As a goofy parlor game, about two-and-a-half months ago, I set out -- by product lines -- some guesses at 2008 through 2010 revenue streams, from various Schering-Plough franchises. I did so with the express purpose of helping the investing public (and analysts and bankers, too!) make more informed guesses at which pieces of Schering-Plough would fetch the most -- and the least -- in some mythical bust-up scenario.
Yesterday, Barbara Ryan apparently reinvigorated this tired old parlor game, with a renewed rumor piece -- since published by Bloomberg -- and so, I thought we could all play along. Any new guesses?
Obviously, I mean other than the current flavor of the month: JNJ/MRK combining to split-off the Consumer Products lines, from the Cholesterol Franchise, with each, in order, taking those lines, respectively -- and then either spinning off, or breaking down, the Animal Health and remaining old-line pharma pill businesses.
This goofy rumor leaves the twin problems of:
(1) All that Schering-Plough debt: who, and what, will pay it all off? and. . .
(2)(a) Contingent liabilities a-go-go: who, or what, would be willing to accept ongoing litigation responsibility for the current 145-plus suits (and the potentially $2-plus billion in payouts -- upon settlement, or trial)?
(2)(b) Perhaps more importantly, what would all those plaintiffs' lawyers demand/be willing to accept, as transaction hold-backs, escrows or assurances of adequate liquidity and solvency (you know they'll file motions opposing any transaction that decreases their potential recovery pots!) -- and what would Judge Cavanaugh be willing to sanction, as a fair order, in this regard?
Really, people, the rocky-road to closing any such rumored deal runs straight through the plaintiff-lawyers' front yard. Um, good luck with that.
Thus, as I say, this is very unlikely to happen -- Friday was a sucker's bounce, in Schering-Plough stock prices.
* He supposedly said "There's a sucker born every minute. . . ."