A Pair of Buyout Offers Leads to Over 100% Upside for Shareholders

Usually investors have to get lucky with buyout offers out of the blue. Today's small cap market is so out of whack that there are two existing proposals on the table that offer significant upside if investors buy in today. Both stocks have gone up since their announcement, but have a lot more room to go and are prime targets for a bidding war. They are Banxa Holdings Inc. (BNXAF) (BNXA.V) and Theratechnologies Inc. (THTX) (TH.TO).  If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1036 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.  

The first one we are going to talk about is Banxa. We need to mention that Banxa's Founder Dom Carosa is also the President and Chairman of Blockmate Ventures Inc. (MATE.V), a stock that we remain very bullish on with a $5.00 long term target. The implications of buyer interest on Banxa supports a bullish case on MATE too. 

To avoid any confusion, BNXA is most liquid on its Canadian listing and the offer is in Canadian Dollars. So any reference to prices for it is in CAD. THTX is most liquid on its U.S. listing and the offer is in USD. So any reference to prices for it is in USD. 

BNXA spiked as high as $0.84 on Tuesday before settling at $0.72 today after the announcement of a buyout offer from Mr. Khurram Shroff between $1.00 and $2.00 per share. The price level now represents a great entry point as we think it's only a matter of time before the stock trades well over $1.00 as rumors heat up of a bidding war. BNXA already had a buyout offer on the table at $1.69 from Exodus Movement, Inc. (EXOD) before letting it expire as well as a take private offer that was since terminated. We view both of these transactions as opportunistic as the take private offer was at a low price and the Exodus buyout offer had a short deadline to acceptance. This one looks to be more serious and well thought out and should be a winner for investors getting in at these prices. 

The press release from the bidder:

"The company backed by renowned crypto and blockchain investor, Khurram Shroff, announced today that it has submitted a letter to the board of directors of BANXA Holdings Inc. (TSXV: BANXA.V). It expressed intentions to acquire 100% of the issued and outstanding shares of the company. The company proposed a purchase price in the range of $1.00 to $2.00 per share.

This offer represented a 100% to nearly 400% premium over BANXA’s closing share price of CAD 0.51 as of last week.

Acquisition to Benefit Shareholders

The letter signals a serious and friendly offer with the goal of engaging in meaningful discussions with the board and management team of BANXA Holdings. The Khurram Shroff-backed entity believes that the proposed acquisition would unlock significant value for shareholders. It could enhance long-term strategic growth and leverage synergies between its digital asset ecosystem and BANXA’s on-ramp infrastructure.

The investor group, headlined by Khurram Shroff, consists of strategic financial investors based primarily in the Middle East. They are highly reputable investors with a proven track record of successful transactions and value creation in the crypto sector. 

Shroff is a serial entrepreneur and the Advisor to 3iQ, the first Bitcoin ETF in the world. He comes with over a decade of experience in the blockchain industry and always promotes innovative projects.

The group possesses substantial financial resources, strategic insight, and operational expertise. Their collective experience and strong financial backing underscore their ability to execute this transaction efficiently. It can certainly enhance the long-term value of Banxa.

Acquisition to Benefit BANXA?

BANXA Holdings (TSXV: BANXA.V) is a publicly traded company. It provides a leading global payment infrastructure for the crypto economy. The acquisition would position the company within a larger, forward-thinking digital finance ecosystem. It will strengthen BANXA’s long-term outlook through added investment and strategic alignment.

“BANXA has demonstrated strong potential in the digital payments and Web3 infrastructure space. We believe our offer is both generous and in the best interest of BANXA shareholders, and we are eager to enter into constructive discussions with the Board,” said a spokesperson for the acquiring company.

The company currently operates in Australia, Europe, and North America. It is helping crypto enthusiasts buy cryptos and NFTs swiftly. Banxa users can buy cryptos and NFTs directly with fiat currency. The process is straightforward, and therefore, Banxa has drawn admiration from many users and experts. 

The proposed transaction is expected to be financed through a combination of cash and equity. It is not subject to a financing condition.

About Khurram Shroff

Khurram Shroff is one of the earliest and most influential crypto investors in the Middle East, Asia, and Africa. Referred to as the “Arab Whale,” Khurram has been recognized globally for his visionary investments in blockchain, AI, and fintech. 

The UK Parliamentary Review Power100 featured him as one of the most influential Muslims in the world. He is an active supporter of initiatives advancing Web3, decentralized finance, and AI for good."

The bid came with a very wide range between $1.00 to $2.00. It was likely offered with that range to get the conversation started before a more definitive offer is made. This approach makes more sense than the coercive or lowball tactics of the previous bids. Shroff mentioned that this offer is serious and friendly, so we expect the stock price to move up as the market digests it and talks advance. As this is the third offer on the company in a few months, we think it's only a matter of time before there is a bidding war. $2.00 might be the start, not the ending price here. Exodus didn't play by its hardball tactics because it plans on easily giving up. We think it's likely that it enters back into the running with a revised bid and more reasonable timeline. Especially if the more friendly tactics from Shroff leads to a positive response from BNXA. 

That leads us to THTX next. It increased 46% today to $1.94 after the announcement of a buyout offer from Future Pak:

"Future Pak, LLC (“Future Pak”) today announced that it has submitted two formal proposals since January to acquire all outstanding shares of common stock of Theratechnologies Inc. (“Theratechnologies”) (NASDAQ: THTX). The most recent proposal, which remains open for consideration by Theratechnologies and its Board of Directors, offers a cash consideration of $3.51 to $4.50 per share.

The proposal represents a total enterprise value of up to $255 million, comprising:

$205 million in cash at closing, and

Up to $50 million in contingent value right (CVR) payments, including:

50% of the annual EGRIFTA® franchise gross profit (defined as net sales minus cost of goods, per U.S. GAAP) above $30 million annually for three years post-closing.

A $10 million one-time milestone payment if cumulative EGRIFTA gross profit exceeds $125 million over the same three-year period.

This offer implies a 164% to 238% premium to Theratechnologies’ closing stock price of $1.33 as of April 10, 2025.

“To move this process forward efficiently and deliver compelling value to Theratechnologies’ shareholders, we have submitted multiple offers outlining a flexible and attractive framework,” said Nirav Patel, Chief Growth Officer at Future Pak. “We believe this proposal provides significant upside and a solid foundation for constructive dialogue, with the goal of achieving a mutually beneficial transaction.”

Despite repeated outreach and the submission of two detailed proposals—each offering a premium of more than 100% over Theratechnologies’ trading price—Future Pak has received minimal engagement from the company to date.

Future Pak confirms that the transaction would not be subject to a financing contingency and has the full support of its strategic financial partner, Colbeck Capital Management.

Future Pak has engaged Bourne Partners Securities LLC as financial advisor and Honigman LLP as legal advisor. Given access to standard due diligence materials, Future Pak believes it could reach a definitive agreement and announce a transaction within four to six weeks.

By publicly disclosing its interest, Future Pak hopes to encourage Theratechnologies shareholders to engage with the proposal and ensure that the Board fulfills its duty to pursue the highest value outcome available."

Future Pak stated that this was a follow up to a previous offer, but this time around it is going public with it in order to engage shareholders, presumably to try to force the Board into a public response. At $1.94, the bid offers a minimum 81% upside, with another dollar per share tacked onto that should the contingent value rights successfully pay out. 50 million shares traded in the United States and Canada on Friday. That is more than the entire float. If there are investors who want to get this deal done, they can easily buy up shares on the open market and influence the decision. Unlike BNXA, THTX has enough liquidity. THTX adopted a shareholder rights plan many years ago that we believe is still active. But that only prevents an organized group of people from attempting a hostile takeover. Individual activist shareholders are free to buy up shares on the open market and push for the deal to get done. However, based on the quick response from management, they may not need to fight too hard to make money. 

THTX ended up responding to the offer after hours on Friday:

"Theratechnologies Inc. (“Theratechnologies” or the “Company”) (TSX: TH) (NASDAQ: THTX), a commercial-stage biopharmaceutical company, wishes to address its shareholders in response to a press release issued today by Future Pak, LLC (“Future Pak”) regarding its proposals to acquire the Company.

The Company believes its shareholders should be aware of the following:

In August 2024, the Company received a first unsolicited non-binding proposal from Future Pak to acquire the Company. The proposed closing cash consideration of US$100 million was not attractive to the board of directors of the Company (the “Board”) and the proposal was rejected by the Company.

The Company received a second unsolicited non-binding proposal from Future Pak in January 2025, which could not be entertained as the Company was under exclusivity with another potential acquiror (the “Potential Acquiror”).

The Company did not immediately renew its initial exclusivity period with the Potential Acquiror upon its expiry, in an attempt to enter into a customary non-disclosure agreement with Future Pak containing a typical standstill undertaking in order to discuss with Future Pak under normal rules of engagement. Future Pak’s initial position was that it would not sign such an agreement unless they were provided exclusivity. When Future Pak was finally prepared to sign a non-disclosure agreement, the Company had already renewed exclusivity with the Potential Acquiror. At this time, Future Pak was informed that it would have a future opportunity to engage with the Company.

The Future Pak non-binding proposals have been made without Future Pak having completed any due diligence on the Company other than publicly available information.

The Potential Acquiror has performed extensive due diligence on the Company and the parties are negotiating a definitive agreement relating to a potential acquisition of all outstanding shares of the Company. Based on the Company’s discussions to date with the Potential Acquiror, in the event a definitive agreement is entered into with the Potential Acquiror, it will contain a “go shop” provision allowing the Company, for a limited period following signature, to engage with other potential acquirors, including Future Pak."

The stock was up after hours, but we think the real action will be on Monday morning when the market has had time to digest the implications of this response. Future Pak going public with its offer forced THTX to admit that it was already in buyout talks with another suitor. THTX is now in the middle of a bidding war. This is no longer up for debate. If and when the other Potential Acquiror signs an initial deal, that is when Future Pak will have the opportunity to make a move during the go shop provision. Even with the shareholder rights plan, things could get very interesting with respect to open market buys as various suitors maneuver their way in order to be the winner. 

We have three targets on each stock. The low end of the existing bid proposals, the high end of the existing bid proposals and a third target that is our estimate should either company get into a bidding war. 

We think BNXA could fetch $4.00. It has gotten three offers between $1.00 to $2.00 in the last several months. It isn't getting those offers because the buyers think it's worth only $2.00 and aren't willing to pay more. We already mentioned that we don't think Exodus is done here and that this latest bid could entice it back into action.

We think THTX could fetch $7.00 in a bidding war. Future Pak has already substantially increased its offer from $100 million last August to $205 million today plus $50 million in CVR. THTX management has also disclosed that Future Pak continues to sniff around even when it tries to throw its weight around and get THTX to play by its rules. Going public is actually a sign of desperation because it wanted shareholders to be on its side. But now everyone knows there is an alternative bidder who is much further along in the process. A final price tag of around $350 million appears reasonable given that context. Both of these companies offer investors and traders significant near-term upside, so we suggest to watch both of them closely. 

Disclosure: We are long BNXA.V, THTX