Mallinckrodt, page-17

Interesting information, looks like MNK has a history of acquisition for growth, the logical conclusion being that they may be looking as MSB, test the waters, get a look at the potential products / chance of success, then takeover.

From the financials posted it sure looks like they need to do something to increase earnings.

I know a lot of people will jump in and say SI has too much skin in the game to let that happen, but I am sure if he accepted an offer that he would remain employed and gain shares in MNK at some stage as an incentive.

Food for though.


Yes, @Domero, that is good food for thought, thank you.

That's the fascinating thing about following MSB like we do: there's always some or other element of mental gymnastics that one can perform. I know of a no more interesting corporate evolution.

The only problem with your theory of MNK potentially acquiring MSB lies in this sentence of yours: From the financials posted it sure looks like they need to do something to increase earnings.

The key word there is "earnings".

And you are absolutely right, MNK have a major problem with earnings, which are undergoing organic decline in their core business, which is why they have been such aggressive acquirers over the past 2 years (to the point where their balance sheet is now stretched).

But where your thesis makes no sense is in the fact that earnings are something MSB has absolutely none of at this stage.

So for MNK to buy MSB, it would certainly not be for any earnings (it would be severely earnings diminishing for MNK).

And given MNK's elevated debt position, what MNK needs right now more than anything to help repair its balance sheet is a something that provides a source of capital (which MSB certainly does not), rather than something that presents calls on capital (which MSB does).

Besides, given MNK's stretched balance sheet, how on earth would MNK be able to fund an acquisition of MSB? With even more corporate debt? I think not. With MNK stock? I'm not sure too many MSB shareholders would be too happy finding themselves suddenly being shareholders in MNK.

No, I think that chances of MNK acquiring MSB at any stage over the foreseeable future is half of less than one percent of nothing.