Q: I have a small position in this company and a long term time horizon.
Looks to me like a good candidate to either go private or be bought out.
Am I way off the mark on this.?
Thanks John
Looks to me like a good candidate to either go private or be bought out.
Am I way off the mark on this.?
Thanks John
5i Research Answer:
It is always diffiuclt to speculate on which company would be acquired or go private, as the uncertainty is always quite high and many things can prevent a takeover (such as management egos!). That being said, RX looks like a promising candidate for the proposal given its attractive cash balance of around 20% of its market cap and a “royalty-like” business model. We would advise not to invest in a company JUST on the possibility of a deal. There are hundreds of deal rumours for every one completed. Insiders own 14% and FAX Capital owns 18% so any deal would need to appease these two groups first.