EXAMPLE: ADURO ALL STOCK DEAL FOR ADXS.....
Just toss out a hypothetical of how it "might" work, and end up with a much more "cash rich" company with a much more robust Listeria/other cancer immuno platform style company and w/ Aduro's already in-place connections, perhaps willing to fund/finish ADXS's key trials, etc
ADURO:
Market cap : $635 mil
Shares O/S = 77 mil or so
Price per share: $8.25 ea
CASH RICH w/ over $300 MILLION in cold, hard cash on-hand per last SEC filing....holy freaking cow, now you know why they're beating the sh$%t out of ADXS on market cap and share price....wowza...
SO, lets say they feel generous and toss out a $17 per share offer, ALL STOCK (a 5.66X increase over ADXS value today), to they don't touch that cash pile, for ADXS, which would value ADXS at a $700 mil market cap....eh....sounds reasonable to me....
ADRO thus would do the following:
Issue $700 mil / $8.25 each = 84 million new shares of common stock, bringing their total O/S share count to about 150 or 160 million O/S, not bad at all.
ADXS current O/S we'll just say is about 40 million
So each ADXS shareholder would get 17/8.25 = 2 shares of ADRO for each ADXS share they hold, and end up with a piece of a new company with a new market cap of:
$700 million + $635 million = $1.35 BILLION new market cap w/ approx 160 million shares O/S
ADRO has been burning about $30 mil a qtr. ADXS has been burning about $35 mil a qtr and if the two entities combined CUT THEIR DAMN COSTS, lets say they could get that down to $40 MILLION a qtr, for a larger organization.
They'd have close to $400 MILLION CASH, and if they CUT THE COSTS AGGRESSIVELY by eliminating duplicate programs/positions, they'd have TWO YEARS CASH ON-HAND w/o any problems. As opposed to ADXS less than ONE YEAR CASH LEFT at this point. It's a WIN IF YOU ASK ME.
If you owned say 10,000 shares of ADXS today at $3 a share (value of $30K)
You'd end up with 20K shares of new stock ADRO/ADXS at $8.25 ea w/ a
value of $165,000 (a 5.66X increase) which I think most would TAKE, RUN, and NEVER LOOK BACK.
New company would have $325 MILLION IN ADRO CASH + approx $75 MILLION in ADXS CASH = approx $400 MILLION CASH, and a bigger pipeline and better mgt if the ADURO folks took the CEO seat IMO.
ADRO has about 150 employees and ADXS has about 120 employees, a lot of that in R&D, so they could do a HEAD COUNT REDUCTION of duplicate positions and cut their costs, and extend that almost half $BILLION in cash they'd end up with....thus at least TWO YEARS CASH for the new combined "LISTERIA/CANCER IMMUNO" company....why the H NOT...????
I'd take it in a NY second...and run like Forrest Gump....
Oh..oh..AND ADURO has a Netherlands based unit/division already- that MIGHT take care of the ADXS EURO issues right there- it could be run through the ADURO Netherlands division, already in the EU. More synergy....less costs....why the H not????
HAT TIP TO hORNET DRIVER ON ADXS BOARD as this Post purloined from Hornet DRiver on ADXS board. Thanks HD!
