December 12, 2011

Every Rose Has Its Thorn

Every rose has its thorn
Just like every night has it's dawn
Just like every cowboy sings his sad, sad song
Every rose has its thorn

I have long been concerned about a tender offer for the company by an investor or investor group or big pharma for some, most or all of the company. Of course, the presumption on my part is that such a transaction would occur if there remained a dramatic gap between extrinsic and intrinsic values.

Management teams and companies can implement a shareholder rights plan, or poison pill, to combat unwanted tender offers.

In my diligence, I asked management if a poison pill indeed was in place at Provectus. There are two:
  • The first pill relates to limiting voting rights; and
  • The second relates to how management’s voting rights can be increased, if necessary.
Why are there two? Simply redundancy. "Leave nothing to chance."

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