Celadon Pharmaceuticals Share Discussion Threads

[boadicea] 07/8/2009 08:15

The share price action certainly seems to imply at least some minor belief in the possibility of a competing offer.
This may be no more than some punters seeing it as a low risk bet (probably by sb) with a more or less guaranteed stop, i.e. the premium over the offered price is option money rather than based on any evidence of a better deal being put together.

[boadicea] 06/8/2009 21:47

wywcu1 - A similar thought entered my head.
I suppose if institutions are not happy they might find ways of encouraging a counterbid - such as choosing from whom they might accept paper as payment for their holding in a cash/paper option. Remember that although management have committed their shares unless there is a (?)10% higher offer, that doesn't actually amount to much.

[boadicea] 06/8/2009 21:38

GWtF - While I think ALM is an interesting punt (due to the concerted stake-building by Mayfair/Jo Lewis outfit) I already have a reasonable size holding so don't want to put much of any CEL proceeds into it.
How to reinvest is a perennial problem when a large holding suddenly 'matures' in a nice way, like FRX, RTD, NSB and others before it - particularly when it is in an ISA and needs to be re-invested within a reasonable time (although no-one will commit themselves to what that time is.)
I have plenty of candidates on AIM but few of those are eligible for an ISA and I hold more than enough of RCG (one of the eligible ones) and LRL (another - and rather speculative).
I am also studiously avoiding companies without a cash cushion or at least a healthy cash flow. This does narrow the field rather drastically when looking for solid unrecognised value and rules out the likes of PFD even though in a very defensive sector.

Most of the ideas I have are gleaned from others - such as rivaldo - always worth checking out his ideas.

The ones I liked the look of included -
GBG (bs still looks healthy even when all the intangibles are discounted, also plenty of cash)
VLK (one of the cheapest around and fears of recession effects probably exaggerated).

CAR (very interesting company technologically with an excellent informative thread) and
VEC (recently tipped so lately active) -
are two more but they have already made recent advances and are pretty much up with the game although both are strong holds in my book awaiting confirmation that their prospects are being realised. The strength of these two lies much with the management credentials so one cannot expect them to be excessively cheap - It's a question of paying for quality.
I also liked the look of DIA at ~120p, but before I had got around to making a decent size position it escalated to its current 165-170 level, quite high enough for the present

I have seen many other prospective wonder-stocks mentioned but there has usually been a dubious/excessive speculative element, or perhaps a cash/balance sheet weakness that meant any significant growth would require more finance.

I'll probably end up adding some GSK and/or SN. as safe ballast!

Sorry to ramble on o/t - I am looking for ideas myself so would gladly read other's similar ramblings.

Please read this as a collection of ideas to look at (in which I generally hold a position), NOT a tip-sheet.
Now, of course, if we are not confined to ISA-able stocks, that opens up a whole new book - for another day!

[davidosh] 06/8/2009 20:41

GWtF.....I certainly feel the private investors have been let down by directors and larger holders here but fortunately there is always something that is better value at the moment to reinvest in.

I have been switching more funds into TND over the last few weeks as it looks like they have done a very good deal with ASDA and are probably on a p/e of three with directors buying heavily. MUBL came up with great results are also on a p/e of below four and the FD has been buying. LOQ and LNG are my other two net cash low rating favourites with interim results coming in next couple of weeks or so at both. They all have fairly well informed boards on ADVFN.

[wywcu1] 06/8/2009 20:13

With the MM's offering at 235 on the offer may mean that they expect a counter bid (or am I out of my brains?). Just been I.V.ed at the dentis so maybe not rational thinking.

[go with the flow] 06/8/2009 19:02

Hi everyone - just caught up with the news after a trip away - UPPOLA peachy!!!!

I fear we have been well & truly stitched with such a derisory offer but feel I should be moving on, so I have sold down 50% in order to re-invest (which is my main objective) in other opportunities. I have held CEL for a long time always having a core holding with additional dashing in & out which is why I have left half in temporarily.

I will now look at Boad's suggestion of ALM but if anyone has any other ideas then I'm open to them.

Flow

[bookworm1] 06/8/2009 18:03

Time to bag biotech bargains according to KBC Peel Hunt - who are the same advisors who are telling Celsis shareholders that it is in their interest to let Celsis be taken over by a private equity group......

The success of giants such as Glaxo in particular could spell good news for smaller biotechnology companies, argues sector sage and KBC Peel Hunt analyst Paul Cuddon, as it should encourage the large players to 'take more risks on investing in biotech'.

[dpeach] 06/8/2009 15:20

so Lloyds bought 17,000 more shares, now 10.7% so if have agreement with JLC et al then takes to 48%, hope not.

[dpeach] 06/8/2009 13:47

hopefully no.2 will take place and upset the Le Coque plan.

[boadicea] 06/8/2009 11:36

Edison's view will be one of several but I would say that is a reasonable conclusion and they would still be getting it relatively cheap in the longer term view because that is a valuation in the generally depressed market situation which we all currently have to live with.

The present offer may not be enough to shut out or at least discourage a counterbid whereas 276p probably would have been, imho. The art of the t/o game would seem to be not to start a war.

There are two aspects to this situation, two sides of the same coin so to speak -
1. It does not have much established competition so there is no other vested interest trying to protect itself ... and
2. It does not have much established competition making it an attractive investment for a new party looking to enter the field.

[dpeach] 06/8/2009 08:29

Boad, so 276p + plus would be more reasonable.

[boadicea] 04/8/2009 16:34

For recent background, here is a good flavour -


Wrt justifying a higher valuation, it's worth reading -

(You will need to register but it's free)
Note the valuation matrix on p9 which shows the current valuation to correspond to a cost of capital assumption of above 14% for an assumed terminal growth rate of 2% reached in 2014. Reducing the terminal growth rate to zero and interpolating only reduces the corresponding cost of capital to about 13%.

I conclude they have pitched the offer near the bottom of the range and need some competition to push them up. The top end of Edison's range values the company at almost £75m or about 320p.

In addition, one of the supposed reasons for going private is the lower admin/compliance and listing costs which can all be added as a bonus to the value in the case of the current bid.

[boadicea] 04/8/2009 14:09

I should point out that while I may draw attention to interesting situations, I DON'T give tips, so I hope you DYOR. I intended to compare and contrast the positions of the short and long-term holders.

PS: I'm sure you did! - The stake-building does look interesting, doesn't it?

[wywcu1] 04/8/2009 13:57

boadicea OT - had a quick look at ALM and have bought 15k at 28.305P. Looks interesting indeed . Thanks

[boadicea] 04/8/2009 13:31

This will likely be the third time a company in which I had a significant (for me) holding has gone to a buy-out for less than would seem a sensible open market price - Previous were RTD and NSB.

Another one probably to follow shortly (a matter of months at most, I would guess) is likely to be ALM (imho). For anyone wanting a ~20% uplift on a shortish term gamble, that might seem a reasonable return but well short of the 60-100% premium which it ought to fetch in more liquid times and for which, as a long term holder, I would happily wait.

The RTD case in particular was preceded by very strange holdings movements with Goldman-Sachs (who else - see RCG/Wang/Chan etc) involved but the FSA could not be persuaded there was anything to investigate - too busy keeping a close(d) eye on the banks, I suppose.

So, in this case I am less optimistic than some others that our White Knight will arrive on the scene .... although not totally without hope, as it does look cheap for anyone finding it a good complemetary fit with an existing organisation.

[dpeach] 04/8/2009 12:45

well with the growth and cash generation should interest other parties - even if came in @ high 2's still better than leCoques (ironic if ever) ...

[wywcu1] 04/8/2009 12:27

I am not 100% sure that Bidco will succeed. They only have 38.8% signed up to the deal. The main Institutions are hedging their bets and waiting to see if a better offer is received. If one is forthcoming then Bidco have 48 hrs to increase their offer otherwise CEL will have to recommend acceptance of the new bid. Fingers crossed - at least we are in play and it would be fun if the offers went hostile.

[boadicea] 04/8/2009 11:15

relwood - They don't have many shares to sell! (around 1% only I believe)... and they're unlikely to go away so your final suggestion seems a near certainty. Why else would they endorse this paltry offer?

[relwood] 04/8/2009 11:11

I have just reurned from holiday to see the news. Celsis is by far my largest investment and I have held for many years believing that a takeover was probable. I thought, however, that it would be somewaht higher price than that meekly accepted by the board.

I would be very interested to know what will happen to those on the board after the takeover. Do they just sell shares and go away or are there inducements being offered that are not public knowledge?

[cellars] 04/8/2009 11:09

I would be interested in meeting. I am in Surrey near the M25.

[mr hangman] 04/8/2009 11:06

Talk about p*ssing against the wind, better idea is finding places to reinvest
your cash, in todays attractive market

[davidosh] 04/8/2009 11:03

If you use this board then you will be able to email each other...

[boadicea] 04/8/2009 10:59

Was until recently but now lapsed. Could easily rejoin, I suppose.
btw, What is your approximate location?