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Alwaysone
My theory is that if private investors like us tender at £2.50 we will get 100% filled.
This is on the basis that none ( or very few) of the Institutional investors ( 70% ) or management and connected (10%) will sell at the tender offer leaving just c20% of shares available for tender .
So if 70% apply of this cohort, then they will be filled 100%.
70% is a big ask imho given the sum of the parts valuation of Puretech is conservatively over £4/5.
That is why I feel management got greedy and tried to strip out weak holders on the cheap thereby increasing the % holding of those who shareholders who refuse the offer.
Don’t forget. It might only be 14% of your holdings at £2.50. Then hope this profit isn’t eaten into by a drop below £2.20 on the balance of shares.
I do believe the offer has put a floor of £2.10 on the price though, for the short term at least.
Lesley
I have been having good conversations with Kana in Puretech Investor Relations until I vehemently criticised the Tender at £2.50.
I have received no response and appear to be on the naughty boys list.
Childish.
On Wednesday i very politely got in touch with DZ and expressed my opinion re 2 50 tender offer.In my opinion it was a kick in the teeth for long term investors and i was disappointed Thats all i said.Result? Blocked by DZ.Bit churlish i thought
I now , humbly, confess that I know diddly squat about the Stock Markets after 50 years as Puretech's share price drops to 212 p today...38p below Tender price
Bizarre.
Good challenge.
I like this board. Informed, knowledgable, balanced and respectful.
Can I persuade a few of you to buy into my other invested Co's and bring some sanity (and intellect) to their boards which are badly in need!? ;-)
I think that some of the posts here are a bit unfair to Ms Zohar. Yes I agree she has made some mistakes but personally I think the only mistake she has made is to give in to pressure from the likes of Invesco and agree to sell royalties, hive off more in house drugs into separate entities and do buybacks to try and boost the share price in the short term. Cash piles are simply not appreciated in the current market. Her original strategy was to use the hub and spoke model to fund the in house jewels and actually this has gone very well. Most of the duds referred to are still trading and haven’t lost Puretech any money and to call the in house drugs early stage is not correct - we have a number of stage 1 and stage 2 drugs as well as platforms that will keep generating more candidates. There is immense hidden value here that will come out in the next few years and the last thing I want is a take over.
Biginersguide - That's exactly what it is. A share by back programme at a small premium to the SP aimed at taking out the RI base. Nothing more.
As Dallo & Malt suggest, change at the top required.
Thanks dallo and malt.
You may well be right and an outright bid could be the outcome. The reaction so far has been underwhelming and it does seem to show inexperience on the part of Ms Zohar. Now I am in I intend to stay the course. You may well be correct about the other spun off companies but I suspect one or more could well ultimately be successful and it only needs one at a time!
Malt
Great Post
My views entirely as Puretech as a developer of drug programs farms out the risk through the hub and spoke model and its track record is one mega success ,Karuna and loads of duds with Vedanta possibly going to be a winner .
So Karuna has garnered $1 billion from Karuna including the upcoming c$300m from the BMS takeover and Puretech and royalties of $400m from
Royalty Pharma plus future additional Royalties milestone payments and sub licensing income.
The rest of its founded entities are utter failures apart from perhaps Vedanta who may come good.
It's own drug therapies are interesting but still at a relatively early stage .
The market in the US and the UK hate companies that act like fund managers and that is why they assign a risk premium to these unusual entities
There is no guarantee that Zohar will not exhaust cash resources over the coming years on the in house drugs so that is why the strategy needs to change and only a takeover will clear out the spoke entities and concentrate on the primary business and stop Zohar from acting like a Pharma fund manager in high risk drug development companies.
I keep thinking of the $13 billion she left on the table in Karuna.
The perils of appointing a child of the founder of a company to run the business.
Anyone see Succession the great TV series.
Anyway Puretech still is totally undervalued but needs new management and a focused strategy.
This will happen soon imho
I have been a shareholder here since 2020 and it has always looked great value, others have clearly been holders a lot longer than that. We all will have read many posts trying to fathom why the mkt cap seems so much lower than the sum of the parts, particularly when a large part is cash, but nothing seems to change . It is difficult not to doubt whether this hub and spoke business model is wanted, surely professional biotech investors can get the risk diversification they want by investing in a portfolio of pure play biotechs eg Karuna et al and don't need or value the risk mitigation claimed for the PRTC model. This leaves PRTC looking similar to an Investment Trust with a highly concentrated portfolio of assets at different stages ,perhaps like a Syncona or RTW, which also trade at massive discounts. Maybe they should dump hub and spoke and change into a conventional biotech retaining ownership of assets through to market, is there a hint of this happening as they have held onto LYT100?
Soundman
Mystifying drop today as there is a clear arbitrage opportunity to buy at £2.20 and tender the same amount for a 30p gain.
However it is never that simple in the markets so what's the story .Is the SP being manipulated downwards to bolster the take-up in the Tender or is the market not impressed by the management's lack of daring and ambition.
A more aggressive management would back itself to use surplus funds to drive growth through a large acquisition for instance rather than buy back its own shares which have underperformed for 10 years.
Zohar boasts of taking $1 billion out of its small investment in Karuna having developed KarXT the schizophrenia drug but forgets to mention it had left $13 billion on the table.
I think the market is not convinced of Zohar's strategy and skills and I think the 70% Institutional investors particularly Invesco with 24% of the shares will exert pressure after the Tender is completed.
Just returning cash to shareholders at a low SP is an admission by management that it hasn't any ideas to drive growth using the large surplus funds and is content to plod along hoping Vedanta and its own drug therapies come good in a few years
Hence I feel a takeover is the logical conclusion and maybe we may see this sooner rather than later.
I still feel the cash , royalties and other significant assets are worth north of £1.5billion.
I see this tender offer as just another Share Buy back under another name. They are reducing
The number of shares by $100m possibly in a very short period, Not from the open market but from investors.
Does sound like a cunning plan.If as i would guess they do drop post tender
So why so many sells today between 217 and 220, and a share price drop of 2.25%?
I don't understand why people wouldn't apply for the tender offer other than for tax reasons.
Surely you just sell at £2.50 and buy them back for cheaper. What am I missing?
Or do people think the SP will be above £2.50 by the time you get your hands on the tender proceeds?
Hi Red
I see your angle now, you're basing it on 100% of holders wanting to tender, so therefore they'll only get 14%.
Where as I think they'll be lucky to get 14% tendering so they could have 100% each in my view.
The Tender Offer is a clever ploy by Zohar ...but too clever by half .
With just a free float of c20% ( Institutional investors own 70% and management/ Directors/ connected parties own c10%), this Tender is aimed at the free floaters who , in the unlikely event of them all tendering and with no Institutional or investors likely to tender any shares , this would reduce the free float to c6% and increase the % holding of the remaining investors ( mainly Institutional and management) by 11.6% .
While I hope the free floaters are not that stupid it is obviously what the company is targeting at a low ball price.
I told the company that a Tender Offer of £3 may dislodge the wavering shareholders but at £2.50 there is little chance of that happening.
Too smart indeed but not fooling everyone , I hope.
With more big payouts to come and even a possible takeover, management just got too greedy.
I am not tendering my shares for what it is worth.
Hi soundman , I think you have a miss understanding.
For example if everyone puts their shares in to sell at £2.50, how will the company pay ?
The company has capped the offer to 14% (£100m), thus more than 14% of shareholders ask for redemption , you will get scaled back.
This is on the assumption you can even ask to redeem your full holding, the offering doc may limit it to 14%…
I hope enough people tender to use up the full $100m, I'd prefer that, rather than a part of the amount being paid out as a dividend
You will be able to tender has many as you have
If it’s oversubscribed you will not get your full amount
It won’t be at this price lol 😂
Red - As I said yesterday, I don't think you're limited to applying for 14%, I think you can tender 100% if you like.
The only mention I can see of 14% in the RNS is...
'The capital return of $100 million represents approximately 14% of PureTech's market capitalization based on yesterday's closing price.'
Yes , without doubt if you sell a stellar asset for 14bn and even then , shareholders only get a 30p dividend on 14% of their holdings … something is very wrong. You would be mad to hold this share for returns as a PI , what needs to happen for you to make a return ? Given they have no dividend yield and do not pay out when they make a blockbuster deal?
Dallo - I expect the response you will get from Zohar (if you get one at all), is they're giving shorter term shareholders a route out to the ultimate benefit of long term holders.
Yep. Definitely a strategy to get rid of short term retail from the register hoping they'll take a small percentage fast buck and move on.
I think I'll keep every share I've got and see where we end up.