Investors are far from overwhelmed at the agreement to sell Plethora Solutions (PLE:AIM) to a Hong Kong-based life sciences investor, despite shares leaping 136.3% to 6.4p on Wednesday morning.
Regent Pacific’s (0575:HK) £102.9 million takeover is not the deal many of Plethora’s investors had been expecting.
The target company has secured regulatory approval to sell premature ejaculation treatment PSD502, which could treat 45 million men across the European Union’s 28 countries alone. Broker Hybridan estimates that the spray could generate £48 million in sales, based on a launch across just five countries.
So investors not receiving any cash in the 12.5p a share all-share deal appear disappointed that a better offer did not arrive.
The deal is a 354.5% premium to Tuesday’s 2.7p a share closing price, yet the shares have risen nowhere near as high in early trading.
If the deal is agreed then many could dump their shares in the Hong Kong group when their shares start trading.
Regent Pacific’s rationale for buying Plethora is to bring the expertise of the two businesses together under one roof. The Hong Kong investor also believes that its cash will speed up PSD502’s route to market.