Hi all,

I'm new to this and invest mainly on the fundamentals of a company. I am slowly learning some of the charting side (still a bit sceptical) and would appreciate any views on Skyepharma, a share I have a fairly large holding in, from a chartist perspective

RNS re Innovata looking at merger not a takeover - shares off 17% on the news

Innovata Plc
24 November 2005


24 November 2005

Innovata plc

Response to press speculation


The board of Innovata plc notes the recent press speculation and confirms that
it is currently in early stage discussions with SkyePharma plc regarding a
possible combination of the two companies.

It is emphasised that these discussions are preliminary in nature and there can
be no certainty that a transaction will be concluded. A further announcement
will be made as appropriate.

Big buys and sells i dont think anybody has clue what to do following yesterdays statement.

Strangely enough the price has settled at the value it should be if you take the pre rights issue price and allow for dilution......48p! All bets not necessarily off as Inovatta might still buy at 60p and one of the rumour mill pharmas might emerge like a white knight. No news and price will hold for a while before dropping and good news will boost price. Remember a lot of short term positions were opened on way up and might still need closing..

you can`t see the writing properly. It says `possible test of 38`

That is the lower red uptrend line. The lower blue line gives a resistance of 59.5

Quite surprised at renewed interest in this share as my take on it is as follows:-

1. No takeover/merger price drops below 48p
2. Merger 48p with some plus side
3. Takeover Innovata or similar 60p
4. Takeover big pharma (only speculation) 70p

Above 50p the risk/reward gets higher as most likely outcomes are 1&2 with 3 still likely and 60p is getting nearer so less reward. If you wanted to take over a co you would try to dampen down the share price first so news will be non commital at best for a while. So only hope for share price short term is takeover battle but remember the catalyst for all this activity was a 10 year low share price and as price rises this attraction wanes.The other thing to bear in mind is that mergers/takeovers can take months behind closed doors so the share price is likely to suffer if lack of news over an extended period.
Sorry to be a killjoy and I could be wrong!!!! Be careful out there.....

Ianwas

3 is a complete non runner in my opinion, if it was to be a tie up between SKP and innovata it would have to be structured as SKP taking out Innovata or a merger (but with Innovata mgmt being installed). Reasoning for this is the change of ownership clause SKP has in some of the contracts with the pharma partners it already has