A board's duty to maximize shareholder value is an expected value calculation. A $100B offer with a 75% chance of closing is valued at $75B, making an $80B offer with 100% certainty more attractive. Boards weigh financing and regulatory risks heavily against the headline price.

Contrary to conventional wisdom, pharmaceutical giants don't typically acquire biotechs when their valuations are at rock bottom. Like retail investors, they often wait for positive momentum and a significant stock price increase before engaging, driven by market psychology rather than pure value investing.

A large pharmaceutical company like AbbVie issuing an official public statement to deny acquisition talks is highly unusual. This strange move paradoxically suggests that the target, Revolution Medicines, is very likely in active deal discussions, just not with AbbVie. The public denial serves as a strong, albeit indirect, signal to the market that the company is in play.

Market reaction to M&A is nuanced. Despite four deals, investor sentiment remained low because three targeted private companies and the fourth had a minimal premium. This highlights that for public market investors, the *type* and *premium* of an M&A deal are more important catalysts than the raw deal count.

M&A is often framed as a win, but it can be detrimental to patients. The acquisition of an aggressive, fast-moving biotech by a large pharma company can lead to slowed development timelines and more conservative regulatory strategies, ultimately delaying access to life-saving treatments.

In a public company M&A battle, the fight extends beyond the offer price. The Paramount camp actively messages how Netflix's stock has dropped since the deal was announced, attempting to create shareholder pressure that prevents Netflix's board from increasing its bid.

A 'hostile' takeover bid is not defined by personal animosity but by a specific procedural move. After being rejected by a target company's board, the acquirer bypasses them and makes their offer directly to the shareholders. The 'hostile' element is the act of circumventing the board's decision-making authority.

A board's fiduciary duty is to maximize shareholder value, which is an expected value calculation (Offer Price x Probability of Closing). An $80B all-cash offer with 100% certainty is superior to a $100B offer with only a 75% chance of regulatory approval, as its expected value is higher ($80B vs. $75B).

Pfizer increased its offer to match Novo Nordisk's bid not just to meet the price, but to eliminate ambiguity for Metsera's board. By creating an offer with equal financial value but a clearer regulatory path, Pfizer made its bid the only logical choice, effectively removing the decision from Metsera's hands.