Monday, May 29, 2023

POLXF Buyout Arb

 POLXF announced a buyout from BioSpectra last month 4/27 for $2.017 per share of common.  The stock sits at $1.74 which I think is too low.  16% just waiting for you to pick it up.

I've owned the stock since maybe 2015 and bought more over the years, mostly around a dollar.  I wrote it up in 2019 at $0.78 and bought some more around $1.70 right when the news broke.  I expect arbs to get within ~5% once people become comfortable and POLXF did just that before falling back down in the vacuum of information.  

In the buyout announcement they said the next step is an "interim order approving the deal from the Ontario Court of Justice. Following receipt of a favorable interim order, the Company will call a meeting of shareholders to obtain shareholder approval...If the Arrangement is approved by shareholders at the shareholder meeting, the Company will then seek a final order from the Ontario Court of Justice approving the Arrangement and authorizing its closing."  

They repeated the same info in the annual report on 5/1 but said nothing since then.  Stocks drop in the absence of news and the other day it went as low as $1.61 (25%!).  

I am holding my stock and waiting for the transaction.  It's my 4th largest holding now.  Of course I wish I had more but I'm glad I bought more as time went on.

I emailed investor relations the other day and just heard back.  I've emailed with them a number of times and it does help to develop a rapport.  Today they replied the interim order is done and shareholder meeting is scheduled for 6/14.  I'll be getting it all in the mail soon enough.  


--Dan

disclosure: long POLXF

10 comments:

  1. what do you think is the downside on this one?

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    1. well it'll probably drop back down under a buck if this deal falls through. It was at like $0.60. it's so small I feel like it'll go through

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  2. I could not find the plan of arrangement: is there a break fee? What conditions are there?
    share ownership: (i) Period end date January 31, 2023
    (iii) Issued and outstanding 3,432,478 shares
    (iv) Freely tradable shares (public float) 2,586,253 shares
    (v) Number of shareholders of record 205
    looks like many small shareholders.
    How many votes do the need?

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    1. there's not much information, hence the spread. I think that's just due to this being a tiny little company

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  3. I owned stock in Canadian company Neovasc. Shareholder Approval was based on the number of shares that voted, not the number of shares outstanding. Perhaps this is based on the Canadian Plan of Arrangement scheme. https://capedge.com/filing/1399708/0001104659-23-018504/NVCN-6K/file/3

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  4. Any advice on taxes, for a Canadian company owned by an American? I would guess in this case, it would be a capital gain, no withholding, for any American owning it, whether in a taxable or non-taxable account. Based on Barrick Gold. https://www.barrick.com/English/investors/return-of-capital-tax-faq/default.aspx

    I would like to buy more non-US securities, but worry about some unanticipated withholding, ruining things. Are there any easy, definitive online sources that advise on this for various countries?

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  5. Any ideas on the final order or when this one’s closes? I haven’t seen anything yet.

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    1. last estimate from the company I saw was money coming to shareholders next week I think

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