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Optibiotix - another step forward to the Skinbiotix demerger: buy/average down

By HotStockRockets | Saturday 8 October 2016

Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Optibiotix (OPTI) has announced the appointment of Martin Hunt as Chairman and Director of its majority owned subsidiary SkinBiotix Limited. Why does this matter? Because this unit will be spun off with a separate AIM listing well before Christmas. This is one of the last box ticking to do before formal confirmation of the process.

Hunt seems credible. The RNS states:

Martin brings a wealth of experience and a track record of success in leadership and strategic roles within the life sciences sector, spanning large multi-nationals, AIM listed plc's, early stage ventures and public sector roles. His experience at MDY Healthcare Limited, Videregen Limited, Oxford Medical Diagnostics Limited and his roles at the National Institute for Health Research give him that broad range of understanding of the wide ranging commercial and therapeutic area which SkinBiotix will be working in.

The shares have not reacted the "right way" slipping another few coppers to 66p-68p which we suspects frustration that we do not have more flesh on the bones in terms of how the demerger will create value for shareholders. They were in fact down at 62-3p when this update first appeared on HotStockRockets - sorry paying customers first!.

That frustration and ennui is understandable but when the news does come it will drive a major re-rate. We do not expect to have to wait very long and so we suggest averaging down and buying. We still expect to see 100p+ by Christmas.

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