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Nice post! They had to go into a trading halt state because the...

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2,574 Posts.

4962

05/06/22

16:00

Post #: 61828684
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Originally posted by Taurean7 ↑

My understanding and expectations for tomorrow

It is clear that an Expert’s Report has been received which concludes that the Scheme is not in the best interests of shareholders. Otherwise the process simply would be continuing in confidence, without need for a trading halt, to the preparation and release of the Scheme Booklet, including the Report.

The obvious reason is that the Scheme Consideration of $0.115 represents significant undervaluation of ResApp, although that conclusion could be supported by the unfair nature of the Scheme itself.

Clause 3.1 of the Deed of Implementation defines a supportive Expert’s Report to be a Condition Precedent for the Scheme to be Effective. In its absence the Scheme therefore no longer is Effective.

Clause 3.4(c) would allow ResApp to waive this Condition and to proceed to the Booklet release stage. Had the BOD chosen to waiver, again there would be no need for a trading halt. If waived, the required Booklet then would contain a Report stating that the Scheme is not in the interest of shareholders. The result likely would be that the number exiting the subsequent shareholders meeting could be less than those who entered it.

The offered Consideration of $0.115 is one of the terms of the Scheme. Clause 18.1 states that ‘This deed may be amended only by another deed executed by all of the parties’. This implies that simply raising the offer price to possibly satisfy the Expert’s Opinion is not an available option.

It appears therefore that the Scheme is dead in the water.

If the Scheme no longer proceeds then there is no longer a requirement for a Booklet to be released containing the Expert’s Report. Its contents would be market sensitive only if they were to become known beyond the parties involved. I can think of several reasons why details of the Expert’s Opinion should be released tomorrow, but I don’t think it can be assumed.

The Pfizer licence agreement should be completely independent of the outcome of the Scheme proceedings. I doubt that Pfizer would wish to miss out on the lucrative potential that it represents. A potential that now should be partly quantified in the Expert’s Report.

IMO

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Nice post!
They had to go into a trading halt state because the independent expert report has been circling.. ResApp should have been sitting down with Pfizer to renegotiate the terms. The current scheme should be scrapped (if determined as being not a fair value by the independent expert) and no longer supported by the board which was as you stayed in one of the terms & conditions which was clear that if the independent expert report evaluation determined the price as being undervalued at 11.5 cents then it would no longer be supported by the board. A new scheme could be implemented based on the independent report price. In this case the board would be in support again off the price then I would see the process starting all over again..

Perhaps the other alternative could be that they are negotiating terms of a partnership agreement and scrapping the takeover offer entirely.

One of these two options seem logical to me however there is a slim possibility Pfizer could just walk away as well but I highly doubt this would be the case..

All just my thoughts and opinion..

All the best for tomorrow fellow shareholders

Cheers

Red bar

Last edited by Red bar: 05/06/22

RAP Price at posting: 11.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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