"But Cellmid’s board has the answer to please both camps: within two years the company plans to demerge its clinical program, probably as a private entity funded by venture (or similar) capital."
"But beyond this statement of intent, no firm decisions have been made on how the bifurcation will be executed."
"For investors that prefer the clinical side, it’s not clear at this stage if they will be allowed any ongoing exposure to that part of the business."
My interpretation of the above quotes is that the favoured form of demerger will see the Midkine business remaining private but not as a Cellmid subsidiary.
A (venture capital) partner will purchase part of the Midkine business and both fund and take responsibility for managing its ongoing operations. Since the business will not be separately listed Cellmid shareholders will not have direct exposure through share ownership. Rather, current shareholders would retain an indirect interest through Cellmid’s part ownership of the demerged business.
This arrangement would allow the listed company to progress as a clean consumer health business without the current internal capital confusion.
One issue material to current shareholders would be the terms of the partnership arrangement, including whether a cash lump sum is involved and if so the amount. A complete sale would still be a possibility.
All IMO
T7
CDY Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
