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If Acacia are going to stick around, maybe they might ask for a seat on the Arix board? I'd have thought 20% ownership would entitle them to that (if they actually wanted it).
I expect they have acquired this at a discount at nav. Looking at their website this is relatively immaterial in their overall portfolio, so hopefully a stable influence.
All part of this :
https://www.yourmoney.com/investing/woodford-investors-set-to-share-97m-in-fourth-round-of-payments/
Now the question is what will Acacia do?
Always the overhang on this stock.
Looking forward to a narrowing of the nav, great news.
Sgd,
As a start you are looking at revenue / cash rather than profit for the entity - valuation would not be based on this element alone as it opens other doors elsewhere.
We need to wait for the next set of valuations to see whether they will uplift.
Whatever I still think we are at a ridiculous discount to nav.
Hi folks, yes, great news today. I'm trying to do the sums :
The figures we're given are $30m upfront + $860m 'per target' + 'double digit' royalties.
Taking Arix's 12.7% and converting to £ :
£2.8m upfront + £81.5m 'per target' + £?m royalties.
Arix's SP is up around 18p today, equating to mcap increase approx £24m.
So the market is valuing this at around a quarter of a 'target' - and I'll be first to admit I don't understand exactly what a 'target' represents. Is this reasonable?
50 trades by 10AM today - signs of life!
Was looking to top slice profits after the last rise but held off, my 10k shares now a very long term hold to see what other gems unfold here. Th he biggest investment trust in my Sipp with the recent rise.
Interesting that merc (admittedly a different sector focus and a fund manager on the side) announced the start of dividends.
The large trades are getting larger!
the £20m was a figure I had in my head from when the SP was sub 100p, so completely out of date. I agree that a share buy back sounds like a no brainer to deal with the Link holding
Firstly it's good link hasn't gradually sold down these in the open market, I don't think it's in their best interest anyway.
Postulated this earlier especially if arix do not have investments lined up for this cash. I am not sure on the company law perspective here, whether this offer would need to be open to all shareholders.
Share price seemed to have found its range around 150p, looking forward to the next update.
Who's going to want to buy the 27m Link shares? What we're looking for is a company with lots of spare cash sloshing around, that is looking to invest in undervalued assets in the bio sector.
Does anyone know of a company fitting that description? I do, it's called Arix! The case for a share buyback seems overwhelming to me.
How would it work? Well let's say they made a generous offer at a 10% premium to today's SP. That would cost around £44m. Now there would be 20% less shares in circulation, so we'd each own a 25% bigger slice of the company than we did before. Of course the company would now have £44m less in the bank, but I can't see that dropping the market cap by as much as 20%. So everyone's a winner!
This would be more effective than a special dividend, and probably better for most investors from a tax perspective. Maybe I'm oversimplifying or missing something, but it just seems like a no-brainer to me.
Hi jxck, I agree, but did you mean 20% ( = 27m shares = £40m ) ?
Realistically it will have to be privately organised sales, as the liquidity here in the open market is obviously miniscule!
it's going to take a while for Link to sell their £20m at this rate, but it's a move in the right direction
Large trades - yes, good to see! Makes sense to me...: the transaction earlier in the month is likely to have triggered some due diligence on Arix and its portfolio. Detailed due diligence in life sciences doesn’t happen overnight and could easily take a few weeks, bringing us to around now..
Im hoping that investors have completed their DD and think the price vs NAV is a significant miss-pricing opportunity. Let’s hope some of them are bidding Link for clips of its stake.
Some large trades starting to appear.
"...and whilst it's a phenomenal outcome, we expect plenty more of these kind of results within our portfolio,
both our current portfolio and the companies that we will invest in in the future..."
Hope he's right :-)
Posts that don’t age well :-(
I think we can all agree that there's a disconnect with the SP right now. I'm racking my brains to try to come up with theories:
1. PI Psychology: reluctance to buy _after_ seeing an increase of ~50%.
2. II's now in lockdown and haven't got their act together yet.
3. Link fund deciding now is a good time to do a fire sale of the ex-Woodford shares.
4. Fears that listed portfolio shares (AUTL, LOGC, etc.) may drop in value following US election.
Any additions to this list welcome!
Just added more @162p (showing as a sell, as Bid/Ask=160/170)
I emailed Arix investor relations this morning and had a remarkably rapid reply, which essentially confirms what JohnLaw just posted. Here's the relevant bit :
"
Thank you for your email and for your support as a shareholder. We are delighted with such a strong multiple just two years after we invested in Velos.
In terms of tax, our capital gains typically attract corporation tax at the current rate of 19%. Where possible, we look to take advantage of available exemptions, notably Substantial Shareholding Exemption (SSE). Where eligible, SSE reduces tax on gains to nil. As this is a fairly nuanced exemption and relies upon individual investment fact patterns, we are not yet in a position to confirm whether a portion of our gain on VelosBio will be eligible for SSE. The detailed tax impact of this transaction, and all other financial events occurring during 2020, will be included within our Annual Report and Accounts.
"
Correct Skid: "Where possible, Arix aims to take advantage of the UK’s
Substantial Shareholding Exemption, which exempts taxable gains or losses arising from the disposal of shares, where certain conditions are met." (2019 Accounts)
2 x £20k
1 x £50k
Loading up and why not!!
The % discount doesn't seem to have materially narrowed, despite 1. Substantial asset now seen as a "cash equlivalent" 2. The investment model and management team showing they are picking winners 3. What has been shown to be prudent valuations of investments