BIO-GUIDE BRIEF: PROGEN’S WEDDING AGENDA
March 12th 2009 22:05
Biotech Daily
Friday February 6, 2009
Daily news on ASX-listed biotechnology companies
Friday February 6, 2009
Daily news on ASX-listed biotechnology companies
subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au
MARC SINATRA’S BIOGUIDE BRIEF: PROGEN AND AVEXA
Progen and Avexa, yesterday, both produced announcements that they hope will silence objectors to their proposed marriage.
Avexa, for its part, produced an independent report which valued its drug, apricitabine (ATC), at six to eight times the company’s current market capitalization.
While I must admit that I have not read the whole 60-page report word-for-word, one significant issue did jump out at me.
It appears that those who prepared the report have assumed that regulatory success will result in Avexa finding a partner - and a good one, at that.
The significance of this is that finding a partner is the biggest risk the market sees in ATC.
This is highlighted by the fact that despite ATC seeming assured of gaining regulatory approval, no big pharmaceutical company has pounced on it yet. Why?
Meanwhile, in its response to Cytopia’s hostile merger proposal, Progen focused its attack on the grey areas in Cytopia’s merger proposal.
More interestingly, though, Progen has announced a record date of March 9, 2009 for voting in its extraordinary general meeting to approve the Avexa merger and share buy-back to be held on March 11, 2009, while announcing a record date of February 25, 2009 in yesterday’s Appendix 3C notice, for participating in the share buy-back.
The winner of Progen’s hand in marriage, consensual or arranged, is highly likely to be determined by major shareholders who want the maximum amount of cash they can get for their shares via a buy-back.
The real advantage of the Cytopia offer is that these major shareholders are likely to get the full $1.10 for all of their shares, while with Progen’s $20 million dollar buy-back only a percentage of their shares will be bought back for $1.10.
A record date for the buy-back well in advance of the EGM will restrict, to some extent, the ability of those who want to try to take advantage of the difference between the share price and the buy-back price from getting on Progen.
Those who do buy-in after February 25 will be able to vote for the merger, but may be unaware that they have missed the record date for the buy-back.
One thing is for certain, though, Progen will have a very good idea of how many shareholders will be participating in the buy-back and what percentage of their shares will be bought back well before the EGM.
Progen fell 3.5 cents or 3.91 percent to 86 cents.
Avexa was up 0.2 cents or 2.5 percent to 8.2 cents.
Cytopia was untraded at 11 cents.
subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au
| 22 |
| Vote |
Add To: 
subscribe to this blog