4basebio: Plan to spin-off DNA business and UK listing

4basebio AG (4BSB.D. Market Cap €103m or £94m, €2.09, 4.0% of JIC Portfolio)

Good news, I think, from 4basebio this morning.

Conclusion: I think on the face of it this is good news. I think it will be far more attractive to UK shareholders for the DNA and Genomics business to be listed on AIM. It is important that the new entity is, as they say, “suitably capitalised”. However, even after that, shareholders will be left with a shareholding in 4basebio, which will have a “significant cash position”. The main question is, what are the plans for 4basebio with its cash? Will it be to take the business off in another direction or to return cash to existing shareholders? We will have to wait for more details but for now, given that there was little or no value in the share price for the DNA and genomics business, I think this should be read as good news. Happy Holder!

It announces that it intends to spin off its operating business, i.e. the DNA manufacturing and Genomics operations. The business will have its corporate seat in the UK and will be listed on AIM.

4basebio intends to retain a significant “minority” stake in the new entity whilst distributing the remaining shares to its existing shareholders. It says “As part of this process, 4basebio AG will ensure the spin-off is suitably capitalised from the existing cash of 4basebio AG. The management board of 4basebio AG would join the board of the spin-off and assume responsibility for the day to day operation of this organisation. As a result of the planned process, 4basebio AG would in addition to its participation in the new company still hold a significant cash position. The intention is to complete this core process by 31 December 2020.

The company will continue to keep its shareholders updated during this process.”

 

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