue discussions regarding a potential collaboration for a minority investment. No specifics on valuation or investment amount were discussed.
On August 10, 2024, a representative of Centerview met with a representative of PJT to discuss the offer price per share based on Revance’s latest available internal capitalization information. The representative of PJT confirmed that based on the fully diluted equity value offer of $719 million, the final price per share based on updated capitalization information is $6.66 per share (the “Original Offer Price”).
August 16th, 2024 Teoxane Breach Claim.
On November 24, 2024, representatives of Party B and representatives of Revance management had a phone conversation (the “Party B Overture”) whereby Party B stated that in the event that the transaction contemplated by the Original Merger Agreement does not move forward, Party B would be interested in considering a potential transaction with Revance that would involve: (i) an investment up to $250,000,000 in Revance in exchange for a majority ownership position in Revance by Party B and (ii) a significant commercial relationship between Party B and Revance.
On December 9, 2024, representatives of Party P contacted representatives of Revance via Short Message Service (the “Party P Overture”) and stated that Party P would be interested in discussing whether there was a potential opportunity to make a counteroffer to the Buyer Parties’ Offer. Party P did not provide any further detail regarding the Party P Overture and as required under the A&R Merger Agreement, Revance did not request additional detail or engage with Party P.
Other Items:
Inability to Solicit Takeover Proposals. The A&R Merger Agreement contains covenants prohibiting Revance from soliciting other potential acquisition proposals and restricting its ability to entertain other potential acquisition proposals unless certain conditions are satisfied. The Revance Board also considered the fact that the right afforded to Crown under the A&R Merger Agreement to make adjustments to the terms and conditions of the A&R Merger Agreement based on an alternative acquisition proposal that the Revance Board determines in good faith is a Superior Proposal (as defined in the A&R Merger Agreement) may discourage other parties that might otherwise have an interest in a business combination with, or an acquisition of, Revance.
•
Termination Fee. Revance may be required to pay the $13,373,000 termination fee to Crown if the A&R Merger Agreement is terminated under certain circumstances, including by Revance to accept a Superior Proposal. The Revance Board considered the risk that the amount of the termination fee would deter potential alternative acquisition proposals.
mouton29
1日前
That Revance and its financial advisors have been shopping the company for some time and getting indications of interest from multiple parties, on and off, till a few days ago. The first approach by Hildred (owner of Crown) was in November 2023. Contact with a variety of third parties has continued since then. In my view, it seems highly unlikely a topping bid appears at this point, even from Teoxane.
In the "Reasons for the Recommendation" [by the Board in favor of the tender] on page 30 there is this summary:
Strategic Alternatives. The Revance Board, with the assistance of Revance management and advisors, engaged in a comprehensive evaluation of strategic alternatives, including acquisitions of Revance or components of its business, additional capital raising, a merger, partnerships, collaborations and equity investments. During this process, Revance has engaged with over a dozen third parties across strategics and financial sponsors to determine interests in pursuing a transaction. As of August 11, 2024, Crown was the only party to submit a proposal in connection with a strategic transaction. As of the date hereof, Revance has not received any offer or proposal that constitutes a Superior Proposal or could reasonably be expected to lead to a Superior Proposal under the Original Merger Agreement.
As to the settlement with Teoxane, there is this discussion:
Prior to entering into the Sixth Amendment and the ANZ Distribution Agreement, on October 24, 2024, Revance communicated the terms of both agreements to Crown and sought their approval pursuant to the terms of the Original Merger Agreement. Crown withheld such approval, including because it was Crown’s view that, with respect to the Sixth Amendment, the Sixth Amendment (i) increased the minimum payments due to Teoxane, beyond projected sales levels for the Teoxane products, (ii) created risk that the Distribution Agreement could be terminated by Teoxane prior to completion of the remaining license term, (iii) provided operating terms more burdensome than the prior arrangement under the Distribution Agreement and (iv) with respect to the ANZ Distribution Agreement, such agreement provided Teoxane with rights for the Australian market on terms that were highly unfavorable to Revance.
The entrance into this Amendment without Crown's consent was a breach of the merger agreement and gave Crown a walk right, if refusing consent was reasonable.
IanFromSI
3日前
Do you actually believe that the more you engage in ad hominem attacks against me will get you back some of the money that you lost by ignoring me?
My only objective was to, hopefully, help prevent people from losing more money than they were willing to.
In your case, and based on all of your comments against me I must admit that it is rewarding that you didn’t listen to me. Another fine decision.
May you have the same good luck in your future investments.
Oh, by the way happy holidays,
Best regards,
Ian
IanFromSI
3日前
What baffles me is that nobody has stepped forward to make a bid for the therapeutic uses of Daxi.
You do understand that ReVance has committed to sell the entire company to Crown Labs, don’t you?
…. And that Crown Labs has committed to buy the entire company from RVNC.
In what city, country, continent, world, or universe do you believe it’s legal to sell the same asset multiple times concurrently to multiple different buyers?
Do you have your answer now or must I go into even further details?.
DC15: 4 people “liked” the post I’m responding to !!!! WTF? Do you still think that compiling this list will do any good for anybody that uses IHub?
soma2022
4日前
Revance History and Where We Stand (My post from Nov 2023 is linked here: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173214109)
For what it is worth: EV back in Nov 2023 was $650M and EV of current TO is around $585M at Tender price of $3.10 and 105M shares, $427M debt, and my estimate of $165 to $170M cash at year end.
I am very surprised by the significantly lowered price and disappointed.
25 years of human work/effort to get here and develop a differentiated Neurotoxin that is superior on a price/performance/duration basis. Zero approval risk. Over $1B invested to get here, now approaching year 2 post commercial launch with continued and significant market uptake and injector growth while gradually closing in on the more rapid upswing phase of their growth curve from 2026 to 2030. I estimate forward 12 month Daxxify sales of over $150M (despite the transition to Crown) and over $140M annual sales of RHA past 12 months at 60 to 65% GMs. Sales force and mid levels being right sized and messaging and training and injection patterns getting optimized and perfected with high satisfaction rates for Daxxify and strong word of mouth. The product works well! Then add in the potential of therapeutic revenue once they have cash to restart trials in spasticity and support the CD launch in 2025 onward.
Crown is paying 60% below invested capital on a real basis while saving over 10 years of human drug development capital. Backing out the value of the RHA agreement, I feel Crown effectively paid around $400M for Daxxify. Let that sink in, and they have over $1B in carry forward losses on the books.
For a new NT competitor to come along and compete against Revance, they will have to spend over $1B in drug development costs and need at least 10 years to get to where Revance is today and you can simply buy Revance today at less than half that price fully de risked.
The implications are significant, and the Daxxify story is far from over. If anything, Daxxify just gained even more superiority on a cost/performance basis because of this. Kudos to Crown and their PE backer. This will go down as a master class in Vulture capital. A private Crown with no reporting requirements, running much leaner than Revance ever did, and having acquired their NT at 30 cents on the dollar on a real basis will wreak some havoc on the $2.5B US Neurotoxin market. For Allergan, Galderma, Evolus, Merz, etc to sit idly by and allow this acquisition at such a low price will come back to haunt them in ways they have not yet considered. Crown will almost certainly cannibalize pricing in the coming years. I predict that a $400M Daxxify acquisition price today will destroy over $150M a year in profit margins for the entire US NT market in the coming years. For this reason, Allergan and the others should have made sure to force Crown to pay up. The original $6.66 TO price = EV: $950M, IMO was the right price to keep Crown from causing too much damage to industry pricing.
I see Crown growing their Daxxify business over the next 2 to 3 years and then taking the company public again at a value 3 to 5x greater. Congratulations to the Crown team.
Though I am not optimistic, now that the low ball offer of $3.10 has printed, perhaps we get a competing bid from someone from a defensive strategy. Allergan paid over $2B for Coolsculpting and Kybella and those products had no significant market potential. Daxxify at this price to Crown stands to harm Allergan and the other NT cos significantly.
mouton29
4日前
An amusing part of this is Teoxane is probably feeling especially screwed now.
Seems to me that Teoxane played its hand like a foot, which was not so promptly shot. By forcing Revance to modify the Teoxane supply contract, Teoxane essentially caused RVNC to grant Crown an option to tender for RVNC at 6.66 or collect a premium (i.e., break fee) of $28,760.000, because the modification of the supply contract (and grant of the Daxi license in NZ) without Crown consent breached the merger agreement and gave Crown a walk right. Having delivered Foley's nuts in a vise to Crown, Crown then proceeded to squeeze.
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