Argonaut AGNT
May 09, 2005 - 4:30pm EST by
2005 2006
Price: 0.91 EPS
Shares Out. (in M): 0 P/E
Market Cap (in $M): 19 P/FCF
Net Debt (in $M): 0 EBIT 0 0

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I'll make this very short, and very sweet. Argonaut is a liquidation offering a 8-20% return (management expected range .98 to $1.10) with most capital returned within three months or so. Liquidation will occur as soon as shareholders approve sale of most company assets to Biotage AB. The meeting will be held on June 1st, and management expects to pay out 70 cents in the first distribution to shareholders.

Risks are if the deal with Biotage falls apart. I don't expect this to happen, in fact midway through the process the deal was sweetened which indicates strong interest on the buyers behalf.

The main issue is that AGNT only trades around 100k shares a day, so this idea is probably more a morsel than a meal for most of you. There is potential upside in as AGNT's book value is well in excess of $1.10, so I'm hoping there is some management sandbagging going on. I'm also hoping that they are sandbagging on the 70 cent first distribution.

But assuming the first payment is July 1st for 70 cents, and that complete return of capital takes one year, the average holding period is 4.3 months and annualized returns work out roughly at 20% at 98 cents and 50% at $1.10.


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