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Thanks for your contribution, JSB1989. You may well be right but even if you are,it does not entirely preclude my comment.
I probably will hold on to my entire holding, which is only about 3% of the whole portfolio. There is a reasonable chance of a U.S bid if the SP stays so undervalued and that would have to be at a much higher price. You have different considerations since it is presumably a much higher % of your portfolio. All the best!
Interesting theories about the tender offer. I’m undecided on what to do on whether to allocate some shares or not and the %. It’s my biggest holding by a mile. 250p is very undervalued but it’s debating whether the market will clock onto the value.
Oldbutnowisa - I can’t see them taking many or any of the entities the full way to commercialisation alone. I’ve been reading the annual report and they have mentioned partnership scenarios if LYT-100 is successful in Q4 and moves forwards to Phase 3. Gallop will shortly follow in the footsteps of Seaport with a financing round. That won’t leave any wholly owned entities which I’m happy with as I like the model from a risk / reward perspective. Unfortunately it’s not one which the market appreciates.
One thing holding the sp back is the lack of clarity on NAV as none of the significant founded entities are listed. If Vedanta or Seaport were to list, we’d have a reference point for a valuation.
I have seen 'pundits' moaning that they make no annual profits, which is bound to discourage investors. Their model is responsible for this. They will only build up profits after the products of their inventions are in production and the terms of those contracts take effect. Under their contract terms of sale, the purchasers pay royalties to Purehealth and milestone payments. This will obviously take some years and until then, once their companies set up to invent hopefully are sold for big cash this will accrue to Purehealth but as capital. If, like me, you believe in that model, why worry about temporary lack of annual profits?
As I inferred below, I'm really afraid that their strategy is to make 250 look really attractive by somehow keeping the SP down until the close of tender, then suddenly allocating another 10-20million to it and wiping out the RI base in one swoop. I also think all the major IIs are unofficially in on it and won't tender.
Please, someone who isn't such a conspiracy theorist as me explain to me why this won't / can't happen.
I would genuinelly like to tender 20% and get 20%. I don't want to have to tender 100% in the hope of getting 20% and then lose the lot for a paltry 250.
I agree, that'll be the fear. Buying at 2.12 (prob 2.14 after costs) would seem to give a 15% return which isn't bad for a couple of months of tied up funds.
But if you only get to tender 25% and aren't PRTC 'believer'....
This is going to be taken over.
I agree the tender offer is far from adequate and i'm sure someone is eyeing this company up.
Atb to all invested.
Soundman
You could indeed be correct.
I am surprised there is no arbitrage trading going on at £2.10/2.15 in advance of the Tender probably on the concerns that applications will be scaled back if oversubscribed.
Dallo
'Having been invested here for nearly 6 years now, I am getting thoroughly disappointed at the continuing share price underperformance and I am tempted to flog my total holding in the Tender and move on.'
I strongly suspect that's the response they're hoping for...
JSB
Having been invested here for nearly 6 years now, I am getting thoroughly disappointed at the continuing share price underperformance and I am tempted to flog my total holding in the Tender and move on.
Also being blanked by Puretech's Investor Relations for criticising the low Tender has really annoyed me.
The cursory comments by the new Chairman and CEO of Zohars contribution etc smacks of a Boardroom upheaval with no adequate reason given for her departure even though she deserved to go after failing to create any shareholder value over the past 8 years.
Interesting to what are the terms of the Tender particularly the date which valid holdings are deemed eligible etc.
ATB
If I didn't know better (sorry, just split my sides laughing) I might think that the share price was being 'held down' to make the 250 tender offer more appealing to us little people. After all, every time the SP makes a bid for freedom it gets whacked on the head and dragged back to 210. I guess it's the only way they can make 250 look attractive.
I'll know that's the case when they tell us after tender close at 250 that it was oversubscribed and that they've now allocated another 10 or 20million to it to offload a lot more than the original 14% suggested.
I'm such a cynic...
Agreed Scooby. I thought that the results would lead to a sharp move to close in on the 250p mark. Now I’m hoping the outcome of the tender offer will move it there.
The new management have a tall order on their hands to change the minds of the market.
Quite appropriate - https://www.youtube.com/watch?v=hWFMB63gITQ
FTSE 250 up 1.15%. PRTC down 2.2% after a blinder yesterday.
Oh well - here's looking forward to my £2.50 tender.
Nothing particularly of note to add from the webcast. Again, the reaction of the SP is very Puretech. The tender offer will at least remove 36 million more shares and the mechanics of this should squeeze the SP.
The new CEO said he is committed to unlocking value for the company. When pressed on this, he repeated part of the presentation.
Lesley
Spot on with your comments..share price now down 13p from its early morning high.
Exasperating share indeed.
Presentation at 2pm alongside the release of the annual report. I will tune in and summarised any points additional to the RNS today.
Its Puretech remember Could be down by the end of the day😊😊😊🤣
Not likely! Especially since they have indicated they will pay any untendered as a dividend and it is obvious the NAV is close to double that. And what would you do with the money you get from the share tender? You would find it difficult to get better value than Puretech!!!
Market seems to like so far. Not really anything new here though, except cash a little higher than I thought.
$575 million in cash before the Seaport financing ($32 million) and tender offer ($100 million) so the company will have around $440 million.
I’m guessing next week we will have the information for the tender offer.
CEO Chowrira has highlighted that the market hasn’t fully recognised the value on offer.
Annual report and presentation later today which I will be watching.
The new management certainly need a better way to communicate the value held within the company. The management have said previously that the company is chronically undervalued but that hasn't improved the situation. We will know by tomorrow if they have been effective with this communication.
There are so many biotechs that are on the knees due to lack of funding and market conditions and Puretech could really exploit this in their favour. They will have almost $500 million in the bank (with more coming in by September) so why not pick up some assets or take positions in companies before sentiment in the sector turns up.
I am hoping they make the market cap disparity Vs NAV really clear tomorrow. This is something that has been lacking in the past as they don't seem to attach a specific valuation to their more embryonic projects or even ones that have been through funding rounds. If they want the SP to be where it should be, they have to really spell it out to investors!
We are all missing something Doff! When the share price was 400p (£1.1 billion valuation), they had $480 million cash. That is likely to be an additional $100 million and a pipeline which is much farther advanced. I appreciate the markets were toppy back in early 2021 when Puretech were at 400p but they have progressed a long way since then and I think that 400-500p would be a much fairer valuation.
In April 2021 the share price was over 400p and now it's just over 200p. With all the recent news I find this totally baffling, am I missing something?
I can see either a takeover coming, a structural change to the company or change in strategy very soon if the market performance doesn’t turn around soon.
Let’s assume they have $575 million (pre tender) in the bank and the market cap is $690 million. For $115 million, you are getting $400 million in KAR-XT royalty payments ($50-100 million due in the near term), 100% ownership of Gallop and LYT-100, significant stakes in Seaport and Vedanta of which Puretech’s stake is worth north of $100 million in each based on the last fundraises.
The results will be interesting to read on Thursday. Let’s see if they address the disconnect between market performance and company performance.
Everyone will be able to tender at least 14% of their holding regardless. Invesco hold 24% of the company. I don’t see them tendering any shares and I think other big holders will follow suit. If you tender all of your shares, you’ll have most of them taken for 250p.
Once 14% of the shares are off the market, the share price will move up towards that figure and possibly beyond.