"Of course, the beauty of [a move to Ireland] is that they would have room to shell out for acquisitions," said Janney Montgomery Scott LLC analyst Jim Molloy by phone Wednesday.
Earlier in the day, Molloy had released a research note that said Janney Montgomery "believe[s] that moves still exist to quickly unlock shareholder value. One can point to a re-domicile to Ireland with its business-friendly 12.5% tax rate or even the purchasing of a late-stage asset to diversify revenue."
It was on Tuesday that Anaheim, Calif.-based Questcor said that it's looking at strategic alternatives, but didn't elaborate. The announcement was initially made at JPMorgan Chase & Co.'s 32nd Annual Healthcare Conference in January.
The decision to explore its options comes after Questcor last year appointed some new faces to its board. On June 10, the company announced it had appointed Angus C. Russell, who had recently retired as CEO of Shire plc, to its board. Then, on Nov. 12, Questcor appointed G. Kelly Martin, the CEO of Elan Corp. plc as a director. Both men now head the special committee that is overseeing the review.
"I think these guys were brought on to help the company transition to Ireland," Molloy said.
The analyst said he believes a Nov. 5 announcement by Malvern, Pa.-based Endo Health Solutions (ENDP) may best illustrate the benefit of a move to Ireland. Endo said it intended to buy Montreal-based Paladin Labs for $1.6 billion in stock and cash. As part of the deal, which won final regulatory approval Feb. 18, Endo set up a new company based in Ireland to own both Paladin and its legacy business.