In a buy out, the purchasing company will initially neogtitate with the BoD or engineer a hostile bid asking the shareholders to sell at some price. They must end up with more than 50% (unless there is some predetermined arrangement that I don't know about operates under Canadian Law, because I'm an unfortunate Brit with a large pond to look across) of the shares to own the company. They can, of course, influence with a lower shareholding. It behoves all shareholders to have clear idea of POET's valuation.

Previous posts, where I have enquired on share ownership and regulation, suggest the combination of the BoD and the lending companies own more than 50% of the shares in issue (I would like to confirm this with those members who clearly know much more than I do, such as FJ and others to whom I am most grateful for their DD). Thus, unless the BoD agrees to a sale and particularly if the retail shareholders join them, then there is no sale. The lending companies will have their own motives though none have shown an inclination to sell currently. Their position in an attempted buyout to quote Winston Churchill is "a riddle, within a mystery, wrapped in an enigma".

I believe this means a hostile bid is not likely to be easily achieved. A negotiated sale is the more likely avenue of approach, which makes sense. I believe I'm safe in saying that if you were to antagonise the scientific members of the company then you may gain a company but not quite all the technology you require. That would be less than satisfactory for the purchaser. In all this, the view of the scientists is likely to be heard and, if I know scientists at all, the intellectual achievment and kudos associated with successful completion will be very important; they will not be just governed, as I am, by financial considrations solely.

Upto the point where a partnership is announced, I believe, a bid is much less likely than the proposed strategy of using licensing. After the point of agreement, then power moves to the partners and the company will be more of a target. Once the partnership occurs, the scientists will have sold their intellectual rights and will be substantially less influential in the financial arrangements.

Thus, if my aforementioned thesis is correct, it suggests there is a danger point which arises with partnership announcement. Weighing that up: the share price will continue to rise over the coming months with the anticipated good news lined up (I do know at what rate). After the announcement of partnership, there will be hiatus until a revenue stream is declared in the quarterly returns. This point in time is likely to be in 3Q 2014. Watch, therfore, for the share price after that announcement, this will become a deeply disturbing exercise in patience.