Ann: Trading Halt, page-30

If the AFR report of a CR is true, it may seem a little confusing, but I have a few theories. I would expect them to release the results of the CR at the same time as the P2b trial secondary endpoints/results.

It seems odd that they would seek to raise $50m at a big discount without revealing the trial results first. If I were approached to take part right now I would want to know the results. If PAR disclose that information, or even hint at it, they are in breach of continuous disclosure. But let's face it, we know how things work in the real world, especially where markets, pharma and big money are involved. So I can't imagine any investor would want to take part in the CR @ $1.50 without a nod and a wink that they're on a winner, especially given the recent share price volatility.

It could be that PAR are trying to avoid a repeat of their last results announcement on December 18 when the share price hit a high of $2.15 on good results, and was trading at 92c a week later, by getting more long-term investors on-board rather than leaving the share price to the mercy of the vagaries of the market again and short term profit taking.

There are a number of reasons why they might do this, but one of the obvious ones is to avoid being swallowed up by a predator just as they are on the cusp of greatness. The last thing any of us wants is another good results announcement followed by another share price plunge, which any predator would be watching for and ready to pounce on - this time with more certainty about the success of the company.

PAR have also made clear that they are "deal ready" - even as recently as their last presentation a few weeks ago. A stronger balance sheet would put them in a stronger negotiating position with any partners.

Why the big discount? It depends on how you calculate this. $1.50 might seem like a big discount on the last traded price, but the VWAP of the last 30 days is closer to $1.60. PAR was trading below $1.50 less than a month ago. Either way, institutional and sophisticated investors would want some kind of risk premium prior to the official release of the results. The CR should put a floor under the share price at $1.50 at the very least.

It could also simply be that the results are not so fantastic or clear and they need to fund further trials before they can close a deal with a partner. But then, I would think anybody who took part at $1.50 would want some guarantees now, and PAR would have a lot of explaining to do if the SP plunged again on Monday, not to mention a loss of credibility in the investment community for any future CR.

So it looks to me like they are shoring up their balance sheet AND their share register in anticipation of the next leg of their journey, putting themselves in a better negotiating position with partners and protecting themselves at a vulnerable point in that journey. In which case I wouldn't expect a SPP to be offered to retail investors, and I wouldn't expect much of a pullback, if at all. If the CR is oversubscribed, any pullback will be hoovered up by more long term investors, shaking short term traders out.

Of course, all the above is pure speculation and it could all be wrong. I guess we will have a clearer picture on Monday at the latest. As always, DYOR.