Member Info for emptyend

I am indeed critical of the recent issue. Not hugely critical, but a bit critical.

1) Where would you have priced the issue?

Previous issues have been made at modest discounts. The reported discount in this case was, in my opinion, too large. Issue prices are set to fit demand and typically there would be key investors who set the price. In Scancell’s case, Redmile and Vulpes views aren’t all that important, because their positions are such that the precise price makes no difference to their situation. They are not the price-setters in this case.

The FD has subscribed for shares at the placing price. That is fine, but he isn’t (or definitely shouldn’t be!) the price driver. So the answer to the pricing should lie totally in the identity of the funds who took the other £6mn worth of placing shares. In my opinion, the pricing is only justifiable if those shares went substantially to two or three funds of strategic importance in the sector…..who can then be expected to build significantly on their initial position. But, unfortunately, we have no visibility on that.

2) Any major successful Issues you been instrumental in providing the underwriting facilities?

My experience was in debt. The largest issue I played a material role in was $1.8bn. The biggest I had sole responsibility for was DM400mn.

But I have also been on the Board of a company that did several placings, including taking a cornerstone investor (ie in the Redmile role). and have seen the pricing tensions from that side too.

Panmure should be careful. Those with underwriting experience (like me) know full well that if you price something too cheaply then you can engineer both an over-subscription and after-market price performance, They had better not make a habit of it - and I hope that they built a very high-quality book (present company excepted, obviously 😉) with some strategic value going forward.

Dragon,

Calculus (ironically) don’t make any such calculation at all.

Their holdings are spread across a number of sub-funds, all of which mature in different years. Maturing funds trigger a need for the holdings in the fund to be turned into cash before (guessing) year end. It is as simple as that.

It will be interesting - now that the putative reason for buyers’ caution has been dealt with - to see what people do. Will there be people who still want a stake and who need to bid the market up to get it? I suspect there will, given the high probability of news in the remaining weeks of 2024 concerning the first Genmab deal. If positions aren’t taken soon, then interested parties may be left standing when the Q1 news arrives.

Thanks for posting that, Cleanerworld. This is quite an important external comment, in my view. It would be nice if some of the year-end analyst reports, the MSM and tipsters picked up on it. And it would also be nice is some unanticipated deals followed - as well as a Genmab milestone payment.

Fine words are a good thing - but hard cash doesn’t lie.

Drivel

Matt,

What total tosh.

I’ve said I wasn’t happy with the pricing, but there appears to be a partial explanation that is not unreasonable.

You seem to think the personnel changes have made no difference at all and are continuing to complain persistently about communications (in a manner which suggests a lack of knowledge about the constraints on director statements and RNSs - as well as the processes by which company news generally becomes public).

If you don’t like it, and view the sharees as a “long term dog” for you, I have no idea why you are still a shareholder. There have been opportunities to sell at twice the current price.

I’m much more interested in the company making timely progress (which is always a challenge, as things rarely happen quickly enough for shareholders) and converting the science into cash and the opportunity to make more cash. If they do that, then the share price will take care of itself and (as if by magic) shareholders will be delighted by the company’s comms, despite their approach not having changed at all.

😂

Matt,

You say “ They have proven year on year that they can't communicate, or show any desire to communicate with PI's.”

I should just point out that virtually all the personnel responsible for communications with investors have changed over the last five years. I’d suggest to you that more of the comms fault lies with the people who are supposed to be listening, rather than those who are speaking. Many of those haven’t changed - they have perplexingly sat here complaining year after year……and yet they still have the shares. If you don’t like what you are hearing, then sell.

Personally I think there WERE weaknesses in Scancell’s management line-up. But those have all been addressed by the upgrades to staff over the last couple of years. And I note that miavoce seems to have confirmed my guesswork of late yesterday that the Genmab news was unexpectedly dropped into a pre-agreed and pre-priced modest raise.

….another LSE quirk there, cutting off the end of my post and, puzzlingly, removing all the capitalisation 🤔🤨

To finish……I’d personally put in for about 2.5x the number of shares I’d hope to end up with. I doubt that would be too far out if you want to maintain your stake.

as i indicated earlier, i was unimpressed by the large discount. and others have suggested that the price was pumped up before the placing. and that the placing had been known about for some while.

i’ve considered this today and think, in retrospect, that the discount reported (and the timing of the first rns about genmab) was basically an accident.

some years ago, i was involved on the board or a company doing a placing. as i recall it, the price had been pre-agreed with a cornerstone investor several days before the placing but the market (spreading rumours of an imminent placing) sold off before the placing was announced - with the result that the placing price actually turned out to be at a premium to the price trading shortly before the announcement.

i think what happened here is the opposite. i think that some of the new investors (and winterflood as broker) decided early this week that they would be happy to invest at 10.5p and the timeline was set for an announcement on wednesday night (or perhaps first thing thursday) and that the board accepted that plan on tuesday. that would enable the funding (including the important retail element) to be done and closed before the market began to shut down for christmas.

the unexpected surprise element may have been the genmab deal, which had to be released into the middle of this plan (presumably the company was advised by genmab late on tuesday)….thus causing the price to rise and inflating the apparent discount from approximately 10% - and annoying those who had invested on the back of the genmab deal.

that is all guesswork, but i think it is really the only likely explanation: the investors were lined up at a fixed price and the market move higher hadn’t been expected. and they probably couldn’t have delayed the issue without losing the investors who had been lined up.

so the whole thing looks to have been partly ****-up and partly accident. but when push comes to shove, a placing price for that number of shares at 10.5p or 11.5p is neither here nor there in the big picture - especially for those like redmile, vulpes and probably a number of private investors who have (or will) stood their corner.

the board plainly considered it was better to press ahead rather than to take the risk of pulling the whole thing and allowing the new investors to walk. that would probably have damaged sentiment more - and would have made it difficult to come back to market in early 2025.

ultimately, if you put in for the open offer and aren’t diluted, then you are no worse off. i will personally be slightly worse off, because i won’t be putting in for the open offer - but not by much in the great scheme of things, because i topped up my holdings mid-year by about 8%, at around 9.3p.

i’d guess the.retail open offer will be oversubscribed, but not by such a large extent that you couldn’t maintain your stake by correctly guessing the likely extent of the scaleback. i’d pers

Https://www.investegate.co.uk/announcement/rns/scancell-holdings--sclp/result-of-placing-and-subscription-/8593186

….only surprise is that Sath not Phil was the subscriber. Vulpes and Redmile stood their corner.

I still don’t understand why the issue discount was so large - it simply wasn’t necessary!

You have no idea how many shares you will get in the Open Offer - that is why. And the higher the price moves about the OO price, the fewer shares you will get.

I’d guess the placing figures will be RNS’d in early afternoon?

It is an Open Offer, not a rights issue of any sort. The only qualification is that you are an existing holder. You can apply for £1mn if you like…..but obviously won’t get them. Apply for any number you like.

Having “plenty of funding operations available” does not mean you just ignore the one that is the easiest and quickest to execute……

And raising a fairly small amount doesn’t mean there will be a noticeable adverse impact in the medium/longer term. Short term, of course, it is a pain in the bum - except for those who now get a(nother) chance to buy cheaply.

Well you can join Inan, Crusty……its all about the number you hold, apparently, so he bought several times in the 13-14p range.

I don’t think there will be material amounts of shares “flooding the market” - and I think there will be a strong price rise into year end. As regards “Genmab1” milestones, I don’t think there are any necessary implications one way or the other - it is just that they have limited time to get the placing done after yesterday’s news and before Christmas (and the next news).

On the “why now” question, they wouldn’t have known for certain how much they needed to raise until the point when Genmab exercised their option……and the need for a raise would be driven by accounting (avoiding a qualification re going concern if they had less than a year’s cash) and, more importantly, strengthening their negotiating hand for the registration trial.

So I understand why they are raising money. What I don’t understand is the discount being offered….or the price. But we’ll see the outcome…..

I’ll also add that they raised more money a year ago at 11p ….and at half the discount.

I’m underwhelmed, especially after the AGM mood music. The market may be poor at present, given geopolitics etc, but I really don’t think it is as bad as the pricing suggests.

“could only get 8”

That comment won’t age well. They haven’t closed yet and it could be significantly upsized. I don’t expect that…..but I suspect it will be substantially over-subscribed. I’m frankly surprised that they have announced a small raise at a big discount - it smacks of being overly-accommodating to the Subscriber on the Board……who I assume is Phil.

I don’t think this is a smart move - and if I’d bought recently at higher levels I would be quite annoyed by it.

Troajan,

That is an interesting piece, mainly because it sets today’s news in a wider context. That is NOT normally what Proactive do…..they usually just report the deal news.

I conclude that further news is likely soon and that the PR ramp-up into the trial results may have started……