George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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Poor offer imo, it's just transferring shares from one highly discounted biotech fund to another, not unlocking any value. RTW's track record is highly unproven and they're trading close to an all time low.
Not all NAVs are equal, Arix's is far superior because of the huge cash component. This deal would simply gift RTW an absolute boatload of cash, no wonder they're keen to acquire. The mystery is why Arix board have rolled over so easily.
Simon Thomson:
https://www.investorschronicle.co.uk/ideas/2023/11/01/is-rtw-s-offer-for-arix-a-good-deal/
"So, although I feel the combining of the two groups makes strategic sense, I would hold out for an improved offer from RTW. Hold."
Stockopedia commenters aren't happy either:
https://www.stockopedia.com/content/small-cap-value-report-wed-1-november-2023-spe-vtu-eck-978918/
Arix Bid now 118p.
Mr Market saying this deal ain't happening?
Current RTW sell price is $1.06 = 87.3p
x 1.4633 = 128p
But Acacia get to sell theirs for 143p cash.
Hmmmmm...
Need to do the Maths outside work - why havent we seen a larger rise this morning or are we getting this wrong ?
So we're getting 143p for each share when our NAV is 180p? That's still a substantial discount.
RTW Biotech appears to be trading on a discount of 28% so for those happy to continue to hold until the market improves the deal doesn't look too bad.
Anyone looking to exit now are likely to be short changed IMHO.
Great RNS
- significant value recognition
- ability to continue to hold in sector as an rtw holder, rather than selling and having to deploy
Https://masterinvestor.co.uk/evil-diaries/evil-diaries-costly-reading/
"As readers know I am addicted to asset situations, particularly tangible assets. One that popped up last week was Arix Bioscience (ARIX), now 120p to buy. There is an astonishing 90p a share in cash with the rest made up of listed and unlisted investments worth, seemingly, 90p+ a share. Further, the directors have declared that they will do something about this absurd state of affairs. I would take them at their word and squirrel a few away."
Or simply paying out some of the cash
Could be in specie distribution to shareholders
Hi DrPatience,
Watching the video, I didn't think the wind-down option was a foregone conclusion. But assuming it happens, I think you'd also have to allow some discount on the listed portfolio. It will be interesting to see what happens to those SPs on the day a wind-down decision is made. So I'm guessing 150p as a round number.
If that does happen then one possible strategy I have in mind would be to use some of the wind-down proceeds to buy the now artificially deflated shares in those companies!
Thanks SGD27, will watch with interest.
Just applying the RNS figures: cash+listed shares worth around 130p per share. Assume fire sale of unlisted shares at 50% of value (pretty conservative) then cash + listed shares + 50% of unlisted sharees => 156p per share.
They should just get on with it then. Easy trading opp for small investors with cash due to price misalignment. Very nice. Main risk is them not throwing the towel in the ring. Hopefully they do, they had their chance and failed. Simple.
The video of the presentation, including Q&A, is here :
https://www.youtube.com/watch?v=Uiep29cj9_8
Concluding remark: biotech has been depressed for a while...which for a company with so much cash would have a brilliant opp to buy for the future. What a wasted opportunity.
Meant VC not PE, sorry..
Invested at IPO and topped up during covid, but what a disappointment overall. Return of capital now makes sense, since the private equity model could not be pulled off by various lots of C execs. Wind up worth a great deal more than current sp, so appreciate why people are buying in. Should be easy money...
Https://www.investorschronicle.co.uk/ideas/2023/09/27/cash-return-beckons-for-arix-shareholders/
The presentation for today's results is here:
https://ether-assets.ams3.cdn.digitaloceanspaces.com/arix/documents/Presentations/Interim-Results-27.09.2023-FINAL-10.50.pdf
R Lyne is stepping down "to pursue a new opportunity". This is it:
https://www.streetinsider.com/Corporate+News/PureTech+Health+%28PRTC%29+Appoints+Robert+Lyne+as+Chief+Portfolio+Officer/22203091.html
Gallmat,
Does he though? How much analysis have you read from ST beyond what's already been written by a broker beforehand? Arix (ironically) is one exception to this. And Kromek is another (dear to Skid35 if I remember rightly). But let's say 90%-95% of ST's tips are already covered by Cenkos/CG/Finncap/WHI and fair play he does condense it into a format suitable for less sophisticated PIs, but there's quite a bit of regurgitation, after the fact.
If you ever listen to him on a podcast he talks a very good game and I've read both his books and they are both a very good read and useful, to be fair. And also to give credit where it's due he's managed to pick Bargains of the Year which by year end each year have in aggregate returned good returns (Arix being a laggard from the 2022 stable and 2023 stable too I think)
When I realised I was paying for regurgitation I stopped paying for IC, and instead pay for Research Tree and get updates straight from the horses' mouths instead.
GLA
I think he generates initial good ideas.
However he has a tendency to give the companys benefit of the doubt too much. And not be timely enough on market sentiment.
E.g rates rising. Dunp reits mate (nothing)
Presumably full liquidation and distribution on the cards..........£1.70 at least awaiting us. Many director purchases perhaps suggest this outcome.
Interesting today to see Bellevue comment that they are mulling launch of a private company healthcare trust. Can t see this getting off the ground with current discounts and climate.
Another ST write up in investors chronicle. Not a fan of ST, like a bloke on the horses constantly reminds you of his winners and forgets his losers, with some deeply suspect picks.