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Biotech / Medical : Ethical Holdings (Ethcy) - seriously undervalued -- Ignore unavailable to you. Want to Upgrade?

To: molemania who wrote (314)	12/15/1998 11:06:00 AM
From: Joe Dancy	Respond to of 345

I would guess ELN did not just buy ETHCY for a couple of reasons. First, I think that the price that would be offered would be below what the ETHCY board would consider reasonable, especially since they had made representations a year before as to what they thought the company was worth with the London failed listing. If they accepted a dirt cheap offer it could result in some litigation, since representations were made that the London listing would be in a certain price range if I recall. Second, I would guess that as a non-owner with the right to convert ELN also avoids any class action litigation also - they will not be the deep pocket to pay off a class action claim against ETHCY for their representations that some have alleged were not accurate. As just a majority shareholder of ETHCY I don't think in theory ELN would be liable, but if ELN had control and operated ETHCY then it might be construed as a de facto merger of assets that could create liability. ELN would have to fight the issue anyway, this way they just sit on the sidelines and reel in the fish when they want to eat it - after the statute of limitations period expires or after the ETHCY stock price recovers. Joe