Super,
I accept that and I think it's fair, but I also think both Serum and IM were prepared to pay a lot (Serum a near peak price in cash and IM a big price "in kind" as we might put it) because they wanted to be part of OXB.
Vulpes are a fund manager but the other two are in our business and much time / money has been expended for them to get their stakes in OXB. I think they will want either to stick with what they signed up for or decent compensation in exchange.
With M&G, Columbia, Liontrust, Vitruvian and such (c20% between just those 4) then I expect it's exactly as you describe.
If it happens then NH are incredibly flush with money and I don't expect them to penny pinch. |
Harry - 'it has to be at least what they paid for [...] just say no.'
I'm not sure I agree with this. The professionals mark to market, so they're not fixated on the buy price in the way that most PIs seem to be. The original purchase was probably a different manager anyway, so there's no personal involvement - it's just business.
Taking an offer at say 100% premium means the current manager has met his monthly targets, his quarterly targets, and very probably his yearly targets too. Not many will walk away from that. |
If Investor Relations isn’t responding, it could very well be because an update is imminent, and they are adhering to strict regulatory protocols. While frustrating, this silence might actually be a positive sign that significant news—whether routine or strategic—is on its way. Patience now could soon pay off. |
No need for anyone to work to keep the lid on the share price today. Rachel Reeves is doing the job for them. |
Super,
No worries and I agree with what you write. |
 W5AMH,
If it happens then I've thought for a while that to get Serum to say yes then it has to be at least what they paid for their shares back in 2021 (3,382,950 new ordinary shares at a price of £14.78 per share) otherwise that's 3% who will just say no.
Others aren't that convinced I know, and it is a big multiple (3.5x today's price) but we have seen similar / better with other companies before.
OXB is dreadfully undervalued these days almost entirely imho because of one extremely public pandemic perception, but I think it's important to remember that whilst the market looks for a value which is primarily a multiple of sales (especially on a business which is difficult to understand the science of), that doesn't take into account the value of some of OXB's tech - particularly around LentiVector.
The major shareholders close to OXB will know what that tech / knowhow is worth and are unlikely to give it away. If this business were as simple as just putting clever people in a well equipped building then Serum would already be doing it in India as they have a lot of very clever people and everything there (wages, buildings, every business cost) is so much cheaper. Novo would also simply "just" be able to do it with their new Catalent division.
When Seb explained about IM wanting to join OXB it was an explanation of what OXB could offer and what ABL couldn't. There was no way for them to catch up and so (as the analyst said) "if you can't beat them, join them?" and OXB replied yes.
We got to pay for ABL with new printed shares at a much higher than market price and IM put so much cash into the business as a sweetener to get to become part of the OXB story that the deal is effectively 0.3x sales (as stated by James Gordon of JPM - and as he said, he'd never heard of a going concern company being sold so cheaply before).
Ignoring any bid premium here, if an average rating in our business is 5.5x sales and we got ABL for 0.3x sales, then isn't the real cost of those shares IM took in payment for ABL at 407.4p (so not the 3% they bought in the market or their later subscription shares - just the deal shares) effectively 18x more expensive than they appear.
Very roughly here, IM's subscription and market purchase shares are about 80% of their £49m holing in OXB. If their real cost for their placing shares (407p) was 18x the heavily discounted deal price for ABL Europe, then won't their average real cost for the lot be nudging £20 per share to them?
Apologies if doesn't make sense or I've explained badly, but it makes sense to me.
In many less words, we know Serum are sat on just less than 3% at 1478p per share.
IM swapped us ABL at an artificially low price for c20% of the OXB shares they own. If you up the cost of that 20% by a factor of 18 then average that out over all the 10.9% of OXB which IM own then it implies a real cost to them of something around £20 per share.
With Vulpes they own over 8% but have been in so long that it's really difficult to estimate an average cost. After being here over 20 years though, then unless they need the money why on earth would they agree to an optimistic bid price?
c23% of the shares just with those. Surely a bidder would have to get those 3 to agree else it's not worth even trying? |
Seanje, welcome no doubt back to sub 4 quid....hard sometimes when you are a LTBH here .... |
I have now sent three emails to OXB investor relations - one a week - asking about a business update and not received a response. This is starting to irritate me now. As somebody said, that is their job to communicate with shareholders. Even if it is just to say we have nothing to say right now. |
Harry - thanks for the Baker McKenzie summary - it's the best I've read on the subject.
You're right that 10%+ prevents squeeze-out, but if the bidder gets 75%+ (which I guess in this case they probably would - certainly at £12!) then they can delist and do pretty much what they want. I was involved in a situation where I and others wanted to hang on to our holdings, but the buying company had other ideas.
So they organised a large rights issue. For them as effective owners, it was just shuffling money from one pocket to another, but for us taking it would have meant we had to hand them a big wodge of money while getting no more control of the situation, and knowing all the while that the owner hated us and wanted rid of us. Inevitably we all folded and it became 100% owned.
So I don't think in practice that the 10% means quite as much as one might think it does. |
If this happened at OXB it would likely be a knockout bid.
As long as its north of £12 it will receive my recommendation. |
Interesting reading chaps. I think this is a pretty specialised subject and it's something I know very little about.
I found this link earlier which shows your rights against percentage shares held in a situation like this
I noted that at more than 10% you have the right to keep your shares in a situation were we would be bought out.
I know this is just another piece of circumstantial evidence which could be completely unrelated, but there is a question to ask here of why IM (after selling us ABL very cheaply to become part of OXB) said from the very beginning that they wanted just over 10% (they actually ended up with 10.9%) but presumably that means that if IM want to stay part of OXB (or negotiate a better deal later) then they are free to do that? |
Can't see the problem. There's nothing that I'm aware of to say that Novo having a director on the board means they can only bid in a (short?) window after the results. As a 12% shareholder they'd expect to have better information than lesser mortals in any case - if their fund manager rings the CEO he's going to get an audience - after all, it's a responsibility of the board to keep major shareholders up-to-date with events.
What it does mean is that when it comes to discussions about acceptance and recommendation of the offer, he has to stand aside and leave it to the independent directors, of whom they have more than enough.
If this happened at OXB it would likely be a knockout bid and as such recommended by the independent board, and all the major shareholders would have been lined up to accept it. With Novo starting with 12%, a board recommendation in favour, and take-up by other shareholders, there's no chance of a competitive bid, so absolutely no reason for the Takeover Panel to object. |
Many thanks for that message. Good clear points. |
If Oxford Biomedica (OXB) does not provide a trading update in January and waits until April to release its audited full-year 2024 results, Novo Holdings would face some constraints in terms of timing for a potential bid. Here’s how this scenario could play out:
1. The Importance of Non-Public Information
• Current Situation: If OXB’s revenue guidance for 2024 (£126m–£134m) still holds, and Novo Holdings has been conducting due diligence, they may already have access to non-public material information (MNPI) about OXB’s 2024 performance.
• Implications for Novo:
• If Novo has insider knowledge (e.g., OXB’s preliminary 2024 results or performance above guidance), they cannot bid until that information is publicly disclosed.
• Why? Insider trading rules prohibit using MNPI to make investment decisions, including takeover bids.
2. Can Novo Bid Before April?
• Scenario 1: OXB Issues a January Trading Update
• If OXB provides a trading update in January, confirming that revenue is within or above the guided range, Novo could likely proceed with a bid soon after.
• The trading update would make material revenue information publicly available, reducing legal risks for Novo.
• Scenario 2: No Update Until April
• If OXB delays releasing financial information until April, Novo would likely have to wait until then to bid.
• Why? Without public confirmation of OXB’s revenue performance, Novo risks regulatory scrutiny for acting on MNPI obtained during due diligence.
3. What Could Novo Do in the Meantime?
If Novo is serious about acquiring OXB and does not want to wait until April:
• Pre-Emptive Bid: Novo could issue a bid based on publicly available guidance and past information, stating that the offer is contingent on OXB meeting its financial targets.
• This approach could be risky, as the final results might vary.
• Accelerated Disclosure: Novo might request that OXB release a preliminary trading update to facilitate a bid.
• This could involve confidential discussions between Novo and OXB’s board.
4. Strategic Considerations for OXB
• Why Delay a Trading Update?:
• If OXB delays until April, it may want to ensure its results are fully audited before sharing details, especially if there is unexpected variability in earnings.
• Alternatively, the board could be intentionally keeping quiet to manage negotiations with Novo or other parties.
• Impact on Shareholder Perception:
• Institutional investors might push OXB to provide a January update, as the lack of transparency could suppress the share price and hinder their ability to gauge fair value in a potential takeover.
5. Conclusion
• If OXB Updates in January: Novo could bid shortly after the update if the revenue is consistent with guidance.
• If No Update Until April: Novo would likely have to wait until OXB’s full-year results are public to avoid acting on MNPI, unless they structure a conditional bid based on guidance.
For Novo, timing the bid carefully will be critical, as waiting longer risks OXB’s value increasing as its growth trajectory becomes more evident. Conversely, early disclosure of strong results could spur other interested parties to step in, creating a more competitive bidding process. |
I honestly didn't know that Phil and if it is the case (and I'm sure you will have checked) then it's a very good point. |
Hi Harry,
But Novo cannot bid (if they are going to) until our results are made public, either audited or unaudited, as they would be bidding with potential insider information. So if OXB don’t update us at all until April, I doubt novo could bid until April. |
Phil,
I know we've talked about this before, but OXB are in the habit of announcing half yearly results and then adding figures updated to the announcement date.
i.e. We will likely get our 2024 results (year end 31st Dec) in late April, at which time they will also update post period to the end of March. As that is effectively what the quarterly update would be, it makes quarterly reporting a bit of a farce doesn't it?
Stuart did mention in the past talking to the auditors about reporting in a different way, which I think we all assumed at the time meant quarterly reporting, but Stuart is gone now and we don't know what the discussions were about or how they ended.
OXB have their man at the JPM conference in San Francisco next week (not presenting) and are also at a big bash in Texas the following week, so a possibility that we will see something related to one of those two, but I wouldn't put money on it.
OXB are plainly quiet by choice at the moment. |
takeiteasy,
Strictly speaking they didn't say that as such, it was more along the lines of - we won't maintain a pipeline page as it's not appropriate for CDMO and we won't announce individual deals unless we have to / the client wants to, but we will maintain a KPI table which is more the norm in CDMO (of number of customers, programmes, etc.).
If you were able to raise this with Frank then he would likely say that it was all in this on the 18th of November which was 6 working weeks ago and everything is still lovely. |
Sean,
As mentioned the other day, most of the small trades are flagged SINT, which I don't fully understand but have been told it's more of a signalling system between market firms and their prices. There are almost always a few of these, but at the moment there are lot (like 10x the normal number) and it's not clear to mortals like us why.
Dom has mentioned many times that on most days our closing price is almost pegged to the opening price, even though intra-day it's all-over the place.
Something is plainly going on, but whether good or bad and how it will affect us is as yet a mystery.
Remember non-UK firms can build 5% before they have to notify. Alternatively it could be pretty much anything. |
Is it really ‘discraceful’. It was over Xmas, they can’t give any update until the numbers are in, and they have already told us that they will provide quarterly kpi updates. |
We can complain all we like about the UK markets and why firms are delisting or being taken over, but the management at times like this do very little to help themselves - they specifically I think gave an impression that reporting to shareholders was going to improve ? |
Discracefull actually what does investor relations think they are paid for ? Is it just they judge the size of your investment They could at least acknowledge your inquiry Serve them with a Freedom of Information request |
Really poor show imvho - they clearly want to remain in drift mode for quite a while longer :) |
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