RE: BusinessWeekly Prometic IPO articleI may be overoptimistic but I think this IPO is going to be a good thing for PLI. In my mind, there are two things that really dictate how positive this whole exercise is. First, what is the achievable market cap for the UK division ? Second, how much stock does the parent co get in Newco and what if any cash transaction is involved ?
Early indications (from Vincent Taillefer) have suggested that this division alone could command a market cap close to $50mm cdn. Realistically, the fact that they shelved the IPO thru the recent international equity market sell-off suggests to me that perhaps $50mm wasnt achievable.
That may still be the case if things develop correctly... CE Mark... Government orders etc... But lets conservatively assume its only $30mm cdn... Even at $30mm, we are still talking a huge chunk of the existing market cap of the parent co..... So if the parent company comes out with 40%-50% of the new co stock.... and perhaps a cash royalty of some kind... then our balance sheet improves, the parent will still share directly in the success of the UK division...and we have a solid asset that stands alone along with a substantial drop in overhead.
I know the blah blah blah objective of this whole exercise was to "unlock shareholder value" ... I honestly think its achievable in this situation. Its quite clear that institutions havent bought into the diversified portfolio that the parent company owns... They have demonstrated an interest to participate in one division or another.... and this is their first real opportunity.. and for that... they will pay more for the parts... which makes the "whole" worth more.
It will truly be interesting to see how this plays out... We all know this is a HUGE issue in Britain and Europe... If this thing gets some good traction... it could turn out to be an exciting IPO ...especially if we get some supporting developments and news flow.
Regardless.... I just like to see stuff happening... I think we are going higher short term