I would much prefer a buy in to a buyout, and I believe it could be every bit as profitable for the company that buy's in. Here's the way I envision it.
A big Pharma or Biotech could purchase perhaps 30% of the total shares of OWCP, equally divided between existing shares and newly issued shares at say $3 a share, current owners would have the opportunity to tender their shares at that price. This buy in would provide the company with all the money they'd need to pursue the clinical trials they plan to pursue, and would also provide them a worldwide partner for the manufacturing, distribution and sales of their product.
For the buyer, as products were developed and put on the market, they would profit directly from sales, but their profit would greatly be enhanced by the increase in share price of OWCP which we'd all share with them. For all intents and purposes 30% ownership would give them control of the company as they would get one or more seats on the BOD, but also should the shareholders be called upon to vote on an issue, it would be nearly impossible to defeat their position.
In short if they rode the share price of the company from $3 to say $100, they would make far more in ownership of the stock than if they purchased the entire company up front at a price that was higher than $3, perhaps in the $5 to $10 range, which would have been necessary to accomplish that.
Roche has done this sort of thing several times, and in time acquired the entire company, and spinning it off again in a manner that was profitable to them, as well as investors. The history of Genentech had Roche do a buy in, then a buyout, then spinning them off again while maintaining substantial ownership, and then reacquiring them, and that's where it currently stands. Roche maintains Genentech under it's own identity, and in the future could easily spin it off again. I believe in every case shareholders did well, and Roche brought in more money than had they merely acquired Genetech and rolled them into Roche.
I believe if investors here think it over, they should support a buy in over a buyout.
Gary
A big Pharma or Biotech could purchase perhaps 30% of the total shares of OWCP, equally divided between existing shares and newly issued shares at say $3 a share, current owners would have the opportunity to tender their shares at that price. This buy in would provide the company with all the money they'd need to pursue the clinical trials they plan to pursue, and would also provide them a worldwide partner for the manufacturing, distribution and sales of their product.
For the buyer, as products were developed and put on the market, they would profit directly from sales, but their profit would greatly be enhanced by the increase in share price of OWCP which we'd all share with them. For all intents and purposes 30% ownership would give them control of the company as they would get one or more seats on the BOD, but also should the shareholders be called upon to vote on an issue, it would be nearly impossible to defeat their position.
In short if they rode the share price of the company from $3 to say $100, they would make far more in ownership of the stock than if they purchased the entire company up front at a price that was higher than $3, perhaps in the $5 to $10 range, which would have been necessary to accomplish that.
Roche has done this sort of thing several times, and in time acquired the entire company, and spinning it off again in a manner that was profitable to them, as well as investors. The history of Genentech had Roche do a buy in, then a buyout, then spinning them off again while maintaining substantial ownership, and then reacquiring them, and that's where it currently stands. Roche maintains Genentech under it's own identity, and in the future could easily spin it off again. I believe in every case shareholders did well, and Roche brought in more money than had they merely acquired Genetech and rolled them into Roche.
I believe if investors here think it over, they should support a buy in over a buyout.
Gary
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