Plethora Solutions Share Discussion Threads

[zangdook] 12/11/2015 14:43

Liquid Manure posts as regular as diarrhoea.

[liquid millionaire] 12/11/2015 13:35

Love the quiet thread as well....it just means that the CROWD are yet to arrive at PLE!

[liquid millionaire] 12/11/2015 12:55

From a chartist point of view....looks like a FLAG formation at PLE

[cube boss] 12/11/2015 12:15

Folk waking up me thinks;0)

[cashmachine2] 12/11/2015 12:06

LM.You've got a treble whammy here.1)Sizeable holders of RP would be stupid to not buy PLE as this price to mitigate any weakness in the RP share price once the deal goes through.2)The larger holders of PLE might also look at increase their stake in order to maximise the short term volatility. 3)I expect as part of the deal, RP will then announce a consolidation of the shares in issue coupled with positive news regarding developments for 502.Let's see how quickly the share price moves towards the RP share price. I see these getting above the last placement price of 9p quickly and then pause for breath.

[liquid millionaire] 12/11/2015 11:45

Whilst buying is now increasing again....

[liquid millionaire] 12/11/2015 11:44

Mostly....

[liquid millionaire] 12/11/2015 10:01

Selling drying up....

[tsmith2] 12/11/2015 10:01

Which is a good thing as churn falling off

[tsmith2] 12/11/2015 10:01

Vol drying up..

[big_cat] 11/11/2015 14:17

This is from Simon Thompson in Investors Chronicle this morning ....

Plethora gets a boost

The other news that caught my eye was the bid approach from Hong Kong-listed Regent Pacific (Hong Kong Stock Code: 575), the investment vehicle of Jim Mellon, for Aim-traded Plethora Solutions (PLE: 5p), a UK-based speciality pharmaceutical company dedicated to the development and marketing of products for the treatment and management of urological disorders. Plethora's principal product is PSD502™, a prescription treatment for male premature ejaculation that obtained marketing authorisation from the European Commission in November 2013.

Regent Pacific and its concert parties together already hold 29.88 per cent of Plethora's issued ordinary share capital and their indicative offer has been pitched at 15.7076 new Regent Pacific shares for each Plethora share. On the basis of Regent Pacific’s share price of HK$0.10, and using a sterling to Hong dollar exchange rate of £1:HK$11.71, the potential offer values each Plethora share at 13.4p, the company’s issued ordinary share capital at £110m and fully diluted share capital (excluding the out-of-money outstanding options and warrants) at £131m.

This represents a thumping premium to Plethora’s sagging share price of 2.75p prior to news of the offer being made. But before you get too excited it’s worth flagging up that there is no cash element and Regent Pacific only has a market value of £30m. That’s less than Plethora’s market value of £41m and explains why there is such a big difference between the implied offer price of 13.4p a share and Plethora’s current share price of 5p. Still it’s fair to assume that a formal bid will be made as Regent Pacific has since received letters of intent from investors controlling 10.96 per cent of the Plethora’s issued share capital, so now has almost 41 per cent of the equity backing the bid.

Clearly, it’s not going to be possible for everyone to buy Plethora’s shares in the London market at 5p, sit back and wait for the formal bid to be made, and then sell your Regent Pacific shares immediately at 13.4p in Hong Kong. If every investor attempts to do this then Regent Pacific’s share price will fall sharply given that it is issuing 15.4bn shares or more than four times its current issued share capital. That said, one of the reasons Plethora’s shares were so weak in the first place was down to the fact that the company is short of funds, so the price has been depressed due to financial distress. Eliminate this factor and a higher valuation is warranted.

Prospects for PSD502™

Indeed, Plethora only has cash balances of £1m, and guidance is that commercial operations under its current operating plans will face a “significant negative impact in January 2016 in the absence of further funding being available to Plethora.” Regent Pacific has net cash and unpledged listed equity securities worth about £8.9m on its balance sheet which it can use in order to develop and commercialise PSD502™, and meet the substantial funding needs of Plethora in the near future.

Moreover, it is desirable to progress with planned expenditure in key areas which support the development and commercialisation of PSD502™, such as manufacturing of a reduced fill can for the product, and research and development spend associated with a New Drug Application approval with the US regulator. A key objective is to obtain EU approval by 30 June 2016 for its reduced fill product, such that Plethora can obtain the variation payment of €6m from its European licence partner Recordati (REC:MIL), a €4.8bn pharmaceutical group listed on the Milan Stock Exchange, in preparation for its commercial launch in the EU; and firming up licenses for other territories too.

Plethora’s board has had discussions with partners in Latin America, Asia Pacific and South Africa, and with a multi-national pharmaceutical company for 'out licensing' the grant of rights by Plethora in respect of PSD502™ for countries in the Middle East. In all cases the parties have entered into non-binding heads of terms and have moved into discussions on the licence agreement which anticipate an up-front payment to Plethora followed by additional payments upon the achievement of certain milestones plus royalties linked to sales.

However, before negotiations can complete a reduced fill product for PSD502™has to be developed and manufactured under good manufacture practice conditions. And for that Plethora needs more funding. This is where Regent Pacific comes in.

Implied value of Plethora

Clearly, Mr Mellon and his concert party can see great potential in PSD502™otherwise the bid would not have been pitched at such an elevated level. Indeed, in the first half of this year, Regent Pacific acquired certain rights and obligations under a promissory note, worth up to £4.58m, in respect of services provided to Plethora in relation to out-licensing of PSD502™ under the Recordati agreement.

Furthermore, it’s worth noting that Plethora self-developed this product and had not capitalised any of the costs incurred, nor any of the future value it may derive. Regent Pacific, with the assistance of a professional independent valuation expert, Jones Lang LaSalle Corporate Appraisal and Advisory, determined the fair value of PSD502™ based on the “relief from royalty method” to be in the region of US$253m, or £167m at current exchange rates. This explains why Regent Pacific’s indicative offer values Plethora’s equity north of £100m. Only time will tell whether this is a fair valuation or not.

Frankly, whether or not PSD502™ is a success is not the issue here. I am far more concerned as to what will happen to Regent Pacific’s share price if it launches a formal bid and Plethora shareholders are then issued with a slug of equity. Realistically I can see the price in Hong Kong soften, but certainly not deflate by 60 per cent which is the implied discount in Plethora’s share price. In fact, I reckon that if Regent Pacific launches a bid there could be upwards of 50 per cent upside to Plethora’s current share price of 5p. The interest of Hong Kong investors is being aroused by the potential acquisition too which explains why Regent Pacific’s share price has perked up since news of its bid approach emerged. At around the 5p level, Plethora shares are worth having a small interest in. Speculative buy.

[cashmachine2] 11/11/2015 13:37

Well the buy yesterday of £112.5k was filled and hardly a small "punt".Orders being filled and taking candy from the gullible private investors only for the so to spike again towards 10p

[bonzo] 11/11/2015 12:28

If we were going to see an adverse reaction in the Regent price I think we would have Sen it already which makes PLE a good buy....

[tsmith2] 11/11/2015 10:02

Plethora (PLE) was a company that I was only vaguely aware of up until last week when a potential takeover bid was made for it. Up until then this AIM-listed pharmaceutical company, whose main product is a premature ejaculation treatment, had been trading at between 3p and 4 p, but then an offer landed from Hong Kong investment vehicle, Regent Pacific (also listed in Frankfurt but volume there is almost non-existent), that valued Plethora at 12.5p per share.

The offer wasn’t quite as random as it might first have appeared as the two companies have close links, and Jim Mellon and his Regent Pacific vehicle, plus other interests he has, own just under 30% of Plethora.

The share price rocketed to over 7p on the day of this news, but has since dropped back to the current level of around 5p.

That might seem strange until you look at the deal in more detail and see that it is an all-paper offer, with Plethora holders getting 15.7076 Regent shares for every share that they hold.

That made it far less certain that the deal will ultimately be worth 12.5p, if and when it is finalised, and many private investors didn’t seem too keen on possibly ending up with Hong Kong listed stock and sold into the spike.

Since then we have seen a continued sell-off of Plethora shares – probably partly from people who bought near the top of the spike and then sold because it didn’t hit 12.5p overnight! – and that has included one of the institutional holders, Baker Brothers, selling a small amount of its holding.

What we haven’t seen though, and which has surprised me, is any sort of sell off of Regent shares in Hong Kong, where the share price has remained steady at around HK0.1.

This suggests to me that Regent investors are keen on the deal and see it as offering value.

Currently Regent has cash but is looking for an investment to generate revenue, and Plethora has a finished product but is desperately short of money. Both share prices are at their lowest levels for sometime and have been a lot higher in recent times, so it could be that the market is viewing the combined entity as likely to be far stronger than the sum of the two separate parts.

For me this is all about the potential opportunity being offered by the low Plethora price if the deal goes ahead as planned, and I have been buying at just over 5p on that basis – having watched the reaction in Hong Kong before taking a position.

I would expect that those who don’t want to end up with Hong Kong listed shares will sell out before any deal is done, but it is also likely that we will see selling pressure on Regent after the deal due to the huge number of new shares issued.

Although there are relatively few Plethora shares are in freefloat and a lot of the outstanding warrants won’t come into play – a chunk of those are owned by parties related to Jim Mellon and Regent so can’t be exercised during a bid period, and the ones from the last placing are at 15p so aren’t currently relevant – so we may not see as much of a sell-off of Regent shares as some might be expecting.

The Regent price would also have to collapse to around HK0.04 as well to make it equivalent to the current Plethora price of 5p!

Should the deal be finalised and go to a vote it should be a formality that it goes through, as the board has recommended it be accepted and Regent has already received a letter of intent from two big holders pledging support through voting rights on over 10% of the shares in issue.

There is of course some risk that this could go lower, but from the current level I personally see good risk versus return, whether you are in for a trade or holding until after the deal is done.
- See more at: hxxp://www.shareprophets.com/views/16452/buy-plethora-on-the-basis-of-regency-pacific-strength#sthash.Kfow7PBD.dpuf

[daicaprice] 11/11/2015 08:13

Looking better.

DC

[tsmith2] 11/11/2015 08:13

Regent looking strong too - graph pointing to 1.2 shortly

[tsmith2] 11/11/2015 08:10

Overhang cleared?

[zangdook] 10/11/2015 15:55

I wouldn't assume that PLE share price is "right" and 575 share price is "wrong" and will adjust. The PLE price has been adjusting and will probably continue to do so.

Of course, after the merger goes through old PLE holders will make up ~80% of the share register and some of them will be holding on now intending to dump in HK - see Cawkwell - so there may be a correction. But if HK holders of 575 thought there would be a correction downwards they would sell now and buy back later, and through that selling pressure the correction would be brought forward. The low volumes in HK show that there is not selling pressure being absorbed by friends of Jim Mellon in order to keep the share price steady as was suggested above. People are not dumping the stock.

In fact there has already been a fairly substantial move upwards in the PLE share price It's met selling pressure from profit-takers, stale bulls, people who don't like the takeover, people who don't want to hold HK stock etc. I would expect a further move up here as the deal becomes more certain and as the sellers sell out. That's just a guess though, I can't predict.

[cashmachine2] 10/11/2015 15:43

Well the duplications were ADVFN saying internal error!! Sorry all

[cashmachine2] 10/11/2015 15:42

Amendment to the above with exact figures - sorry can't edit on my iPhone Well Baker Brothers made a mistake on the 9th with their holding announcement- it was 65,381,385 and not 35,381,385 and they reduced slightly yesterday to 62,631,385 and another 1M today bringing their total to 61,631,385Can't believe advisors are paid to check and they still get it wrong by a small 30m shares!!!Mr_Dross - 10 Nov 2015 - 08:48 - 9242 of 9258 - 1heres why the share price is still subdued , things will change one word .. opertunityHttp://www.investegate.co.uk/plethora-solutions--ple-/rns/holding-s--in-company/201511091710031011F/

[cashmachine2] 10/11/2015 15:40

Amendment to the above with exact figures - sorry can't edit on my iPhone Well Baker Brothers made a mistake on the 9th with their holding announcement- it was 65,381,385 and not 35,381,385 and they reduced slightly yesterday to 62,631,385 and another 1M today bringing their total to 61,631,385Can't believe advisors are paid to check and they still get it wrong by a small 30m shares!!!Mr_Dross - 10 Nov 2015 - 08:48 - 9242 of 9258 - 1heres why the share price is still subdued , things will change one word .. opertunityHttp://www.investegate.co.uk/plethora-solutions--ple-/rns/holding-s--in-company/201511091710031011F/