To quote from yesterday's (14th June) ASX announcement:
"Under a planned 'spin-off' process, BioPharmica shareholders would receive a free $0.20 share in Cortical Dynamics for every listed BioPharmica share that they hold on 15th July 2007...."
No wonder BPH rocketed yesterday from 0.085 to 0.145.
I am utterly confused by this announcement: how does a company raise money for a spin-off by giving away a share in a new entity which has a face value greater than the value of a share unit in the parent?
And what signficance are we to read into the drop in price by a significant holder in BPH (GBA - Grandbridge Limited, which co-released the announcement) down some 15%?
I've been looking for a typographical error in there somewhere, but haven't seen it unless I'm dyclesix, err dyslecix, I mean dyslexic.
Comments appreciated: I hold some other small in holdings in biotech companies and I have an interest in the sector; I'm tempted to jump into this one, but I just don't get it.