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Good luck with your strategy personally I think we've stole Trinity your all end up here ,don't miss the stampede..
I know there is risk Luke but with very close to 40% in agreement already they only need about a 58% acceptance from the rest of the shareholders to achieve the 75% total. And i cannot recall a takeover ever going against the managements recomendation?
It will be interesting to see what Malcy makes of the deal. Malcy has been cool about Trinity for a while. Trinity obviously have money problems re their offshore well and have resorted to endless work overs to slow down the decline in their output on shore. Arguably we have not negotiated very well and ought to have paid a lower price for Trinity. I also worry about the massive diversion of management effort that will be needed to integrate the two businesses, at a time when t he key priority should be to build up output quickly from our existing assets. The deal also puts a spotlight on the absentee senior management running the company primarily from Canada. Arguably Touchstone now need to strengthen their on the spot senior management team in Trinidad.
I guess the discount reflects the risk seen in the deal no being approved by TRIN. In that instance probably going to see at least a 50% loss on the money moved to TRIN. I guess it depends how likely you think this is, but I certainly wouldn't want to be owning anything in TRIN as a single entity. They have around 38%, need 75% in total. I don't know anything about TRIN or its shareholder base and have no view on the likelihood of them reaching the 75%, just thought I'd post this to caution people thinking this is a risk-free strategy.
I have just moved some funds from TXP to TRIN, if the deal goes through at 1.5x TXP shares for each TRIN share then i will be about 12% up on eveything i just moved.
Forward knowledge of this deal explains all the selling on here recently, the shares of both companies have been roughly equal on price for some time so any money moved will be 50% up after the deal. There is some comfort in now knowing why all the selling was taking place!
PB and JS being in London to talk to "investors" just didn't sit right with me. When you no longer need to raise funds by share issues why travel half way around the planet, i nearly posted this yesterday, now we know what they were really up to!!
I had trouble buying TXP so the drop was manufactured. Bought some TXP, and some TRIN.
Buying TRIN is the better deal, I paid 53p, which means that I got TXP shares for 35.33p
Assuming deal goes through, which I think it will.
TRIN is still around 54p.
Not a fan of TXP but this is an obvious trade and arbitrage opportunity. TP, 60p once the media big this up.
Amazing deal, what's worth noting, you always know if it's a good deal by what the counter part shareholders are saying and they are not happy at the price which bodes well for the deal.
We're be Blue by end of day this was ridiculous selling this morning
Lettuce hope so! Gawd knows TXP neededd something to stop the down trend.
SP recovering nicely. Deal seems transformational, people are going to want in.
No time would be a right time for some .m with whatcangowrong we can kick right on .
We're now already a Empire. Market will soon see the benefit
It certainly looks like the MM's scare a few into selling cheaply.
Now 4v1 and only one mm on 40 and others all at 42
Trying to buy but can’t get a price
This REALLY is a bad timing. They should focus on bringing Cascadura to 200 mmcf. Then this would be a 4-5% dillutive trade, not a 20%
It's demoralising.
PB would rather build empires with a 20 year timeframe instead of building shareholder value now?
Hold on to our hats on this one. Looks like people panic selling. This should come back once they realise the deal is smart from running a company.
Equipment all in one location.
People all in one location.
Management team synergies.
Tax loss utilisation.
Both undervalued currently
On paper May look like a dilution for TXP but in reality this brings significant positives.
I like the look of this deal - TXP has a huge foothold in Trinidad off the back of the deal and appears grossly undervalued IMO!
I wonder if there is any RNS that TXP could release to which the market doesn't respond negatively? Bloody ridiculous.
Ol well....I'm sure PB has a masterplan somewhere in his locker.
I own 2.6% of Trinity and will be taking a 50% loss on my investment by accepting this offer (which at least is better than the 75% loss I’m currently sitting on). However, it seems to me that the expanded Touchstone should quickly see its share price double: it can use the tax losses, there’s plenty of room for cost cutting (just getting rid of Trinity’s senior management will save over $1 million per year; the CE alone has been picking up $500,000 or so), and the increased cash flow will drive investment.
Add in $16m EBITDA and 13mbo 2P to the mix, coupled with highlandmatts other observations.
It does appear to be a good deal, even with the premium they’ve picked the assets up cheaply and TRIN will be in favour of this due to synergies, efficiencies of scale via cost reductions at an operational level and a huge upside potential via TXPs existing assets.
When you're buying something at a 72 premium while your own SP is 50% underrated and you're paying with shares... who's the real winner?
TRIN produces 2,600-2,700 bopd, its Net Cash position is $9.7m when taking in to account the $5.1m VAT receipts due.
It's share price is bargain basement due to the poor performance of management, it should be many multiples higher. Obviously once acquired you remove that downside of poor management. There's then the sizeable tax losses Ab mentions and the shallow water Galeota development, which is in middle of a revised concept study and was working to FID in 2024. The original concept was for "Echo phase 1" to produce 4,000bopd and Foxtrot/Golf Phase 2 to produce combined 7,000bopd.
Combined 2P Reserves and 2C Resources end of 2023 at 51.58mmstb.
As much of a kick in the teeth this notional price is to TRIN holders, based on its current share price it's very good deal for both parties.
Trinity is spending millions per year on five non-executive directors and two director executives (https://trinityexploration.com/about-us/board-of-directors/) and a chief operating officer and five other senior managers (https://trinityexploration.com/about-us/executive-management-team/). That cost will be quickly cut, adding to the bottom line.
This appears a good deal for both parties and then savings on the Senior Management Team. This will create some significant synergies here, so should be seen very favourably.
Https://www.lse.co.uk/rns/q1-2024-operational-update-1l0aa1srgo2so7m.html
TRIN producing 2,500 bopd, $8.6m cash, $4m overdraft, $5m VAT reclaim. Not terrible for $26m.
Trinity’s biggest asset is $225 million of tax losses.
They exempt the holder from paying 50% profit tax on 75c of every $1 of profit.
Touchstone is getting a bargain on the basis of just the tax losses. The cash, cash generating assets and reserves all come for free.