I think the Oonex deal was approved by the National Bank of Belgium in July 2023
https://www.equalsplc.com/content/news/archive/2023/050723a
This acquisition is strategic for Equals expansion into Europe and its long term growth prospects. Grapping market share as quickly as possible would require deep pockets and this could be reason for selling up to a bigger organisation. Perhaps, they are waiting to see how the potential of the early pilots into Europe using Oonex licences are going.
As an investor it is always best to zoom out. I think 6 months ago everyone would be happy with the price we are currently. Sentiment drives the short term moves between results and share prices go too hight with positive news and too low with negative news. The overall outlook for HVO is positive, it has a moat ( not common for small caps), good business model, generates significant cash flows, operational geared, possibility of growing dividend and is sitting on a large cash pile. IIs sitting on the sidelines, hoping to build a position must being enjoying the negative sentiment coming from PIs as it will provide an opportunity for cheap shares. I'm not sure how low it goes but I picked a few more up today at 26.04p. Happy to take the long term view as I believe this will be a nice income generator with a prospect of it being taken over at multiples of today's price.
The RNS said "not less than 14,000,000 ordinary shares" hence it was a minimum of 14m shares to be sold. CF has other ventures that he wants to invest in, POLB for instance and I think he is involved in another in the resource sector. CF is still a large shareholder but wanted to diversify. Unlike PIs like ourselves he is limited when he can sell and cannot drip feed into the market without tanking the price and raising major concerns. HVO is a major holding for me and I am not concerned. The major risk for me is that the company will be taken over on the cheap. There is now an opportunity to get in at a price less than the IIs which long term is good value.
I wouldn't read anything into the latest dip, just bored PIs/speculators offloading and deploying their capital elsewhere as this has been dragging on for several months. Many long term holders including me will be happy to wait the outcome. Either we get taken out at a reasonable premium OR my preferred option is that we stay independent and grow the business.
SAVE is mentioned by Gervais Williams of Premier Milton Group just before 7 minutes. Interesting to see II view on SAVE. Good risk/reward and expects to pay dividend longer term. Part of larger portfolio so obviously not material to them. Slight write down of SAVE in his fund due to fund processes/ (evaluates on news)/drop on oil price but as we all know all depends on any deals done. It didn't help that the interviewer got the name wrong and called it Savannah Resources. Anyway, worth a few minutes listening to it.
https://www.investorschronicle.co.uk/podcasts/2024/02/06/i-always-feel-it-is-a-bit-disappointing-to-buyback-shares-gervais-williams-of-premier-miton-group/
BTW although I don't post often I read the board frequently and thus appreciate the insights/analysis from the core contributors.
This is my largest of my top 3 holdings and one of the others, Equals is in takeover discussions. I would prefer hVIVO to remain independent for a few more years as it should be able to grow its profitability rapidly, pay a increasing dividend with corresponding shareprice appreciation. This is because it is operational geared. Say for example it only needs its facilities to be used for trials 50-60% of the time to cover rent, staff expenses etc, then the majority of revenues (60=70% - the rest to cover specific cost for trial not covered by overheads) from additional trials will flow to the bottom line. Hence, it only takes small revenue increases to amplify profitability. hVIVO is unusual for a small company in that it is a leader in Human Challenges Studies with limited competition and hence pricing power ( this will also boost profitability). It has a moat as it will take time and investment for others to build up the range of challenge model and expertise. Until recently it was a story stock but I suspect its return to profitability will have got the attention of fund managers and bidders alike. Like Equals it is operational geared and many don't appreciate this effect. Anyway, good to see the shareprice rising but I don't want to see it taken out cheaply
Another extension to the 24th of January
https://www.londonstockexchange.com/news-article/EQLS/strategic-review-update-and-pusu-extension/16266973
Paul Hill has been an investor in Equals for several years now and it is one of his largest positions. He knows his stuff and has interviewed IST numerous times over the past few years. A vote of confidence for me was the addition of Richard Cooper as CFO (previous CFO of GVC). Richard has M&A experience and coming to Equals given its size meant that he must have believed he could help grow it substantially. Definitely, going in the right direction but given the potential in Europe this is only the start. It now my top holding so I am biased. DYOR
TL thanks for this, definitely worth a listen. I have been following Dr Anas Alhajji on Twitter for several years and he is a class act with great insight into the energy markets. He is one of the reasons I am so bullish on SAVE as oil and gas isn't going away any time soon despite what the green targets are.
I am saying a large Pharma Service provider ( hVIVO is such a company but provides a fairly narrow range of services) who only provide services and don't develop drugs/Vaccines themselves so there would be no conflict of interest.
SGS certainly be interest in acquiring hVIVO
I don't think we will attract any long term sticky institutional buyers until we demonstrate a track record of steady profit growth. Secondly many will not invest at our low market cap of £110m and lack of liquidity to build a meaningful stake.
Many of the previous institutional buyers in hVIVO were short term as they invested at equity raises and flipped their shares shortly after for a quick buck.
Personal I think the exit will be a takeover given the attractions of hVIVO
1. Moat with largest number of Challenge Models with a reputation and track record for delivering results
2. Growing revenue and profits
3. Market growing as Pharma wake up to Cost/Benefits of doing Human Challenge studies
4. Valuable data from legacy Human Challenge studies carried out
5. Growing cash pile
6. Experienced management and technical team
7. Options for a few spinouts but not convinced this is material
I get revenue in the range of £97.75m and £104.25m but even that seems undemanding given the potential in Europe
For calculations see https://twitter.com/sharetell/status/1658476785259147267
This is a large position for me so I am clearly biased so DYOR