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Oilswellthatends some good food for thought, thank you.
Thanks for the good wishes.
Just trying to encourage people to think through the valuation . I’ll keep watching over coming weeks or months. Good luck to you.
IPO's can be more difficult and much more expensive. With an IPO, you'd also have to consider giving away a much bigger portion of the asset in order to attract investment. Where as here, if its something that we are expecting come in, the portion of the asset exchanged might not need to be as big and a more generous valuation could be attributed to the shell which will also give a better heading/support for:
1) the RTO to work.
2) to support any future fundraises or changes
3) investors will support any future RTO's elsewhere as trustworthy bod's are often hard to come by on AIM.
Just my view, I know you have a different one that is purely only listing + cash. But i'm adding in sentiment, past difficulties they've had with an RTO and significant losses that can be offset against.
But less subjectivity in valuation of cash shell, ie cost of listing 300 to 500k max plus net cash. Otherwise target co would IPO.
Valuation is subjective to those performing the RTO. We will just have to wait and see.
Answer depends how quickly they are burning cash raised, but possibly 20% of current market cap, and falling as cash is spent?
Venn was valued at £4m in the RTO which was the net asset value plus the cost of listing, and which was roughly double the market cap at the time of suspension, hence the near doubling of share price on restoration. What’s the net asset value of BOU compared with its market cap?
If target and offer is good suspension doesnt bother me either... Let people do what they need to.
Venn sp was 2.6 the day before suspension and touched 6.4 today
Suspension has happened and will keep happening for RTOs. As long as the target is good. Suspend. A suspension is only a delay
It’s been posted that there will probably be no suspension in trading if/when BOU RTO’s and the price will “multi-bag”.
I don’t believe that’s how it will work.
“Reverse takeovers
14. A reverse takeover is any acquisition or acquisitions in a twelve month period which for an AIM company would:
— exceed 100% in any of the class tests; or
— result in a fundamental change in its business, board or voting control; or
— in the case of an investing company, depart materially from its investing policy (as stated in its admission document or approved by shareholders in accordance with these rules).
Any agreement which would effect a reverse takeover must be:
— conditional on the consent of its shareholders being given in general meeting;
— notified without delay disclosing the information specified by Schedule Four and insofar as it is with a related party, the additional information required by rule 13; and
— accompanied by the publication of an admission document in respect of the proposed enlarged entity and convening the general meeting.
Where shareholder approval is given for the reverse takeover, trading in the AIM securities of the AIM company will be cancelled. If the enlarged entity seeks admission, it must make an application in the same manner as any other applicant applying for admission of its securities for the first time.” https://www.lseg.com/sites/default/files/content/documents/aim/2018/January/AIM_Rules_for_Companies_January_2018.pdf
Interestingly for our position as BOU holders there was a company who’s shares were restored to trading on aim last Tuesday, after suspension for one month due to an RTO. On restoration the share price increased 88%(hardly a multi bag but still very nice) in the day. Unfortunately I don’t hold any shares of that company, and can’t give any background to its situation(other than it was not a shell company) as I haven’t researched it yet.