RE:Shareholder value???fossi_2002 wrote: When Gilles says in the annual report that shareholder value is at the top of his agenda, that is now demonstrably not the truth.
CZO's stock was $.23 the day before the merger. $.23 is $18 million market cap. Given it is a merger of equals with each group of shareholders controlling 50% of the new company that is equivalent to $36 million market cap for the new company.
AEZS had US$38.8 million cash at the end of the last reporting period and according to Gilles CZO had $10 million in cash at the presentation in October. That's C$62.24 million cash in total as of last report.
The new company will therefore effectively have a C$36 million market cap at C$.23 per CZO share with C$62.24 million cash as of last report. At C$.23 per CZO share it would be trading at 58% of the cash as of the last report.
If the new company traded at cash of the last report it would be the equivalent of C$.40 per CZO share.
The inflation adjusted upfront payment of US$24 million AEZS received from Strongbridge for its diagnostic would add another C$40 million cash. That ignores other potential significant milestone payments plus royalties, etc., for the diagnostic test. What AEZS receives for its diagnostic test remains to be seen; but Gilles is in the catbird seat as a Director of AEZS and should know the terms being discussed. H.C. Wainwright also has US$15 target price for AEZS which is equivalent to C$100 million market cap for AEZS. AEZS can also partner other of its pipeline assets and has discussed that.
In addition to the cash and upfront, and milestone payments from its diagnostic as well as royalties AEZS also has C$113 million in tax loss carryforwards.
The new company is expected to provide the capital and internal capability to fully finance CZO's near term revenue generating pipeline opportunities towards creating a long-term sustainable business.
Gilles Gagnon, Chief Executive Officer of Ceapro: “The transaction provides us with the additional capital and internal capabilities to fully support near-term revenue generating cosmeceutical and nutraceutical product development programs..." news release "The combination is attractive for shareholders of both companies, as it is expected to create a long-term sustainable business..." news release CZO could also receive significant upfront and milestone payments plus royalties for partnerships from PGX, to wound healing, to the avenanthramide pill, etc.
Ronnie Miller is "thrilled" with the merger and believes it is the best path forward after careful consideration. If CZO were to try to fully finance its path forward it could involve warrants and delays compared to this path in motion.
“We are thrilled with this exciting transaction to merge with Aeterna and combine two complementary companies and teams, in support of our plan to drive significant growth,” said Ronnie Miller, Chairman of Ceapro. “After careful consideration, we believe this transaction is the best way forward for Ceapro and our valued shareholders.”