Here is Novo Nordisk’s bid for Metsera. Because the deal requires prolonged regulatory clearance, Novo will buy nonvoting convertible shares from Metsera, with the cash to be paid as a dividend to Metsera’s shareholders now. Since the convertibles are nonvoting, no regulatory preclearance is required, and cash gets to Metsera right away. Before NN can convert to voting and take over the company, it has to obtain regulatory clearance.

Which sounds fine except for how this looks a lot like what DOJ called an evasion of antitrust law just a few years ago with Toshiba and Canon.

Here, the parties might argue that this structure is not solely to evade preclearance, as it was there – it’s also to give assurances to Metsera in the context of a contested takeover battle, and meet contractual requirements to qualify as a superior offer. 

Maybe that wins the day but it’s why, I guess, Pfizer says this is an “illusory” offer and Metsera may not terminate the current agreement.

If I’m getting this wrong, though, someone let me know so I can edit/delete and bury my shame. (Commenting doesn’t seem to work well here but feel free to email).