Jul. 13 at 2:25 AM
$VXRT @SlaveLifeAllLife
I promised a response and offered a hurried one after the fabulous tennis, I have decided to share a more compelling and accurate one to main board to aid understanding for all around a critical piece of detail of the potential buy out process.
Respectfully, there are several misconceptions here worth clearing up.
"We retails need to approve the transaction"
This confuses a merger vote with a tender offer. In a tender offer, there is no shareholder vote. Sanofi goes directly to each shareholder and says "we'll buy your shares at
$X." You individually decide whether to accept. Under Delaware law (DGCL §251(h)), once the acquirer reaches 50% + 1 share through the tender, they can complete a back-end merger converting ALL remaining shares at the same price — no additional shareholder vote required. Retail doesn't "approve" anything. You either tender or you don't. That's your only decision.
"It cannot offer
$10 or
$20 for a stock trading at
$0.54"
This misunderstands how acquisition prices are determined. The offer price has nothing to do with where the stock is trading. Under Delaware law, the target company's board retains an independent investment banker who produces a fairness opinion using four standard valuation methodologies:
• Discounted Cash Flow (DCF) — the most heavily weighted methodology. Projects the company's future free cash flows over a 10-year forward horizon, risk-adjusts them using WACC, and discounts them back to present value. This captures the full value of BARDA contracts, pipeline potential, and platform economics — not the current stock price.
• Comparable Company Analysis — valuation multiples from similar publicly traded companies
• Precedent Transaction Analysis — what acquirers have paid for similar assets in recent M&A deals
• 52-Week Trading Range — market reference providing context, not a valuation driver1
The independent banker produces a valuation range using all four. The board then negotiates with the acquirer within that range, bound by Revlon duties to maximize shareholder value. The current stock price is an INPUT to exactly one of the four methods — and it's the least important one. DCF dominates the fairness opinion, and DCF doesn't care that the stock trades at
$0.54. It cares about risk-adjusted future cash flows over the next decade.
When your company sits on a
$345M active BARDA contract with a billion-dollar platform solicitation pending, the DCF output bears no resemblance to the current trading price. That's the entire point.
"Normal premiums are 50%-200%"
That range applies to normally-valued companies where the stock price already reflects intrinsic value. VXRT is not normally valued — it's a sub-
$100M OTCQX stock with a massive dislocation between trading price and asset value. The independent banker's DCF doesn't calculate a "premium over market." It calculates what the assets are actually worth. If that number is 20,30, or
$45, the premium over
$0.54 is whatever it is. The math works forward from cash flows, not backward from the ticker.
"They'd have to push the price higher first"
This is exactly backward. In a tender offer, a suppressed stock price is a FEATURE, not a bug. Lower price = higher perceived premium = every shareholder tenders immediately. If VXRT were trading at 8, a 12 offer is a 50% premium and you'd have holdouts. At 0.54, a 12 offer is a 2,100% premium and everyone clicks accept before finishing their coffee.
The acquirer doesn't need to push the price up. The offer IS the price event. And the price is set by the independent banker's DCF and fairness opinion — not by where the stock traded last Friday.
