OptiBiotix Health PLC (LON:OPTI) Chief Executive Officer Stephen O’Hara caught up with DirectorsTalk to discuss their new strategy and what this will mean for investors
Q1: Now this morning we saw an announcement relating to OptiBiotix’s strategy, can you tell us the thinking behind this?
A1: Yes, certainly. The Board has been really pleased with the progress of OptiBiotix since listing, we meet a tremendous scientific, commercial and in course investor progress with the increase in the share price, we’ve also brought out our technology platforms and built up extensive amounts of IP, about 45 patents to date and we’ll have more to come, and we gained 6 commercial deals. Now importantly these commercial deals provide income which makes a contribution to running costs and also they create routes to the markets which would lead to future royalty streams. So as a company, we have money in the bank, we have extensive IP which will capitalise on our first move advantage in a microbiome space, we’ve early income and we have industry acceptance of our technology by global corporates. One industry expert described OptiBiotix as in a golden position in the microbiome space and it’s attracting interest from agriculture food and farmer so that raises the question if we’ve done so well in the last 18 months or so how can we continue our growth and maximise the return for shareholders to exploit this golden position that the industry experts describe us as being in. So the Board believes that the value that we’ve created in each of our divisions isn’t immediately transparent to shareholders and more importantly the sum of the value of it’s divisions is probably greater than the whole so we felt that the best way of maximising shareholders value would be to adopt this strategy where each individual division could be separated into a legal entity and in due course take in to the public market as a separate listing. So I want to make it clear to shareholders that this really is a strategy that is designed to build on our growth to date and to realise the global value in each of our divisions which we feel is not currently being realised.
Q2: So what does this mean for the investors?
A2: So the RNS reflects an industry strategy that is often used to realise the global value in parts of the company which is not realised in the whole. So examples include Racal who spun off Vodafone and Chubb back in the 80’s and everyone realises that Vodafone and Chubb have gone on to be large companies in their own right on the stock markets and of course more recently we had the listing of Paypal from Ebay so Paypal was spun off from Ebay a year or so ago. Now typically when companies spin off divisions, shareholders receive stock in the new company which is proportional to their holding in the parent company at the time of listing so what this will mean in practice if we list a separate division is that this gives shareholders a position in both companies, in the parent company and the new listed company. In the event of such a listing our intent would be we would describe the mechanism and give shareholders more detail and this would be through a separate RNS so the current RNS is merely telling people about our strategy and the rationale behind it, as we go forward and we identify the market opportunity for the divisions, we will issue a more detailed RNS on the mechanism and what it means for shareholders.
Q3: From this then, when would we expect to see listings begin to happen?
A3: In terms of the next few months, now clearly we can’t give any timings on a listing because that is market sensitive and if you look at the markets as they currently stand it’s important that we time any listing appropriate to the market conditions in the coming months and it’s important to put the right team in place to fully exploit the opportunity to add shareholder value. In the interim period we’ll continue to build value within each division by advancing our platforms, filing new IP, exploring the licencing and acquisition opportunities for each division and of course closing out ongoing commercial discussions. So the aim is to continue building each division such that if a listing occurs we can maximise the value to investors who are holding shares in OptiBiotix at the time of any listing so we’ve got no detailed plans for a listing in the very short term but we’re monitoring the markets and when the opportunity is right we will make an appropriate announcement and list.
