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I can’t find any indicative guidance as to what happens after 1pm on Friday. It is quite clear that all shareholders have taken the advice of the board to take no action so Sports Direct will complete this part of the mandatory offer holding 37.83% of our shares. My concern is that this situation could go on for months if SPD are permitted to raise their offer by a few pence per share, if we keep having to go through this process each time a new offer is made. A recent report suggested that SPD were as much as £500m down on their investments in Game, Findel, Debenhams, Goals etc.
Given what we know of the likely revenue and PBT for 2018/19, 300 pence a share is a very reasonable valuation of the business. On this basis SPD would need to come up with another £161m to takeover the business completely. Can they really afford to do this now that Debenhams have lost them their last two years PBT.
My reading was that Friday (or Saturday) was the last day to increase the offer, in the existing timetable. If they then don't get sufficient acceptances by the deadline (day 60? of the current timetable) then they can't in most circumstances make another offer for a year. However I'm not sure how that interacts with the obligation to make a mandatory offer if they acquire more shares. Are they also prevented from acquiring more shares for 12 months or would it all start again if they do buy more?
If Sports Direct were to raise their offer on Friday to say £1.75 would we have to go through the sixty day process again even though the increased offer would more than likely be rejected ?
I appreciate your optimism 1GW_, but I maintain that Sports Direct will never pay a fair price for Findel. Hopefully the 3rd May will see an end to this charade and the share price will resume free movement that fairly reflects our financial performance.
Oh well. So much for that theory. Shame - I would like to have seen Fdl put out an upbeat TU to address the possibility that SPD might intend to make a "proper" offer next week.
There is one aspect that Sports Direct crave In all of the companies that they are invested in and that is control. The Debenhams situation proved to Mr Ashley that despite his 29.9% shareholding, he had no control of the direction of the business because he did not have a seat on the board. Our previous incumbents campaigned successfully to stop Mr Ashley and his nominated representative, Mr Gardner from assuming a seat on our board. I now realise how important this action was.
Despite his 37.83% holding in Findel, Sports Direct still do not control the direction of our business. The board currently enjoy the unanimous support of the non Sports Direct shareholders. This could quickly change if the board are harbouring some bad news. Sports Direct would act swiftly to install one of their representatives onto our board to help conclude the purchase of the business at a significant discount to market value.
I hope you are right in your end of trading year statement prediction as this would remove any suspicion that bad news is being held back. Roll on Friday 3rd May.
Who knows? Maybe the Debenhams debacle will make them think they need to win one, and to win this one they're going to have to make a decent offer because it's not about to go under (if we are to believe recent statements from the board, which I do).
I think the online infrastructure plus the credit operation are too valuable to SPD for them to pass up the opportunity to take control. I am sure MA's natural approach to doing that will be to grind down the Findel board until they give it to him to secure an easier life, but if the underlying company is sound and the shareholders are supportive I don't see why that would happen in the near term. So maybe, just maybe, he will be tempted to bid a "good" price for this.
I can’t find a single example of SPD paying anything like true market value for anything, I am not therefore optimistic of a positive conclusion to this situation.
I think SPD/MA are just giving themselves time to decide whether they really want to bid seriously or not. Having gone to the expense of launching the mandatory bid, they may as well keep the option of bidding open until the last possible moment. Maybe they're waiting to see what funds get allocated to other (SPD) retail adventures, maybe they do actually want Findel to update the market on FY19 trading before they decide. By now, if they're any good, they ought to have a pretty good indication of what it would take to get Schroders onboard (on the basis of current information) I would have thought, which would give them well over 50%. They face the uncertainty of what would happen to Schroders' expectations following a TU.
Not much longer to wait now until the PUSU date.
So during the period between the 9th and 24th April, Sports Direct received a whopping 6,113 additional shares bringing their new total up to 32,703,762 or 37.83%. You can clearly see the justification for the offer extension !!!
In fact if SPD is serious about wanting to acquire Findel it might agree to waive the condition. i.e. it is more likely to get the acceptances it needs if it makes an offer which fairly values the company on the basis of the latest information.
If it has no intention to make a "fair" bid and just wants to be disruptive then fair enough, but what's the logic in that? SPD won't be able to bid again (in most circumstances) for 12 months once this one fails will it? If it was only ever a mickey mouse bid, why not just let it lapse at the first opportunity?
The requirement for reporting accountants and financial advisor to sign off on an ordinary course profit forecast can be waived if both sides agree, although I accept SPD might choose to be awkward.
I would be very surprised if the required sign-offs would cost anything like £250k or take anything like 6 weeks if they are simply updating on key metrics from FY19. Surely the accountants would be discussing the accounts with the company already once the year has closed?
We shall see. My money is on a TU this week, but it is far from a certainty.
I think you may find that the answer is more simple. A year end update during the offer period would be deemed a profit forecast under the Takeover code which would need an accountant's report to be published. That takes at least 6 weeks to produce and would probably cost £250k. Suspect Findel figured they've made trading clear and would rather not P**s shareholders cash down the accountants' toilet on an unachievable timetable to defend a mickey mouse bid
I think the TU might be a victim of game theory around the SPD bid.
As I understand the takeover code, day 46 is the last day for SPD to make a revised offer (allowing 14 days for acceptances, taking it to day 60). The code says that the offeree company (Findel) cannot normally release material information (such as a TU) after Day 39. I think the purpose of that is to allow the offeror (SPD) time to assess the new information before making its final offer on or before Day 46.
So if Day 46 is 4th May, that would make Day 39 this Saturday (27th April).
So what's the game theory bit? Well Findel have information (current trading) that SPD doesn't. If that's good, it means SPD would expect to have to offer more to be successful in its offer. If it's bad SPD might not have to raise as much. If the Findel board doesn't really want SPD to prevail, then it seems game theory would push them to delay the TU as long as possible so that SPD has less time to prepare its final offer (and the necessary financing). That would increase the chance that SPD misjudges the offer and either offers too low to win acceptances or offers higher than it needed to.
So in that context I think it's reasonable that Findel would look to get a TU out later this week (and probably on Friday). It could perhaps try to delay until after Day 46, but I would have thought other shareholders would want Findel to get any good news into the public domain before Day 46 so that there was a chance of SPD bidding a silly high price.
Of course it's possible that SPD has no intention of bidding to win and is just going through the motions having gone over 30%. But if that's the case, why extend the offer in the first place?
253.002 shares have changed hands since the 9th April so it would be fair to assume that Sports Direct can claim to own no more than 38% of the total number of shares currently in existence. So what action will SPD take today ? My guess is they will extend the £1.61 offer again to the 4th May in their effort to continue to frustrate the share price in the hope that the board release a negative year end trading statement.
1pm today is latest deadline for acceptance of offer. Then I think we're getting fairly close to decision time for SPD.
"Sports Direct has until 4 May 2019 to improve or otherwise change its Offer, should it wish to do so"
Well, I am completely baffled by this situation. Why would you not release your end of year trading statement (which we are led to believe is positive) before Easter in line with last year, in the face of an unsolicited and opportunistic mandatory offer ? Answers on a postcard please !!!
No news atm......
Let's see what they say.....
If the usual financial year end trading statement is not released tomorrow, my suspicion that the board are harbouring some bad news will grow. It would make sense to hold back on any bad news until after the next deadline date of the 24th April. We also still await confirmation of the release date of the final results.
This whole mandatory offer process, while in place to protect shareholders is actually proving to work against shareholders of Findel. Virtually every shareholder in the company is currently sitting on a paper loss, including Sports Direct.
Hello fella being invested in findel at the moment is a bit like watching an old snooker match between cliff thorburn and eddie charlton,soul destroying.ha.ha,
Lets have that ruddy trading update.imho.
Mornig...we are very slowly moving up....a bit quicker would help tho....hehehe....paint drying mode..
Good post skindle and a very true one at that,i still think spd have no proper intent of buying findel outright,they are still very bitter that we didnt sell kitbag to them,and they seem to be trying to destroy us and wear us down,for the life of me i cant understand why even 0.98% of holders caved in and sold,we now need a really good trading update asap.
Sports Direct yesterday released the statement below. A very bitter statement expressing their anger at the board of Debenhams for the course of action they chose to take. Frankly, the board had nothing to do with the final decision, it was the lenders who dictated the final decision.
It was the second paragraph that left aghast at its hypocrisy. Sports Direct have no regard for fellow shareholders unless they comply with their wishes. SPD have currently completely destroyed shareholder value at Findel, but they have chosen to ignore this fact. They really are the bullying thugs of the business world.
“Further to this morning's announcement of a new share buyback programme, the board of Sports Direct believes our share buybacks are an important mechanism for maintaining an efficient but robust balance sheet for the benefit of our shareholders, whose support, including during the Debenhams refinancing process, we continue to appreciate.
Our understanding of the importance of our shareholders and our actions towards them are in complete contrast to the actions of the board of Debenhams, past and present, whereby they ignored the wishes of shareholders, both major and minor, and offers of support, and completely destroyed shareholder value”
A very sad case of a board of directors shamelessly enjoying a life style at the expense of their shareholders.