 Time will tell - both with the takeover hypothesis and the price, but I'm inclined to the idea of the former mainly because the boss of Novo Holdings had previously indicated a plan to buy up companies like OXB.
Re the share price, then there's no point arguing what the market thinks it is worth at the moment. Myself though, I think a much more important figure is what the majority of our major shareholders think OXB is worth.
The market is simply looking at sales and profits, but some of OXB's IP and knowhow is incredibly valuable and not in the price.
At the moment the market price isn't representative (for various reasons we talk about a lot) but if the Novartis work alone is worth £25m per year to us (and I think it is about that) then just that should be worth about £1.30 / £1.40 per share - and wasn't it Novartis + 36 more customers we had at the last count? OK the others are not as large, but even so?
I also think you have to be careful about the price of the shares which OXB were willing to place for IM as IM had previously sold us something quite valuable for a very low valuation and accepted full payment in shares at twice the market price. So that final placing was a fair deal for them and hasn't been offered to anyone else.
I've listed the shareholdings before, but the top 3 own 30% and the top 13 something like 70%. A lot of them have held for a very long time and they know what OXB is worth. Unless they are distressed then how would an opportunistic bid work? |
Well you might be right but who would of thought back in the heady days when the price was mid teens that Institut-Merieux would buy a stake at prices well south of a fiver.Whether one likes it not,any potential bidder will lend some credence to how OXB has been valued by the market hence you get the well worn comment 'the offer represents a premium to the average share price etc of x per cent'.Anyway,que sera sera,its speculation as to whether a bid will emerge at all. |
I really can’t see £7-9 being anything close to a successful bid. |
For information, I sold 200 shares at 13:47pm shown as a buy, trade number 132. In the first 10 minutes after 14:30pm another 50 trades conducted. Not hugh trades but US interest? |
from 3 mins
But Galapagos says short vein-to-vein time is key for localised manufacturing, which crucially doesn't involve cell freezing. |
Aside from the obvious you mean?
IM merged ABL Europe into OXB to get a part of future business which they couldn't compete for alone via a shareholding in OXB which they took as full payment.
Amazing deal for OXB but driven by what OXB had and what ABL didn't have. As Seb explained, they would never have been able to catch up with the vector tech on their own and when the analyst asked "so it was a case of if you can't beat them join them?" he replied yes.
Would they have imagined OXB then being bought out? Well it must have been considered as a risk.
If it's enough money to compensate them for selling those expected future OXB profits now then I would imagine they would be ok with it. If not then what are they going to do? It's a risk we all take.
If there is no bid coming then I would expect them to be very pleased with c£180m in sales next year and a profit (as will I).
Something is going on and your guess is as good as mine. OXB went quiet 6 months before the ABL deal was announced and no insiders bought shares between the full year results and that deal announcement (following which a lot of them immediately bought shares).
Nobody could have guessed that deal was on from what was in the public domain before it happened. Investment detectives might have spotted that Seb was an adviser to IM, but how would you guess more beforehand?
Today is a bit different as there seem to be a lot of clues out there indicating that Novo could make good use of OXB's skillset in their newly acquired C> arm of Catalent.
Is it true or is it just coincidence?
As I wrote the other day, if there is something in this then following FTC approval there is no point in Novo waiting. They have just spent 16.5bn on something which they will want to see come good.
Next step is waiting to see what the FTC say. |
what is in it for IM in any of all this - what are they gaining now and in the future Harry... |
Cousin,
Just to bat one back over the net here (no offence intended so please don't take any)...
OXB have 13 shareholders who between them hold c70%.
3 of them hold 30%. 2 of them are imho the only realistic likely buyers for OXB.
It's been explained in the past that this was the main reason why the PE guys never tried a smash and grab, which did seem to be on the cards when OXB exited the pandemic with £85m (or whatever it was) in cash (plus assets like the buildings).
In the time since then OXB have sold their buildings and slashed the in-house drug programme, which sort of ended any possibility of the PE model even being entertained.
But we're still back with the awkward maths here, of how do you get the shares without the price going through the roof - remembering that if it doesn't go down well that at 50% it means paying the highest price paid to everybody else?
I think if an opportunistic bid was ever on then it would have happened in the past and these days the landscape is all wrong.
I can think of many ways to put forward a friendly offer, but the easy way is a number where on D-Day the OXB board vote and then Roch makes 12 telephone calls to explain the offer and that the board will / will not be recommending it to the shareholders.
If it's not a good offer and Vulpes, Serum, IM and Mr Shah all say no, then that's 20% of the shares off the table before we even know about it.
Would knowledge of a future bid conditional on approvals force Frank to put the company into a closed period where insiders couldn't take advantage of that? I would say absolutely - even if some of those senior staff don't know why they are in a closed period.
Conversely, with Serum (for example) the MSA is signed and in place and we already know that should they trigger it with a guaranteed minimum amount of work then they have rights to jump the queue on a large bioreactor for 10 years. Would Serum's dealings with their masters stop OXB insiders buying in the open periods which follow the kitchen sink of each results presentation? I honestly think not.
Similarly the commercial CAR-T deal which is announced but not announced. We know that can only be 2 possible companies with 1 being the odds on favourite and it's a manufacturing job for their vector. Good work and nice to have, but not outside of what could be expected as the ordinary business of a global CDMO.
That's what makes me think this is bigger than just some more work coming our way.
We will see. |
Hostile bids in the pharmaceutical industry are pretty rare,afterall the primary assets go up and down in the lift and it would be counterproductive to upset them.However,opportunistic bids(as undertaken in recent years by the likes of Takeda) are very common and it would be sound business sense if an interested party moved to acquire OXB in the near future as it moves towards profitability.Corporate advisers won't be remotely interested in how the OXB price fared in the past,there will be a straightforward analysis using peer comparison and investment ratios to estimate a fair bid price now.OXB willing,a bid around £7-£9 could probably win the day currently.I do feel that if OXB management considered their stock rating an overriding priority,they would have sought a US listing some time ago like some other UK industry players. |
I have to say that the impression I took from the AGM was that there was a feeling of potential vulnerability to an opportunistic bid.
Would an indicative bid have prevented insiders from buying pretty much all of 2024? Personally I can't see that. Maybe a month or two but not for such a prolonged period.
A bid is probably the likely end game for OXB, as so many small/mid UK quoted companies do ultimately succumb.
My best guess at the lack of insider buying is a large potential contract. There was mention in the results regarding contracts that were complex but potentially valuable being assigned a low probability in the pipeline value. Maybe something could be close but hasn't managed to get over the line? (but hasn't fallen away either). |
It's not a case of what we or OXB managers want, more the best of a situation which might drop upon us soon. Important to remember that OXB is a small cap stock (formally a mid cap stock), whilst the names we mention currently regarding this possibility are mega-cap. They will win.
If (and I'm just making up numbers here for the sake of an argument) Novo see OXB as an instrumental part of the plan in making their 16.5bn starter investment in Catalent (currently No3) a serious rival to Lonza (No1) and Thermo Fisher (No2), then they may have already said to OXB "If Catalent gets approved then we are going to bid 10x sales for OXB".
So if there is currently that conditional offer somewhere in the background based upon a multiple of sales, the actual share price at any point in time is a bit irrelevant and Frank's job (to do the best for the shareholders) is to wait and take it.
To the best of my knowledge the only time a CEO would try to talk the price up is to fight off a bid which he or she sees as too cheap, but if the bid is a good one then the CEO is pretty much compelled to recommend it to shareholders. If a bidder offers 10x sales and the sector average for your company is something like 5x sales, then they have made a very good offer haven't they?
Just to repeat I have no evidence for this other than a feeling and I made up the 10x number to make the point of an argument. |
Harry, one bit of your argument I am not sure I fathom is why we would want an interest from a larger player when the share price still is on the floor. Why not let the company blossom for a couple of years first and work from a better start point... |
feels like firmly rather than gently to me - but so agree with your sentiments... |
Perhaps (probably) I am fitting this into the overall process, but the behaviour of the company hasn't appeared to be helping their share price. Additionally, the daily curve (up at start then promptly down for the rest of the day until a little rise at close) suggests that the share price is being gently choked. Might this help to show a good offer as even better? |
I'm on the fence tbh Phil. I've written what I think will happen, which all basically started when the boss of Novo Holdings said in the press interview that he was going to use up his GLP-1 drug windfall profits to buy up carefully selected service providers to the pharma industry.
It struck me at that point that Novo holding 12% of OXB shares meant that we had already been carefully selected. The rest I've written too many times now.
Catalent shareholders see it as the best option considering what might be without Novo's money.
Catalent's employees seem very happy with the job security (a big thing in today's economy) which Novo's billions will bring.
I think the FTC will look more at the jobs than some of the other complaints (which Novo and Catalent have given assurances about) and follow the EU approval.
Should that happen then we will find out very quickly afterwards if my guess here is correct or not.
If OXB stays independent through the all time record sales year of 2025 which also marks our return to profit, then I honestly would be very happy with that - but the Doris Stokes in me thinks Novo are about to shower us with money.
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philh75 6 Dec '24 - 20:02 - 9348 of 9349
Great news. |
Jez,
I think the grand unifying answer to that one is the oft used "it is what it is".
I've noted more than a few times that my ideal scenario is for OXB to to remain single and become a dominant player in C> CDMO. I would very much like it to become a British success story, even though Frank has dropped the Oxford link in the company name already.
How many people sold at the top and bought at the bottom? I would have thought it's not most of us. I certainly bought every time I thought it was the bottom from £7 down to under £2, but I'm not sure that counts as timing it right.
If my guess here is correct - and remember it is just a guess based upon a large bag of clues which individually might not be that compelling - then for Frank to grow OXB to another 5 locations internationally is an amount of time and money which is probably not within his realistic remaining time at OXB given his age.
Conversely, for Novo to give Catalent a bag of cash to develop the world's best / equal best LentiVector, all the supporting tech and process improvements + a similar but more recent AAV, well that literally could take 20 years.
To me there's an obvious threesome where OXB's knowledge marries Catalent's capacity and Novo's money, giving "the" C> CDMO in a timescale which none could achieve without the other two.
If I'm correct then the FTC will soon say yes because Catalent was in a bit of a pickle going forwards without Novo's money. Novo (in this scenario) would want OXB quickly and without resistance from the big holders (we don't really count).
I think in a bid scenario the minimum price has to be what Serum paid for their 3% else they immediately alienate one large holder.
The other issue is IM (who of course own 10%) and it's pretty much impossible to work out what IM actually paid for their shares as they gave us a very good business for next to nothing and let us pay with shares which were an artificially high price. They didn't do that in a fit of altruism, they did to be part of the the future number 1 C> CDMO. If Novo bid low then not only have they had that future plan rug pulled from under them, but they have also been robbed in the process. QED IM will want a lot of money to compensate them. Happily Novo have a lot of money.
I suppose the bottom line here is how important this future part of their CDMO empire (the C> part) is in Novo's plan. We have seen other companies in our sector bought for 10x and 16x sales when they weren't even profitable - they simply had something the bidder wanted.
We are 3 working weeks away from OXB starting their return to profit.
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jezmundo 6 Dec '24 - 13:10 - 9342 of 9348
H. Your theory on an impending takeover is compelling but to me personally very undesirable. Having like most of us, sold most of my stock during the covid fiasco, re entering when the price had tanked, a takeover of lets say 10 - 15 pound would be at best disappointing |
Great news. |
Catalent and Novo Holdings Receive European Commission Unconditional Approval for Pending Transaction
www.catalent.com/catalent-news/catalent-and-novo-holdings-receive-european-commission-unconditional-approval-for-pending-transaction/ |
Assemble some fresh "crack troops" for the next push on the 4.30 barrier...working a treat for the market as these repeated attempts keep flushing out new sellers at this level so will be rinse and repeat until everyone has been cleared out :) |
Apologies, pay wallA UK political committee says the country is underprepared for future pandemics due to "worrying developments" on domestic vaccine manufacturing.The UK's House of Lords' Science and Technology Committee released a 15-page letter on Thursday that mentioned its concerns on news reports of the Labour government cutting the funding for what would have been a £650 million build of AstraZeneca's vaccine manufacturing site in Liverpool. It also raised the alarm on the UK only working with Moderna on vaccine production and the lack of a guarantee that these vaccines would not be sent elsewhere."The UK must have a resilient, diversified domestic vaccine manufacturing sector, from research through to clinical trials and large-scale manufacturing," committee chair Julia King wrote to Pat McFadden, chancellor of the Duchy of Lancaster.The push for stronger domestic manufacturing is building momentum elsewhere, too, with Europe looking for ways to reshore its supply chains and the US making moves to nationalize its drug production.The UK has been working with Moderna since December 2022 and is expected to last a decade, but this deal has made it more likely that other vaccine makers would not collaborate with the UK, the letter states. The committee called for more transparency on the list of vaccines Moderna manufactures for the UK. It also voiced concerns that working with an mRNA vaccine company would limit its options for other vaccine approachesEarlier this week, the UK Health Security Agency signed a contract with vaccine maker CSL Seqirus, who will produce five million doses of human H5 influenza vaccines for the country.The Lords' letter also suggested launching a so-called "peacetime vaccines taskforce" to keep UK factories alive in the absence of a pandemic. This would work by getting UK sites to intermittently produce vaccines for "novel" world.MORE LIKE THISAmgen deepens roots in North Carolina with latest $1B factory build December 5, 2024National Resilience's new CEO; Moderna opens Australian manufacturing siteDecember 5, 2024Novo Nordisk budgets $409M for new quality control lab in Denmark December 5, 2024You are reading this article for free. Enjoy! Upgrade for unlimited access. |
If only we knew of a company with vaccine manufacturing ability based in the UK !HTTps://endpts.com/uks-local-vaccine-production-stymied-by-budget-cuts-government-committee-says/ |
I think £15 would do it and £12 might. |
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