IMO the BOD is Properly Incentivized to Make the Right CallMy belief is that we have good evidence that the existing management, and more importantly the existing Board of Directors (who make the decision re. accepting an offer or not), should be trusted to make a reasonable decision as regards a buyout or partnership offer. They alone will have the full information with which to make such a judgement. Also, based on their combined shares and options (which I summarize below) they have great incentive to consumate a deal if a reasonable one is on offer. They also would be aware of the risks and benefits of a partnership offer versus a buyout. I also believe they would make use of knowledgeable and experienced third parties to arrive at a decision.
I continue to maintain that as long as the data from BRACELET is positive, and as long as there are multiple interested potential partners or purchasers, the offer should be a reasonable one and it should approach fair market value. Beyond that I feel it is personally counter-productive to sweat the details or worry about hypotheticals. What the Insiders have at Stake (from my January 19, 2023 post): This is a collation of some earlier posts of mine showing the incentive the insiders have to achieve a good buyout price.
From SEDI (sedi.ca) we determined that management and the board of directors have the following shares and options in ONC/Y:
Management
1. Matt Coffey has 96,333 common shares and 1,354,631 options
2. Kirk Look has 45,028 common shares and 815,262 options
3. Thomas Heineman has 11,000 commonshares and 425,000 options
4. Andrew de Guttadauro has 10,315 common shares and 563,157 options
5. Allison Hagerman has 4,200 common shares and 507,683 options
Board of Directors
1. Wayne Pisano has 189,941 common shares and 83,420 options
2. Deborah Brown has 48,948 common shares and 65,263 options
3. Bernd Seizinger has 314,863 common shares and 65,263 options
4. Angela Holtham has 124,238 common shares and 65,263 options
5. James Parsons has 45,000 options
6. Jonathan Rigby has 45,000 options
The value of these insider held shares and options depends on the following:
a) number of fully diluted shares outstanding. As of September 2022 the fully diluted shares were 64,388,508 which includes the options of the insiders. This represents 7.6% of the company.
b) buyout price. I used a buyout price of $2,000,000,000 USD although a higher price is possible. Use whatever buyout price you are comfortable with and multiply my results by that factor.
At the $2 billion USD buyout price and 64,388,508 total shares the insiders shares and options are worth the following in USD:
MANAGEMENT
Matt Coffey. $45,069,036
Kirk Look. $26,721,849
Thomas Heineman. $13,542,789
Andrew de Guttadauro. $17,812,868
Allison Hagerman. $15,899,825
BOD
Wayne Pisano. $8,490,987
Deborah Brown. $3,547,559
Bernd Seizinger. $11,807,262
Angela Holtham. $5,886,175
James Parsons. $1,397,765
Johnathan Rigby. $1,397,765
The weighted average excercise price of the outstanding options is around $2.57 USD per option (from the Q3 2022 Financial Report). Therefore you can easily calculate the cost of exercising these options for each insider. The cost is not much given a purchase price in the billions.
If you think a realistic buyout price is more like $4 billion, $6 billion, or $8 billion, etc. then multiply my insider amounts by a factor of 2, 3, or 4, etc. The insiders have a lot to gain and they will be highly motivated to maximize shareholder value.