A potential takeover is always a possibility given the upcoming disruption in the health services sector and growing understanding of the potential of artificial intelligence. This is why I previously expressed my thinking that it would be advantageous if Alcidion could persuade a big brother with a very long investment horizon to come on board (akin to the arrangement between Washington H Soul Pattinson and TPG telecom). A party who brings the necessary credibility and financial power, if and when extra capital is required for strategic business operations without tapping the debt or retail capital market.
In terms of Veritas, it would be very brave of them to flag a potential takeover, given Alcidion has not yet achieved hit any sixes on a consistent basis and that this is the first broker report on Alcidion. Accordingly, I would expect it to be pretty conservative in the underlying assumptions and language used. Even so, the target price is still significantly higher than the current share price.
Another part of me considers that a takeover (a backdoor reverse takeover) has already occured when Alcidion acquired MKM Health. To me, it was, in reality, more of a MKM Health management takeover of Alcidion. In effect, Alcidion needed MKM Health more for its customer base, immediate revenues, customer base and etc. I think my thinking is partly supported by the composition of the current Alcidion management team.
ALC Price at posting:
4.0¢ Sentiment: Buy Disclosure: Held
