Sharesontoast has asked the big question which has been begging for an answer since the Frankfurt announcement. How will Close Brothers provide liquidity for PH7 on the Frankfurt Stock Exchange?
From the company announcement on May 18, 2010 we read "Phylogica has appointed Close Brothers Seydler Bank AG as a Designated Sponsor. The main task of Designated Sponsors is to provide liquidity for trading shares on Xetra."
Well, there are of course a couple of options. Obviously one key contender is for a placement of shares aimed at European institutional investors. In fact, one of the reasons that Nick Woolf has been appointed as a non executive director and consultant is to provide expertise in tapping the European equity markets.
A second interesting possibility has arisen in the past week. Lets say that you owned 12% of the share capital of a promising biotech company with IP which the Board says it would like to sell for over $200m within 24 months. For any number of reasons, however, you would like to divest all or part of your investment. There are two impediments; firstly, the stock is illiquid and secondly, you are a director which creates a potential conflict of interest in any negotiations to market the share parcel to a third party. What would you do?
Whether the new Board decides to create liquidity through a share placement or the marketing of an existing large parcel of shares, the net result will be a share registry which will have far greater depth, with deeper pockets to support a major corporate expansion.
PYC Price at posting:
6.9¢ Sentiment: Buy Disclosure: Held
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