When Plant Impact PLC (LON:PIM) put itself up for sale in December investors weren’t convinced a buyer would be found with the shares wilting from 21.5p to 5.88p by close of play Thursday.
The market doesn’t usually get these things wrong, which is why the last rites were being administered to crop research group.
Proving the miracles do occasionally happen, PI informed investors this morning it had found a buyer. Not just that, the acquirer was a top notch company willing to pay a significant premium to bag the business.
Croda to the rescue
Okay, chemicals giant Croda Group PLC (LON:CRDA) is still only handing over £10mln for PI, which is pocket change for a company valued at north of £6bn.
But it will have come as a blessed relief for investors who faced the prospect of possibly receiving nowt. PI was AIM’s biggest riser over the week as the stock shot up 71% to the 10p a share Croda is offering.
The junior market clawed back some of the ground lost over recent weeks as the AIM All-Share advanced almost 3%, marginally outperforming the FTSE 100.
It was a week of exits with Stadium Group plc (LON:SDM), the electronic components specialist, succumbing to a £45.8mln bid from TT Electronics.
The shares rose 43% after TT pitched its bid at a significant premium to the prevailing share price.
Tungsten joy
Sticking with the risers for a little longer, there was relief for the backers of W Resources after the mine developer secured the funding it needs to take its Spanish tungsten mine into production.
Those savvy enough to have bought the shares at the start of the trading week are now sitting on a 30% profit.
On the flipside, it was a tough week for investors in Tlou Energy PLC (LON:TLOU), whose shares retreated 38%.
The fall coincided with news it has been asked to retender its blue-print for a 100-megawatt power plant fuelled by coal bed methane. This, of course, is a setback for the business, as the tumble on the price attests.
That said, long-term investors are still very much in the money. And with small-caps such as Tlou, which could potentially be taking on a large capital project, some volatility should be expected.
In the doghouse...again
Perennially in the doghouse, Nighthawk Energy PLC (LON:HAWK) had another week to forget as it fell a further 24%. It is now worth just £3.5mln, or 0.36p a share.
A year ago the beleaguered oiler was worth 1.33p and in June 2014 it hit the heady heights of 12.75p. The ticking time bomb that has scared off even the most hardy speculators is the £15mln it owes and which needs to be repaid by the middle of this year.
Judging by the collapse in the value of Nighthawk over the past year (it has receded 73%), the market is ascribing long odds to a refinancing deal. On Wednesday the company said that chief financial officer Kurtis Hooley was quitting the business.
The life sciences sector can often be a graveyard for investors. That’s because the likelihood of success of drug candidate entering phase I clinical trials is 9.6%, according to the Bio Innovation Organisation, or just under 12% if the failure rates in the oncology sector are factored out of the equation.
In short you’d be better off spending your money at the local casino. However, once in a while a company comes along that defies the odds and provides a decent return for investors along the way.
MaxCyte...ing
A case in point is MaxCyte (LON:MXCT), where £1,000 invested at float two years ago would now be worth just north of £3,500. Not a bad payback. This is a hybrid business. So it generated sales of around £10mln last year licensing its cell engineering technology to some of the world’s largest pharma groups.
It is also using its platform, called CARMA, to develop treatments for cancer that incite the body’s own immune system to tackle the killer disease.
This year news flow (and by extension the direction of the share price) will be dictated by the success, or otherwise of MCY-M11, a potential cancer drug that co-opts the body’s immune system into confronting and killing the disease.
Having taken the opportunity to raise funds when the share price was buoyant it has the financial wherewithal to fund the first clinical trial of the treatment.