I just spoke to Kevin Kelly about the deal and here are some of his thoughts.|
He feels the deal is a fair valuation but did in fact say it is on the low end of fair valuation. One of the main concerns in making the deal is that he feels that there is definitely a slowdown taking place in the industry (SIGA is just starting to see some pricing pressures) and he feels that if SIGA stumbles just one quarter, the stock will be punished and it will take a long time to recover. He also explained that with the small float and lack of liquidity, institutional investors were not going to touch the stock and therefore SIGA would not be able to get the following to help its multiple.
He did ask for stock deal from TYCO, but in deal of this size, they said no.