Member Info for HarChris

Personally I’d be just fine if the shareholders reject it and novacyt walks away. We’ll still have learnt a lot from it, we’d know ncyt are keen to acquire their way to growth but are unwilling to overpay and I’m certain they’ll be even better deals to be had in the months and years ahead.

Whatever happens next I’d still expect the market cap to trend towards the net cash position over the coming weeks.

I guess the point I'm making is that if you are forced to accept a 0.3p placing for literally billions of shares and then six months pass and the share price is 0.19p and your cash balance has already significantly dwindled to sub £2m then you are slowly running out of realistic options. You aren't going to get another placing away so at best you enter the asset disposal stage (which Yourgene already have done with their Taiwanese subsidiary).

Basically however much potential you have means very little as you slowly exhaust all financing options and that I imagine is why novacyt are likely to acquire Yourgene for what long term holders consider a steal.

So far production and cost guidance has been reiterated which means almost definite profit/cash generation in Q1 and through to late April/early May and now very much around the B/E level. 18.65% electricity hikes were factored into the cost guidance right from the start so there's nothing unforeseen then as were cost pressures from load shedding, however all appears to be good on that front. What wasn't factored in was the weaker than expected Rand but it's best to assume that makes up for other inflationary pressures elsewhere for now.

If V starts rising across the board Ex China then we can be pretty confident of a solid year as long as guidance is met and if full optimisation of Vanchem is achieved then those margins will improve significantly in the near future.

Many, many PIs simply have a 'won't sell at a loss' mentality and will ride or die but besides those types I think almost anyone else is selling when receiving such a premium. Refinancing is proving difficulty for even the healthiest of companies so the very real threat of administration I would think will pull this over the line.

Obviously yourgene holders don't trust the board but even if you argue they are acting purely in their own self-interest then that still makes one conclude that they aren't convinced they'll ever get out with higher than the 0.522p currently being offered.

But aren't you intentionally ignoring the fact that this particular case is unique in that the delays / extension to the p1a trial is purely because the data is better than expected and it's also a very rare case in terms of a p1a trial being quite so informative? And because of that it makes 'timing' as you allude to a much bigger gamble because there is suddenly a much greater chance of something significant landing such as an early license deal or something unforeseen like an equity raise above market price to bring in HNW individuals or institutions who want a chunk of the company but don't want to be fighting it out on the open market?

It's not easy to pull off, especially in low liquidity stocks. They might have managed to get 100 million shares away around a 0.25p average but as soon as the holding RNS landed they'd have been a spike and then what, carry on accumulating on the open market? The share price would be above the buyout price relatively quick in that scenario.

Even if they'd eventually pulled off a hostile takeover for a tad less total cash than they've offered I'm not sure it would be worth all that effort. And if it failed they'd be stuck holding something like 10% of another company's shares only to have to start selling down again.

I really don't agree on that one Davand. The reason for the rise here is because a feeling had set in that nothing was going to happen until the DHSC dispute was sorted, that potentially the cash was tied up or the management team weren't comfortable with spending it until a resolution was found. Not only has that proven not to be the case but it might even suggest that they are truly confident of it going their way.

Let's not forget before yesterday novacyt was valued at £25m market cap with something like £85m in cash and £0 debt. It's still only valued at £31m market cap!

I would argue that absolutely any acquisition would have caused this same reaction.

I truly don't get the logic of assuming Fortune is going to just dump his shares now. What's the hurry? He's stated all the way down from about 10p that he considers the company undervalued, he hasn't managed to do anything about it in a short enough timeframe to keep himself in his role as CEO but he knows what will happen with either a slight improvement in operational performance or a bit of luck on the vanadium price front and in addition he's staying on, at least for the time being, to assist Craig in his role.

Surely he'd still be considered an insider for a while longer anyway so would have to report any sells?

Are you going to remind us every quarter of an hour?

How many companies are going to want to take on a loss making entity at this time and pay well beyond the market price premium novacyt has already offered? Probably only those with the foundations in place to turn Yourgene into a profit-making business. Of those interested parties how many are likely to be able to put in a takeover offer in cash? Unlikely many of them and so we're then talking the need for a financial package to be in place first which takes time...

I have no reason not to believe you that this is a steal but that's exactly what happens when the market environment turns for the worse, the cash rich buy up the cash poor on the cheap.

Hyped? Maybe three posts on here on average a day, at most. Very little on twitter, just two or three users putting stuff out there on #tgr

It's far from hyped.

Some great posts from a respected investor on Twitter yesterday which I’m sure he won’t mind me posting: https://twitter.com/bigbitenow/status/1675836195241185280?s=46&t=L7k3nxfxN_9xwjjIedxUrA

Also interesting to see Shanta is now his biggest holding.

It's quite clearly a tough environment out there for all these small cap diagnostics companies and if you run into liquidity issues at the wrong time then you can find yourself in deep trouble in the blink of an eye.

Look at the share price action in the run up to the last placing. Two months before they were still at 4p a share and then it starts to become evident that funding issues are approaching fast and having used up the £16.5m from the 2020 placing at 17p there obvious wasn't much city interest in the shares... and then we see that incredible announcement of over 1.5B shares being issued at just 0.3p a share.

I wouldn't know enough about yourgene to say specifically why this is good for novacyt but if there's a lot of overlap in the markets they are operating in, if there's a complementary suite of products then that immediately allows for streamlining and reduced competition that will help to turn what is a loss making entity into a profitable one.

Today was a wake up call for the market that I think will continue all the way towards £1 - novacyt has just bought a company for a total cash consideration not far off their own market cap and yet are still likely sitting on more than £50m cash with no debt on their books whatsoever, unheard of.

I liked how Eric responded to the question of whether he was going to sell his shares or not - ‘not at this price, no!’

I feel a little less comfortable speaking of the mutual benefit of this deal for both companies now we have Yourgene holders on here but this is the novacyt board after all... it's only natural that those sitting on paper losses are not going to want to sell if it crystallises a loss but to go against the board and reject it could really turn out badly with deal being dropped only to realise further down the road why the board backed it - after all why would novacyt pay more if the BOD and institutions agree that this is the right price?

As for novacyt the share price here is rather bullish as we see it push on again into close... how many times have we seen the share price do 100% over a couple of sessions over the past few years? Three times? Four? Maybe more? Looks like another one of those times to me.

Seeing as it's been made clear and reiterated on numerous occasions that the FSS work is inflation-proof does that mean the £750m contract is essentially £900m+ work now?

When looking at the share price chart the trajectory suggests that if anyone were to wait longer they'd probably be getting the company for 50% of the price or maybe even out of administration but it's also risky for an acquirer to wait that long and potentially either miss out or miss the opportunity if there's a turnaround story.

With the cash ncyt has this seems like the best option but would be surprised if they were gazumped by another entity.

The AIM graveyard is littered with pharma and diagnostics companies with great potential that never quite came to fruition. Let’s be honest whilst yourgene shareholders will hate crystallising losses they’ve gone from a ~£90m mcap company pre-covid to one relying on a placing at 0.3p a share to keep operating.

This deal should go through because it’s mutually beneficial for both.

And once you’ve started filtering en masse it’s important to only refer to the green boxes occasionally otherwise you’ll find the entire feed is green boxes and messages referring to how many green boxes there is.

Right no more mention of green boxes from me!

This news is great for two reasons - (i) the obvious - business activity, action, evidence of the work going on behind the scenes and a natural fit for the company but (ii) it puts to bed the claims by some that the cash is tied up because of the DHSC dispute.

If anything (ii) is a bigger deal than (i) .