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Another article in The Times today:
https://www.thetimes.co.uk/article/broker-quits-arix-over-rtw-takeover-875dkcms5
Again ohisay on advfn has cut& pasted. Here's the first part:
"
Broker quits Arix over RTW takeover
Alistair Osborne
Saturday November 11 2023, 12.01am, The Times
Peel Hunt, which has its HQ at 100 Liverpool Street in London, believes the Arix deal is unfair
PEEL HUNT
One of Arix Bioscience’s joint-brokers quit on the morning it announced a contentious takeover deal in protest at its inequitable treatment of shareholders.
Peel Hunt demanded that its name and that of its two healthcare bankers be taken off the release for the sale of the company’s assets to the rival life sciences investment company RTW Biotech.
It resigned with immediate effect hours later.
The investment bank, which had been brought into the deal late in the process, is understood to have told Arix that it could not sanction a deal that discriminated against three quarters of its shareholders to provide a cash exit on better terms to its 25.5 per cent activist investor Acacia Research.
Under the deal, unveiled at the start of this
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Another times article this morning about peel hunt quitting in disgust, surely they understood the deal of they put their name to it?
Surely this is an rns?
Here's the first part:
"
BUSINESS COMMENTARY
Don’t swallow dog’s breakfast deal at Arix Bioscience
Alistair Osborne
Friday November 10 2023, 12.01am, The Times
Four years on and Neil Woodford’s portfolio is still coming back to bite. The latest case in point? Arix Bioscience, once a darling of the fallen stockpicker but one now trying to pull off a deal every bit as unhinged as some of his.
On November 1, Arix agreed to sell its assets to RTW Biotech, another UK-listed life sciences investment company, via what is mainly an all-share deal. It was billed by Arix chairman Peregrine Moncreiffe as a transaction with “clear strategic and financial logic” set to provide a “meaningful long-term growth opportunity”. On the day of the deal, Arix shares opened at 130p. Thursday night’s price? Just 113p.
It’s not hard to see why. If the deal had been structured as the acquisition
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Thanks skid35, pretty scathing isn't it!
https://www.thetimes.co.uk/article/dont-swallow-dogs-breakfast-deal-at-arix-bioscience-b9r0x2g5n
(For non-subscribers, ohisay on the adfvn discussion board has done a cut&paste.)
Write up in the times completely trashing the deal and the arix board.
The more time that goes on the more apparent what a clanger this deal is. Following RTW it's strikingly illiquid, even fewer daily trades than this. If/when the buyout happens and people inevitably want to exit it's not going to be easy without cratering the price.
It has been quite some achievement since the offer announcement for the value of both funds to noticeably decrease. Normally in a takeover at least one party perceived as getting the better deal will get a boost, but here they've managed to significantly reduce value of both. Well done board.
Https://www.stockopedia.com/content/investment-trusts-some-thoughts-979216/
"I am just about over the terrible deal the board of Arix Bioscience (LON:ARIX) did with RTW Biotech Opportunities (LON:RTW) . Shareholders were not given a great deal- one shareholder got cash and all because it was an asset sale not a takeover. To be fair despite being less than happy about the outcome of the strategic review I see the Chairman of Arix has been buying shares- 100,000 over the last couple of days. If you want to invest in Biotech, buying Arix is a cheap way in to RTW Bio. And I read corporate broker Peel Hunt has stated the deal is not great for Arix shareholders maybe there could be ...
Lesson is beware an activist fund who bought from a distressed seller and was not really interested in biotech."
I just spoke with someone from the takeover panel.
The explained to me that the transaction is a purchase of assets and not shares, so it is not protected or covered in the same way as a takeover of the business. I asked them if anyone does and they said that sort of transaction is not governed and comes down to shareholders.
Basically RTW & the Arix board have shafted us and found a loophole as I thought they probably had.
All we can do is emphasise what a bad deal this is and vote it down when it comes to it.
Good shout Batterseafish, will do likewise. If they were allowed to proceed they'd also become majority shareholders before the vote, enabling them to steamroller a yes vote through, which seems like a straightforward stitch up.
Meanwhile with any luck a significant enough shareholder on the register clock board's plan for what it is and speak up against it pretty sharpish. Market reaction speaks volumes.
Downgrade from 172p to 115p, and it's worth reading this :
https://www.theaic.co.uk/aic/news/citywire-news/peel-hunt-downgrades-arix-after-rtws-opportunist-acquisition-proposal
Just sent to market abuse. Suggest others write to Lse too,
Please could you look into the proposed all share merger here. One large shareholder has been offered about £1.43 but minorities are being recommended an all share offer.
Also, should directors need to disclose if they have been offered positions in the merged entity.
Concerned minority shareholder.
The chat on the IC site was disabled some years ago. Nothing stopping us from complaining to lse.
With the share price where it is it doesn't feel like a takeover and there is no premium showing at the moment.
If it gets through the RTW share price may fall further as usually happens with all share takeovers. It would have been better to have it as a cash payment.
If anyone here is an Inverstors' Chronicle subscriber, perhaps they could ask Simon Thompson what he thinks about the legality?
I think if this doesn't get raised, it will be worth notifying the takeover panel - https://www.thetakeoverpanel.org.uk/
Thanks Steeltrader9, very good find!
https://www.burges-salmon.com/-/media/files/publications/open-access/guide-to-public-takeovers-in-the-uk.pdf
Very good point!
I just looked into this and read the following on a M&A Advisory site:
Equality of treatment
An essential requirement of the City Code is that all holders of securities of a target company of the same class must be afforded equivalent treatment. This principle manifests itself in a number of different ways, including a requirement for (i) all information to be made equally available to all shareholders; (ii) comparable offers to be made for each class of equity share capital; and (iii) no special arrangements to be made with any particular target shareholders.
You would have thought that the board and RTW would be aware of this though, so probably are trying to get away with it through a loophole.
Is it legal for one set of minorities to get 143 and others all shares? Thought under take over rules this is not allowed?
In coming up with the 'implied price' of 143p, they've failed to take into account the potential future flood of sales of RTW shares by those ex-Arix holders who don't particularly want to be RTW holders. RTW is quite illiquid (50-odd trades today, but usually less than 10) and has a bid/ask spread to match. Mr Market has anticipated this though, and their SP is already down to $1.06 bid, compared with the $1.1847 they used in their calculation.
In addition retail investors may also be hit for currency conversion charges. There is RTWG, which is £ denominated, but that has even fewer trades and a 10% spread!
Acacia, of course, would be immune to all this...
BTW The presentation is here, including a few words from Robert Lyne, but it's all pre-scripted management-speak:
https://www.rtwfunds.com/rtw-biotech-opportunities-ltd/results-and-presentations/
The 1pm Q&A might have been interesting, if we'd been invited...
Shouldnt post when I'm half asleep and havent had a coffee and havent read the detail!
Chard_Nicks suggestion sounds good - return of cash and then consolidate on an equal NAV discount footing.
Wouldn't be at all surprised if board were offered sweeteners, doesn't quite add up otherwise. Despite poor offer do think Arix represents excellent value at this SP. Can't see this deal being approved by shareholders, not at least in its current form, and in meantime could well flush out other bidders as it's now or never for them.
Terrible offer......wondering if directors promised board seats in combined group? Hopefully minorities won't be shafted here like Allied Minds and Metaltiger.
Yes if they want to wind it up nothing to stop them issuing a dividend equal to cash, then let RTW make their offer on the remainder. Otherwise giving away that cash is effectively the equivalent of blowing it all on a placing in another fund.
Right now RTW's entire market cap is $240m, so with this deal they about half their quoted value in cash alone, it's almost obscene how good a deal it is for them.
Why didn't they do a 1 for 1 swap by equalising NAVs and returning the residual cash to Arix shareholders?