Celadon Pharmaceuticals Share Discussion Threads

[davidosh] 06/8/2009 19:41

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 19:13

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 18:02

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 17:03

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 14:20

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 12:47

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

[boadicea] 06/8/2009 10:36

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 07:29

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

[boadicea] 04/8/2009 15:34

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 13:09

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 12:57

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

[boadicea] 04/8/2009 12:31

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 11:45

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 11:27

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 10:15

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 10:11

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 10:09

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

[mr hangman] 04/8/2009 10:06

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

[davidosh] 04/8/2009 10:03

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

[boadicea] 04/8/2009 09:59

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

[dpeach] 04/8/2009 09:50

I can help with some background work .. UKSA might be useful, boad are you a member?

[boadicea] 04/8/2009 09:49

davidosh, (wywcu1, etc) -
Agree with your views entirely but our opposition (as pi's alone) is not enough to have any effect unless, as you say, we can get institutions on the same track.

You obviously have some idea about what needs to be done and I accept it may need time that you don't have to spare. I could possibly offer some help with the donkey work. How keen are others to help?

We should need to form a group with a private communications system and make sure it doesn't get infiltrated.
It would also possibly helps to have a core of enthusiast within a reasonable (80/100 miles say) distance of each other so they could meet without anyone having to travel more than about 40/50 miles. (My location is West Oxon.)

Other obvious requirements are -
a list of significant shareholders (but most pi's will probably have a nominee account)
a list of institutions and contacts therein

Is there any point in getting UKSA involved? Would they help? How effective are they?

Your comments??

[davidosh] 04/8/2009 08:54

For private smaller shareholders to prevent this happening we will need the support of at least two and probably three of the institutions as around 75% of the company is held by them. I have done this lobbying before and do think there is a chance to make a stance here but you need to be fast and I do not have the capacity and time to take on every situation myself. Who is up for the hard work involved ?

There were only six private investors at the Agm so you can see where the lethargy is seen and directors own very little of the company so these private equity guys know how to take advantage.