RE:RE:RE:Conflict of Interest!15% would be my ballpark guess for something approaching fair. It could be a bit higher or a bit lower though (say +/- 3% ?). It might not seem like that big a deal but the difference between say an 88/12 split vs a 82/18 split for Holdings is (from the current fully diluted baseline of 56 million shares):
12.3 / 68.3 = 18%
7.6 / 63.6 = 12%
About 4.7 million shares (at the current price of $4.50 is 21 million), definitely significant enough for the accountants & lawyers on both sides to haggle over a long time.
My layman's perspective for arguments in:
Holdings' favour (giving Holdings shareholders higher than 15% of the amalgamated company):
- ATE will have to do another raise halfway through phase III if they're not bought out / partnered
- Staying with the status quo of the original setup had benefits to Holdings shareholders, so they should be compensated for losing those benefits (probably helped prevent a hostile take over by big pharma just to shut them down, probably protects Holdings against incompetent ATE management getting sued)
Antibe's favour (giving Holdings shareholders lower than 15% of the amalgamated company):
- ote-Naprox-e-sul might fail and not pass phase III (then they're arguing whether that's a 5% chance or a 10% chance or a 15% chance)
- liquidity - the fact that Holdings shareholders would not receive royalties until 4-ish years from now, should discount them from 15% now (I guess they could do a lock up for 4 years)
- the fact that Antibe has IP that was not covered under Holdings initial patent (not sure if that's the new IBD drug that was speculated awhile ago from Matson out of Virginia Tech)
There's probably a ton of other random arguments for both sides (and then shadings of how much to weight each) that I can't even conceive of (thoug I'd guess it'll be lower than 15% and 10 million shares to Holdings).
If IR is saying they expect an agreement in April, it might just mean that instead of Holdings arguing for 18% and Antibe for 12%, maybe they are relatively close (Holdings arguing for 13.7% and Antibe arguing for 13.3%) that they expect to meet somewhere in the middle relatively soon.
StockingUp21 wrote: if this was simple as 15% at any point then shoukd not be very complicated.
CalgaryATE wrote: Holdings' 15% royalties is worth 15% of the amalgamated company no matter what the current share price. Holdings will get about 10 million shares (10/66=15%), while ATE shareholders will retain 56 million shares (56/66=85%). Why would the current share price affect how the royalties (profit for simplicity's sake) be divided up?
JPkatz wrote: So who's side is Dan going to be on in this amalgamation? The side he and Wallace own a combined 50% or we the dumb retail holders? I think anyone with half a brain can answer that and we as shareholders can be expected to get to get raked through the coals once again no doubt... No wonder the downward trend and lack of buying interest as smart money is waiting for this charade to play out!!