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As investors, we do not possess sufficient information or expertise to value Nanoco's intellectual property objectively. Consequently, we either have to sit it out and see what emerges from the protracted (my view) bi- process, or else sell up in case there is no agreement - in which case the share price will tumble.
The problem with that theory is, if they pay much more than 30-40% premium to the SP... Whoever "they" are, will not see it as VALUE....
totally agree....but 18-20p would be a high price rom here?
Hi jplay,
What about this article a few years ago regarding Apple having ambitious plans for integrating smartphones in the medical field. An i-phone powered lab that can detect cancer with 99% accuracy :-
https://9to5mac.com/2016/10/22/iphone-powered-lab-that-detects-cancer/
One of main problems is nanoco has so many different areas. Harder to sell many areas than focus on one such as nanosys. Even nanosys do not bother with mobiles or tablets, just tv display. Nanoco specializes in Display, qd dots micro led, growth lights, vertical farming, car sensors, cancer detection. Medical, automotive, display, endless list of applications. Dow, Merck, wah hong will have to deal with new owners. Maybe nanoco will keep the medical side.
What would Apple do with cancer detection patents???
I suspect that Nanoco will claim a high price for the following reasons:
(1) The quantum dot market is gigantic and continuing to grow.
(2) Many basic patents already exist.
(3) Anyone entering the field at this time is likely going to face many legal battles..
(4) Nanoco's 750 patents offer safe harbor, product opportunity, and licensing revenue.
(5) Companies with sufficient financial resources could reap huge benefits with relatively low investment.
"it says parties (more than one), so I assume they were contacted by 2 (or more) companies,"
"Certain parties" only establishes that the amount is more than zero. Some might say your choice of assumptions are based more on wishful thinking than logic, not me though ( :
CEO’s speak to each other regularly and mergers and acquisition is part of business, so certainly not unethical. I suspect Nige just used the wrong terminology in his post.
I am more than comfortable with the Strategic Review approach taken by the Board at this stage, when it has just banked the last contractual payment from the US partner (prob Apple) and before the cash burn guarantees a fire sale. If the process does not secure a decent premium it should generate awareness if not an order. If not, I cannot see that NANO is a viable ongoing concern. We shall find out which very soon and perhaps even next week and my money is on a positive outcome.
The sale option is embedded within the strategic review of options which is needed because they lost their only source of revenue. So if "No need to sell" is the only reason to "assume they were contacted", it's a pretty flimsy one: the need is implicit in the review.
A company running out of money with very little revenue has good reason to seek out buyers, arguably a much stronger reason to assume that it was Nano who initiated the sale talk, and why would that be unethical - it's surely just part of seeking to maximise returns for shareholders, as stated in the announcement of the review when the idea of a sale was first mentioned.
Hi BBD
I agree the wording doesn't say much, but cannot believe that they started ringing around. Would that not be a bit unethical for a CEO? Also it says parties (more than one), so I assume they were contacted by 2 (or more) companies, then decided to go all in. Then, "a review of all the strategic options for the Company, including, but not limited to, a potential sale of the Company".
Don't think they need to raise any more cash for at least a year and should get that easily (from Loam), and all the strategic options infers 2 or more - mergers etc, infers they are not desperate for a Deal at all, so again hardly driven to ringing around.
Maybe I'm reading too much into it, but this is basically what I thought when I first saw the RNS. No need to sell so must have been approached.
BoL
The wording gives little away, like most Nano statements. It doesn't say, for instance, that Nano were approached regarding a sale, they may have just started ringing around everyone they know, and it would still pass the "entering into discussions with certain parties" definition, as would virtually any other interpretation.
Hi nano
From RNS 5th Nov
"Formal Sale Process as Part of Strategic Review
In its preliminary results announcement on 16 October 2019, the Board of Nanoco Group PLC ("Nanoco" or the "Company") (LSE: NANO) reiterated its focus on maximising value for shareholders. In this context, the Company confirms that it has entered into preliminary discussions with certain parties about a potential sale of the Company. Accordingly, the Company today announces that it is undertaking a review of all the strategic options for the Company, including, but not limited to, a potential sale of the Company through the commencement of a "formal sale process", as referred to in Note 2 on Rule 2.6 of the Code."
ie For Sale since 5th Nov but already "discussions with certain parties about a potential sale of the Company."
BoL
We know that the decision to make a sale offer was based on agreed commitment to shareholders’ best interests - presumably those doing most of the funding over the years. Sale motivation might make sense if an suggested offer had already been put to Nanoco, pre-sale, and the main funders saw some value in this - rather than sale just about having doubts for the future. Apart from that, listening to Blackberry CEO it seems in the tech world lots of firms are working together - connecting here and there - and not just always competing. Speculation, of course.
Was wondering if anyone was managing to take advantage of these 5% + swings ?
Maybe too risky and don't have enough spare cash myself.
I could not agree more...that was yesterday this is today oh and by the way the market is forward looking, again I hope I am wrong and that NANO go for stupid money and make us all rich....but I will be shocked if its over 20p and see 30-40% premium max. on todays price, (that's f its sold) as I said the market is forward looking and we are sitting at circa 12p says it all really.
Never been any inkling of sale in the years I've held, until the 'Guy fawkes' RNS.
TLW
Indeed, and that was precisely my point - I don't understand the logic that any new bids would at least match anything previous when the company is in a much less promising position than it almost ever has been. For what it's worth, I hope I'm completely wrong and we all make a fortune.
Personally my recollection of bids/offers prior to the formal sale process announcement is different and NigeW himself admits its from "memory".
Had this been the case I'm sure we'd have made reference to it repeatedly.
warren1907.
There are a number of articles from seven years ago, when Nanoco's share price was rising rapidly. These state that major companies were set on adopting Nanoco's technology in their products, with a significant increase to Nanoco's revenues. There may have been some M&A interest shown at the time but I can find no reference to this.
From an article dated 23 January, 2013:
" A case in point is Nanoco which yesterday rocketed more than 21 per cent, or 23.5p, to 133.25p after announcing a transformational global licensing agreement with Dow Electronic Materials, a business unit of Dow Chemicals.
Nanoco, which was spun out of research pursued at Manchester University, has signed a deal which gives Dow exclusive worldwide rights for the manufacture, marketing and sale of Nanoco’s cadmium-free quantum dots for use in electronic displays.
Nanoco has developed a new form of light-emitting crystals, known as quantum dots, which can be used to produce ultra-thin televisions.
Liberum Capital lifted its target price to 260p from 160p on news of the deal.The broker regards the high royalty bearing agreement as a game changer for Nanoco.
Major potential customers like Samsung and LG are likely to move much faster in adopting Nanoco’s quantum dot technology in their displays. It forecasts revenues of £7.8m in 2014, rising to £140m in 2017.
Entrepreneur Richard Griffiths’ Ora Capital sits on 18.8 per cent of Nanoco and also owns 28 per cent of Ceres Power, 0.1p easier at 8.85p. Along with 29.9 per cent holder IP2IPO, it helped rescue the clean technology group in November when it piled in for stock at a penny a pop in a £3.3m fund-raising. They are already looking at a nice paper profit on their investment but there apparently is a lot more to come. They are confident that the company which was spun out of Imperial College in 2011 and floated on AIM in 2009, is over the worst and is destined for greater things.
New management was brought in at the time of the fund-raising and the decision was made to switch from developing fuel cell boilers for the UK domestic market to licensing its technology. "
How times, and Nanoco's valuation have changed since then. I know have a clearer idea as to why some long term holders of Nanoco stock have a higher valuation of a potential bid-process price than my own. Regards.
Nige W - thanks for the response and good luck.
TLW - I was referring more to more than one alleged bid in a period before the company was formally put up for sale, which I believe Nige's original point
Nige_W, warren1907.
From the RNS issued by Nanoco on December 20, confirming the interest shown in the bid-process by more than one party. The document is carefully worded so as not to give shareholders any significant new information.
"Update on Formal Sale Process
On 5 November 2019, Nanoco announced that it was undertaking a review of all the strategic options for the Company, including, but not limited to, a potential sale of the Company through a formal sale process, as referred to in Note 2 on Rule 6 of the City Code on Takeovers and Mergers (the "Code").
The Company confirms that it has engaged with multiple interested parties as part of the formal sale process. Potential buyers wishing to participate in the formal sale process were required to sign a non-disclosure agreement, after which they received further information on the Company. A number of interested parties have submitted non-binding proposals to Evercore, for the Board's consideration. The Board has reviewed the proposals and is now inviting certain of those parties to engage in further due diligence and detailed discussions about the sale of the Company."
Hi Warren
This is simply from memory, imagine it was in a RNS some time ago, (can anyone confirm?)
Nano doesn't need to sell and has had no problems raising capital in the past. Now they have some revenue (while raising money previously with no income), and main backer Loam still there.
As I said the price will depend on the value of the Ip. Not only that Samsung might want to deny the Chinese CFQD's to decrease competition, and / or eliminate risk of copyright infringement and / or dominate the world in nano tech.
Much the same applies to Apple, but they also invested £20 m + in the nano factory which they won't want to see taken over by Chinese, Samsung or anyone else.
Also, all the interested companies have seen nano patents so have a pretty good idea what they are bidding for, so I don't think Ip is worthless.
Nothing like sxx takeover and I remain optimistic.
BoL
Nige W
Where did you get the information that 2 or more offers were previously made? Forgive my ignorance, I've never become aware of this. And, if true, why do you think the price would be higher now when the company wants (and needs) to sell than it would have been at a time when the company had no need to, and presumably a significant revenue stream or strong promise of?
2 (or more) offers were made for nano before they were even up for sale. Imho these offers must have been considerably more than the Sp (guesstimate 50 +), and either they are still on the table or have been increased since.
Other than that Sp is totally meaningless - it all depends on how the bidders value the Ip.
After due diligence, the initial offers could be withdrawn as everybody realises Ip worthless, or Offer of $1Bn +, if it is the bees knees, infers Sp of 5 to 300+.
Not very helpful, so just have to wait and see. I don't expect any news until Deal done, and hope we don't hear anything until then, cos don't want to be tempted into selling any.
jplay......are you being an optimist or am I dreaming?