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No wonder they tried to rebuff the Kistos deal if the dates are anything to go by
That aside, what if any, are the next steps
That is not a shareholder. I am btw.
I just want to know what the correlation of the list was all about. Why not simply ask the registrar. There are ways and means,but we're simply relying on saving a few bucks and finking shareholders are fick
Bstrd h...D's. that's hmg and any poster that is not honourable. I.e not a share holder.
Agree full heartedly. The company which is a plc needs to rapidly add value. Irrespective of HMG. Otherwise why be listed. As far as I am concerned I have been good..lid by a load of Spivs. This so called righteous bb is part of It INMHO. So f.. ck you.
Not so. It may have been discussed prior, but not necessarily. The locked box often uses last formal audited accounts (or other agreed accounts). No smoking gun.
Another point is, given date is indeed correct (The locked-box date is 31 December 2021) then this deal MUST have been being worked on pre this date . Which then begs the question, ( putting aside leakage claims) why has it take so long to be announced or were other deals being 'prepared' alongside this and inter-dependent upon each other !
Over 12 months is rather excessive period for what is a relatively straight forward acquisition by Serica of Tailwind.
Something is not right here imo, although I'm no legal eagle !
aimo & dyor
NS,
"I think it’s unlikely to be wrong..."
If so, and the dates within circular pertaining to SPA are correct then Serica will be due as per T&C min circa $100m ( paid out in 2022 dividends) back in cash from Mercuria ( as nominated backer) on completion of deal once Serica file their claim within the required six months.
If there is indeed an 'error' in dates, well that opens a whole can of worms, as per my post afaic.
Which is it is the question !
For me this should be a win win for shareholders.
aimo & dyor
I think it’s unlikely to be wrong, but there is always a chance. If unfamiliar, worth looking up the application of the locked box process…what it is/isn’t.
Appreciate I am pretty much a lone voice, but want to just get on with this deal now so that the benefits of it start to accrue to those shareholders that stick with SQZ…
Nice work. Any hint that a date or statement in the particulars is wrong would invalidate the vote. Interesting.
I can only assume the effective date is indeed 2021. Reading the circular thoroughly is helpful in forming a judgement on the deal. I certainly did…seems some did not do so?
It will have been read in extremis by lawyers and advisors on both sides. If it’s a mistake, good chance the vote is invalid.
Mitch also referred to it in the call a few weeks ago.
That looks pretty sloppy. I wonder what compensation can be claimed from the legal advisors and contract specialists who presumably have been paid handsomely to make sure the T&C's are watertight.
OK Guys' here's an interesting one ....... as promised :
Mitch stated at time of Investor Meeting (10 Jan 2023) that locked box has been in place since signing of SPA.
https://youtu.be/LVcHGIa7ReA?t=4017
Date of signing locked box as detailed in circular as being, "SPA, the sale and purchase agreement entered into between Serica and the Seller on 20 December 2022 ", So far so good !!
https://www.serica-energy.com/downloads/reports/Shareholder%20Circular%20-%209%20January%202023.pdf
Now, here's the interesting thing about what the actual T&C's state regarding our SPA, Locked Box within the circular on Page 16 Part 2 / 1.2 :
" 1.2 Locked-box Transaction Structure and Leakage The Acquisition is structured on a locked-box basis. The locked-box date is 31 December 2021. The Seller has agreed that there is no "leakage" from 1 January 2022 up to Completion. If there has been any leakage between 1 January 2022 and the date of Completion, the Seller will reimburse Serica on a £1 for £1 basis (with no de minimis). As the Seller will not be an entity of any substance following Completion, Mercuria Energy Group Limited has agreed to provide a guarantee and indemnity to Serica to cover any leakage (capped at an amount equal to approximately 40 per cent of the consideration). Serica will have a six month period after Completion to bring leakage claims."
So either I'm interpreting this wrong or there is a glaring error on the dates (years stated) within the circular. If these dates are correct, can Serica claim for all 'leakages' ( which would be substantial imo) from 1 January 2022 up to Completion, note 2022, not as I would of expected, 1 January 2023 !!! Given the apparent 'rush job' of this deal, could I be correct !!
Or would it make the recent vote as per detailed within circular, containing said 'locked box', null and void as a revised circular would need to be issued and so therefore another vote, as per !!
Or better still, Tailwind (aka Mercuria) pull out of the deal as the 'leakage' would not be in their interest. Leakage afaik would include all methods to extract cash from the business (as stated by Mitch), inc dividends which we know from Tailwind's 2021 account was already extensive ($36m), so no reason, given much higher commod prices in 2022 the 'leakage of dividends' would in fact, likely to be much, much higher, est ~$100m
All views welcome.
aimo & dyor
Looks like the usual all night session is turning into an all day session for our resident drinker.
He's determined to avoid advice to refrain from posting whenhalf cut.
You can lead a horse to water but in this case you can't stop it drinking seems to sum it up.
Interesting to see SP over next week. I'm expecting a PR campaign and good news on performance and distributions for the renegade 25% many of which frequent this Board which should push SP up. Not as much as if we had not persued the deal but I will have to get used to putting that behind me :]
Couldn’t have put it any better.
Great income paying share. What will be nice if the share price increases ass well. Great Britain land will dicktate this INMO. BBC will also have a say. Good example was our equivalent of g.. BLS n...I ge.the guy that looks like some ******. g..ve in other words.. His words when questioned about the latest resignations by the le...zbo was. As ch...stns we should all forgive. So as a c...stn what next should we forgive. Is the bench mark of things to follow from g..t b.
Banburyboy, totally agree, but we are where we are.
I think the deal has destroyed 30-40p/ share of value today. If we can realise all of the tax synergies and there is no further tax grab (eg stopping tax synergies), and we ignore execution risk, then we can actually create 40p of value…all aggressive assumptions of course.
That said, the shares still appear cheap. Ev/bbl has gone from USD 4/bbl to USD 10/bbl. But add in some benefit of tax synergies and you might say USD 6-7/bbl eqvt, more comparable with some lowly valued peers.
I wouldn’t rule out a low ball bid between now and the deal closing in March though.
Especially if the share price remains near here (250p).
By March, we’ll have 220+p of net cash…why wouldn’t a low ball bid of 300-350p make sense even with UK tax risks. You could debt fund that probably with the existing cash and some moderate net debt, so it’ll be an interesting few months.
Closed the week 251p only the Wednesday buy ahead .
Patience , Patience , Patience , Patience.
to get buying shares now. Seeing as he owns so few and this is the deal of the century according to him.
If 4.25 so undervalued SQZ, what must the combined company be worth now ? 5 or 6 quid a share? All for him to buy at 2.50. Bet there will be some director dealings RNS's popping up soon with Mitch buying shares in the hundred of thousands. Same for the rest of the board, they can fill their boots on this amazing deal.
Terry and New KoTB.
I'm as gutted as you guys and this is truly awful.
The unanswered question is why major PIs voted YES knowing how awful this is. Mecuria had no vote.
How can Mecuria run the company to reward the 75% and shaft the 25%.
I live in hope as I have said a number of times there is some compelling reason for this transaction that cannot be made public and a few select major holders were made aware in confidence to carry the vote.
Agree no chance of a take over but perhaps a pleasant suprise.
GL,
"Doesn’t stop offers being made which boost the share price.."
Get real man, no one, I mean absolutely no one will ever, ever consider making an offer once this deal has completed, investing time, effort and not to mention cash into approaching Serica when they would know Mercuira WILL have a full BLOCKING VOTE thanks to Mitch et al..
Terry,
Agree ...
"make no mistake Mercuria now control SQZ not the BOD or anyone else now or in the future.... Get ready for more Mercuria deals for SQZ to buy companies which have the cash hollowed out of them replaced by lots of debt.."
The only assumption is that even though you, I and many others (~26%) that voted against, there is a hidden agenda behind this deal as I have posted on previously. One can hope our SP will rise significantly to allow an exit after which, for sure Serica will at some point past 18 month lock up, Merucria, in its own right, will become 100% owner of Serica.
In the meantime, we have 3 NED's joining our board with additional top two Tailwind directors, Steve Edwards and Jacques Tohme 'joining' the mgt team. I say joining, more like, imo, replacing our CFO ( already a given ) and CEO is less time that many here would think with Mercuria's voting power at AGM's. Could well go further and make any of the current board/mgt targets for replacement at anytime too.
You will then have all if not vast majority of hedging be 'arranged' via Mercuira's trading arm with terms overwhelmingly advantageous to Mercuira.
All strategic decisions, ie acquisitions and how to finance these, most likely via debt, will be made by Mercuria alongside their inside men as per our new "strategic relationship" with them and new CFO ! BTW, first deal will be within weeks of completion imo
Buyback will be certain to occur from the off , nothing more than to enhance Mercuria's % holding in Serica at no cost to Mercuira. All helps reduce their acquisition coast come their t/o in >18 months time with weaker SP from which to make a pathetic offer.
Debt will probably be done via one of their subsidiaries / bondholders, once again, nice little earner too.
Then comes dividend, sold as enhancing capital return to us poor shareholders ... of which Mercuira will be the main beneficiary, the object will be to drain as much cash as possible thus ensuring our SP reflects this cash drain ready for T/O.
The sad thing is Serica will become a much larger company for sure, with massive revenue and profits, that through the fault of the 75% 'for' voters will never see the real returns expected passed onto the small guy's, you and I. A path that Serica could have traveled without this awful deal.
aimo & dyor
GeneralLevy
"Doesn’t stop offers being made which boost the share price"
Before the Mercuria reverse takeover there was a very good chance SQZ will be the subject of a takeover offer, that is why the BOD come up with this to prevent an offer but now there is no chance. The main reason for an offer is the SQZ cash pile but that is now off to Mercuria and SQZ get a pile of debt in exchange with tax losses that will soon become useless as promised by labour. Also no company it is right mind is investing in UK O&G with a unfriendly conservative government and soon to be a Labour government who have declared war on O&G companies.
Even if there was some value in SQZ no will buy into it with Mercuria controlling interest unless in league with Mercuria, make no mistake Mercuria now control SQZ not the BOD or anyone else now or in the future.
Mr Market knows this and it is why the share price is close the total cash before Mercuria runs off with it which no one can stop now. Get ready for more Mercuria deals for SQZ to buy companies which have the cash hollowed out of them replaced by lots of debt.
Doesn’t stop offers being made which boost the share price
Zebbo
"Surely if the SP stays at this level someone else will take a punt. Such a low mcap considering cash in the bank + virtually zero EV."
Sadly that option will soon be gone, the reasons are
1. Once Mercuria's takes up it shares in SQZ they will block any takeovers apart from themselves which will only be at a very low price, I can see Mercuria working to bring down the SP so in 18 months it can takeover SQZ at bargain basement prices.
2. The cash which was the greatest prize will soon be heading over to Mercuria.
3. Lack of time before the deal goes through'
4. No company in their right mind is going to buy assets in UK O&G, Kistos would have returned if they thought it was worth it but they are now only interested in new O&G outside of the UK and Holland.
It is all over now, Mercuria have got SQZ by the B**ls and they will now tighten their grip until SQZ gives them everything, or perhaps I am wrong and Mercuria are a late visit from Father Christmas.
Surely if the SP stays at this level someone else will take a punt. Such a low mcap considering cash in the bank + virtually zero EV.
Must be a no brainer even for PE or another oiler. One thing for sure SQZ will need to get the SP moving upwards and quickly