Mereo Biopharma Share Discussion Threads

[wbjunior] 20/11/2006 17:35

Pingi
As far as I can see around $3.25m still remains to be paid to complete the Moda acquisition and it should have been in the Interim report cashflow. I can only assume there may be ongoing differences regarding final costs with the acquisition, tieing up loose ends so to speak..................wbj
Ps Own resources includes cash, cashflow and loan finance

[pingi] 20/11/2006 17:20

momentos - 20 Nov'06 - 17:03 - 2042 of 2044
You will not find an exact $4.5m as movements in borrowings etc are not broken down to that level. However you will find USD borrowings in the AR of 4m+

You would find a sizeable sum going through the cashflow statement in the interim period under "acquisitions" heading.

There wasn't such a casflow reported.

Something isn't right.

[pingi] 20/11/2006 17:17

momentos - 20 Nov'06 - 16:14 - 2032 of 2033
BTW Moda purchase is clearly covered by a loan if you read through recent docs, not via shares.

momentos - 20 Nov'06 - 16:45 - 2039 of 2043
RNS 7 March:
Total consideration for the acquisition will be $5.5m in cash, to be satisfied
from the Company's existing resources


momentos - there was no loan for Moda acq.... RNS states "from the Company's existing resources"... that means from cash balances and future cashflow.

Two cash payments... an initial and final consideration based on performance.

The second payment, to be made in cash, hasn't gone through in the interim period or if it has they have misreported it.

Something isn't right with the Moda acq.
This only reinforces my sell decision.

[momentos] 20/11/2006 17:03

You will not find an exact $4.5m as movements in borrowings etc are not broken down to that level. However you will find USD borrowings in the AR of 4m+

Your stated reason for selling is very valid and I must admit I had spotted that as well!

[pingi] 20/11/2006 17:01

momentos - 20 Nov'06 - 16:28 - 2035 of 2040
pingi - No (Wallis)

Don't remember an announcement.
What were the circumstances of him leaving?

Would have thought the President of Moda America leaving was worthy of a small comment from MPH. Afterall, Moda is supposed to fix the rather large hole left by YSL, in Turnover, if not in profit terms.

[pingi] 20/11/2006 16:54

momentos

You obviously haven't followed what I'm saying.
$4.5m hasn't gone through in the interim period just reported.

Tonights homework is to reread my posts.

[momentos] 20/11/2006 16:45

Possibly yes then!

RNS 7 March:

Total consideration for the acquisition will be $5.5m in cash, to be satisfied
from the Company's existing resources, of which $1.0m was paid on completion and
the balance of $4.5m payable on 31st July 2006.

[jason8466] 20/11/2006 16:35

sorry pingi,

I dont buy what your saying. If you had doubts, would you not have raised them earlier, as opposed to 'looking' for some negatives?

as we can all see the share price is moving back up. It seems the p/i 's were the only ones to get spooked (yet again),that includes me lol.

No clarification as the management obviously feel there is nothing to clarify.

Holding more tightly than I was this morning lol

Interesting day though.

[pingi] 20/11/2006 16:34

momentos - 20 Nov'06 - 16:28 - 2035 of 2035
pingi - No (Payment)

Is that an answer to "has the final payment gone through"?

If so... how do you know?

[momentos] 20/11/2006 16:28

pingi - No (Wallis) and No (Payment).

The final payment has clearly been affected by 2005 turnover so they are expecting to pay less. The loan was probably in USD so perhaps no further saving on currency movement (weakening dollar)

Shares off 4p, bid off 3p on the day so MM'd obviously think there is a serious issue (not!).

[pingi] 20/11/2006 16:25

momentos - 20 Nov'06 - 16:14 - 2032 of 2033
BTW Moda purchase is clearly covered by a loan if you read through recent docs, not via shares.

The debate wasn't just one of how is the acq. financed... but has the final payment gone through... which I don't think it has... suggesting a problem.

[pingi] 20/11/2006 16:22

Is "Tom Wallis - President of Moda America" still with the business?

[tuftymatt] 20/11/2006 14:43

Hello Everyone,

Well I am not sure if it's a good move to sell or buy today so will not try and cover that point. What I will say is yet again the RNS lacks anything to get excited about and the timing sucks.

Don't knock anyone taking a profit today and the same goes for those taking a chance and buying more.

MPH do seem to love making life difficult for their PI's don't they!!

[wbjunior] 20/11/2006 14:25

Naked trader
Two going down - REA and Marchpole. No idea with REA, happy to hold anyway and Marchpole is down after some question marks over additional shares that I thought was already in the price. Probably a buying opportunity on weakness.......wbj

[daza70] 20/11/2006 14:20

and the buyers return

[wbjunior] 20/11/2006 14:08

Lex sorry to lose you , but I understand your frustration caused by the RNS, good luck my friend and who know's perhaps we may see you back soon...........................wbj

[cosnova] 20/11/2006 14:00

another small tick up, suspect it would not take much buying to move back

[wbjunior] 20/11/2006 13:56

Just back in , small pull back , awaiting RNS or reply from Finance Director which ever comes first, and when, is anyone's guess. Nothing else to add until more information is released, but fairly confident all is well imho.....................wbj

[daza70] 20/11/2006 12:44

shore cap bidding for 25k @ 1.145!

[pingi] 20/11/2006 12:40

marben100 - 20 Nov'06 - 12:03 - 2021 of 2021
I've never seen the term "delayed consideration" (or even "deferred consideration") in a cashflow statement.

"delayed consideration"... did I really say that... my FA lecturers would have a fit.

Anyway... Whether described as "deferred consideration" or "acquisition" it would appear in the cashflow statement in the 'investing activities' section not as anything else in the 'financing activities' section. I don't think $4.5m has gone through in the period... which may suggest a problem... the nature of which is open to speculation.

I've briefly read the Moda notes in the prelims and it does not seem very clear how it is being accounted for. The headline consideration figures don't even get a mention. Don't have the AR so cannot investigate any further today.

Putting aside the numbers for one moment... it wouldn't surprise me at all if the Moda acqu. final consideration agreement turns sour... for the vendors at least. It does seem to be the MO of this company.

Is the Moda vendor still involved in the business? Constructing a payoff via shares based on performance would not be beyond the scope of it being a "different purpose".

Anyway... don't have all the facts... just speculating.

I sold my small 4k on Fri. before the latest RNS.
The geograpical analysis of profit/turnover did it for me.

[jason8466] 20/11/2006 12:13

agreed Marben,

but is it against FSA rules and the placing of the word 'possible' is open to interpretation.