China Biodiesel Tender Offer and Delisting

And trust me, it is a tender offer.

After purchasing our initial tranche of 1,960 China Biodiesel shares back in July 2009 for 6.6 pence a share and topping up a short week later at 10.06 pence (yep that’s a 50% rise in that short week), we were averaged into CBI.L at 9.29 pence a share. And whilst the share price did go on to test 20 pence in August 2009, since then there’s been a lot of market apathy – time spent between 8 and 14 pence. Lately it’s split the middle of those highs and lows and has camped out around the 11 pence mark and to be honest unless there was some big news coming fast, the way things are, I expected nothing but a gradual slide from CBI.L over the coming months.

Here’s a few of the reasons we jumped on board with China Biodiesel in the first place. Though I may dress it up a little, my justification was almost purely chartist at the time. It’s hard for the risk craving (it’s almost a sickness) to watch a penny share go from 2 pence to 6 and not want to have a little taste of that action.

Anyway, back to the tender offer. It came in at 16.5 pence. And when all is said and done and everyone is paid up, China Biodiesel will be ditching its AIM listing. Here’s a little of the reasoning behind the decision:

The share price performance of the Company has recently been disappointing and a source of frustration for the Board. The Directors believe that the development of the business and its growth potential has not been adequately reflected in the value attributed by the public market to the Ordinary Shares. The Directors believe that the reasons for this under-valuation are multiple and complex, but principally include a lack of liquidity (common to many small cap companies) impacted by the structure of the Company’s share register and also a lack of interest in Chinese small cap companies.

So as the sun comes down on China Biodiesel we’ve cleared 7.21 pence a share on our 8,792 shares to stand roughly £634 to the good before costs on our £817 initial investment. All that  in a little less than 12 months. Nothing corny about that!