Bioquell Share Discussion Threads

[pavey ark] 27/6/2016 09:27

My share account is still blocked with no indication of shares sold in the tender.
I have no intention of selling my remaining shares but this could be the push required to change my broker.

I have other accounts with a different broker but all my BQE shares are with Alliance Trust.

(I'm a bit slow to act here because the Corporate Actions dept were very good about a problem with the tendering of shares I held for a third party but I have noted that Alliance Trust are increasing their charges and wonder if the service is good enough)

Do other people have this tender information ?

[pavey ark] 22/6/2016 13:37

I read Simon Thompson's articles in the IC but I didn't know that he follows my posts here.

Joking aside ST has just updated his coverage of BQE and is even more upbeat than me but to be fair he does have a bit of an inside track at times.

Long and short of fairly lengthy update is that he recommends that you take your cash from the share buy-back and buy more shares.

[cockerhoop] 22/6/2016 11:04

To clarify individual brokers will only get 50% of the total holding of it's customers but say a broker has 10 nominee investors with equal holdings in BQE, 9 opt to tender 100% and the 10th is away holiday or forgot to tender. Because the brokers 50% allocation is covered by the 9 wanting 100% the 10th's allocation is shared amongst the 9.

[18bt] 22/6/2016 10:36

It is somewhat weird that individual brokers can put in place arrangements to tender what other clients don't. But that's what happened to me and that probably explains the 47% take-up as I'd normally expect the "no shows" to be 5-10%.

[hornets89] 22/6/2016 10:13

I have asked my broker to clarify exactly how many shares I was able to get through too as my entire holding is still blocked. Does anyone have any idea when it will all be complete?

[cockerhoop] 22/6/2016 09:24

Pldazzle,

I have had 54% of my holding tendered - FACT.

As I explained the process above with regard to nominee accounts. I have 46% of my holding back in my account.

It will be different depending on the take up within each nominee broker.

[pldazzle] 22/6/2016 09:19

Sadly, there was no excess provision enabling peeps to tender more than 50% of their holding. Read the document again:

Anyone who thinks they've tendered more than 50% will be in for a disappointment when the cheque arrives.
That's why only 47% were tendered - the missing 3% can be attributed to people who lose documents, don't read them, had died, were off sick, or weren't thinking.

[cockerhoop] 22/6/2016 08:48

Actually just checked and I got 54% of my holding tendered.

[cockerhoop] 22/6/2016 08:44

It'll be interesting, possibility that if held in nominee accounts you may be able to get a higher than 50% tender if other holders with your broker failed to tender or tendered less than 100%.

[18bt] 22/6/2016 08:33

Bit odd that only 47% of share cap. tendered. I tendered all mine, so looks like I can buy in at a much lower price now.

[bountyhunter] 17/6/2016 09:24

It's a bit confusing and details may vary depending on broker. I made my election a while ago so it will not affect me.

[nw1234] 17/6/2016 09:18

1 p.m. Monday 20th is the Tender form deadline (your nominee, if used, will have an earlier one, e.g. HL is 12 noon today). Proxy is for voting, not for the tender. Good luck.

[bountyhunter] 17/6/2016 09:05

"Latest time and date for receipt of Forms of Proxy 12.00 p.m. on 16 June 2016"

Presumably shares are worth less today as from the above it appears to be no longer possible for holders from today to get the £2/share for half of their holding...

[bountyhunter] 05/6/2016 12:33

Thanks for posting your analysis PA. I will also be happy with £2 for half and to hold the remainder.

Since the timetable is pretty tight I have posted the latest on the tender offer and proposed timetable (and link) at the end of the header.

[pavey ark] 05/6/2016 09:42

Much number crunching this morning as I tried to figure out if the current price is fair or a bit of an anomaly.

Obviously the £2 return is good and adds to the cash pile I prefer at this time of year (sell in May and all that)but if you bought at c. 170p you would be paying 140p for the retained half of your purchase and this would value the company at just shy of £30m.

Ignoring property and equipment but including current cash and inventory I get close to £10m for current assets.
( I don't usually include inventory in these calculation but we are up for sale and the value is such a small percentage of total t/o that it is unlikely to be "dead stock".I am assuming an slight increase in cash from profits in H1 )

If one simply looks at previous year(s) then the figures don't look great but the biggest single factor in valuing this company is the t/o , gross profit and admin costs.

Although the profit last year was under £1m the sales and admin costs alone came to £9m with £1.5m in R and D.
NB gross profit of over £11m.

If we look on the sunny side and assume that things are improving, albeit not at a great pace, this trading improvement is likely to be overshadowed by cost reductions.

If no bid is forthcoming then the savings made by the company and subsequent profit level will determine the share price but while BQE is still up for sale we must consider the cost savings that an acquiring company could achieve and therefore be prepared to pay.

As I have said before, there's obviously not a long line of companies clamouring for BQE but perhaps they are in a narrow field.

My figures suggest to me that even without a bid there is value here after the buy back.
The bid prospects look to be in for free but my average price is c. 150p so happy with £2 for half and happy to hold remainder.

Final thought, the company has said that any bid would likely be less than £2.
If someone paid £2 they would be paying £42.7m so less might bring us in at less than £40m.
If my current asset value is anything like accurate then the acquiring company is hardly straining to justify the purchase price given the cost saving that are up for grabs but this being said there has been no offer,so back to square one ?

[bountyhunter] 10/5/2016 08:45

header updated with tender offer news for reference; presumably a reference date for eligibility will be stipulated at some point as there is no mention of such a date in the announcement?

[pavey ark] 09/5/2016 15:29

EC had your previous post contained anything like the detail of your subsequent post ( which still lacked detail) I doubt if I would have taken serious issue with it.
Language like "ragbag" does justify my "glib dismissal" of a very glib post.
Even now you have given no hard figures but that doesn't matter as you have now sold.
A bit strange to sell at today's price when you could get 200p for half your holding and still be holding shares at a value less than your rather conservative valuation.
( I say conservative purely based on the one figure given in your first post ie a PE of 8).
Obviously investment decisions are up to the individual and we all make good ones and bad ones but any decision to sell here in the current situation must be a close run thing so perhaps it is a comfort to post the perceived negatives to reassure ones self after the decision is taken.
You do realise that you are valuing the company,post buy back,at £37.8m.
As there is a very real chance the cash is over £7m after H1 and taking into account all current assets and liabilities then
We could easily have a figure of £30m for the EV. inventory, property and equipment are almost £8.5m so a buyer is paying c. £22m for the business.
This business is generating a gross profit of £11.5m !!!
I agree that business is not booming but there is a lot going on and the figures I've given make the current share price a very strong buy in my book especially when you can sell half for 200p.
However, each to his own.
I have been wrong before but these figures and the current buy back situation make good reading.

On a more general note I don't think there is a long line of potential bidders or they would have stepped up by now but given the current financial status of the company it could be that management are playing hardball and pushing for a top price.

[effortless cool] 09/5/2016 12:31

Pavey Ark,

Thank you for your glib dismissal of my analysis, which involves a full, reconciled projection of every line of the financial statements. Thus, whilst my forecasts may well be wrong, they are anything but superficial. Note in particular that I have made allowance for reduced R&D costs and other potential expense savings.

I agree with you that the business has surplus cash and is likely to generate significant positive cash flow over the next few periods (excluding the outflow from the tender). However, is it a business that I would want to invest in? Its core HPV technology seems to have declining marketability and, in spite of the sizeable R&D spend, its replacement products have been slow to pick up the slack. Revenue from the continuing business was £27.9m in 2013, £27.3m in 2014 and £26.9m in 2015 - hardly an inspiring trend.

All in all, I have come to the conclusion that this is a business that is going nowhere. Yes, it should be able to squeeze some value out in its cash profits for a few years, but its top line is under threat and it is far from clear that management has the answers. Accordingly, I sold this morning, but will watch developments with interest.

[pavey ark] 09/5/2016 10:32

A number of brief points to be made here.
Firstly if the numbers have been "run" they've been run rather quickly and superficial.

This company has invested very heavily in R&D in the last few years and this phase is over.

BQE sold a major part of the company last year and these results don't include and revenue from this unit but obviously it takes time to rationalise staff expenses etc.
H2 saw a reduction in expenses of £1m so this and more should show in the whole of 2016.

The main point that I made was the very large T/O and substantial margins which give a gross profit of £11.5m.
BQE are reducing costs but a company with existing management costs and sales team could keep a very large chunk of this profit without even increasing T/O.


Either way we should see some developments soon and either the company will be sold for more than £2/share or I will hold shares in a very sound and profitable biotech company which has ample cash and is generating even more.

[effortless cool] 08/5/2016 22:33

Having run the numbers, this seems quite fairly priced at current levels. The BIO business is a ragbag of rather odd interests, which has delivered flat revenue over the last three years. Prospects seem unexciting, and I find it hard to see why it would justify a PE ratio above x8.

Post the tender, the business still has excess cash. Adjusting for this, normalised tax, and options, gives me a current valuation of 177.2p, marginally in excess of the current share price.

[bountyhunter] 06/5/2016 17:25

...included a more detailed daily chart at the top of the header

[bountyhunter] 06/5/2016 15:13

added this morning, 50% will go for £2 and I'm happy to hold what's left :)

[pavey ark] 05/5/2016 20:54

ST gave a good write-up but certainly didn't over egg it.
I take it that those selling today have not looked at the results and of those who have I wonder how many got as far as note 11.

This company is generating cash at a fair old rate and as we are well into month 5 I expect the cash to be approaching £8m by the end of H1.
Inventory is worth £3.2m
Property and equipment £5.2m
T/O £27m
Gross profit £11.5m
Shares in issue 23.15m
As they say in the US "you do the math".

Further cost savings to be made and any increase in t/o would make £2 look rather silly.

Edit: still leaning to accepting £2 for half my holdings but I will not sell more than 50% even if the opportunity is presented.
Even the most basic of calculations shows that post buy-back the company is worth more than £2/share but cash return is always tempting.