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We always knew...this would happen here...A t/o....the price is very very low though...imo...we shall wait and see now
Hello nighthawk im not so sure myself,just cant take sports direct seriously,after there poor offer of 1.61 a share,if hes serious he will have to offer more.imho
So looks like they DEFFO want FDL....
Continuing to acquire at under the mandatory offer price. Why would investors sell at 156 pence when they already have an offer for those same shares st 161 pence ? It just doesn’t make sense.
Quite agree Columbo. I remember the footage well and he thought it was all quite hilarious.
I also recall him acting like a petulant child when he eventually appeared in front of the Select Committee and didn't like the way one of Committee was looking at him.
The only other person that behaved the same way was Philip Green. Two peas in a pod...
I just have no respect for mike ashley whatsoever ejackson,remember seeing him on tv going visiting one of his warehouses with his wallet stuffed with 50 pound notes,when he pays his workers pittance,typical fatcat.
Interesting to hear what you say on the dividend side Columbo and chimes with the below which is copied from SPD's original announcement:
Sports Direct reserves the right to reduce the Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by Findel to the holders of Findel Shares.
I would be delighted if your source is correct as this would be hugely in our favour.
Thanks for clarifying the situation with regards to what SPD has to do with their shares in the event they are unsuccessful 1GW
skindle - as I understand it MA won't have to reduce below 30%. He will remain at his current holding (if he doesn't get to the 50% specified as a condition). If he subsequently buys more then I think he would again be required to make an offer, unless he receives clearance from the Takeover Panel first.
Has no intention whatsoever in a million years of buying findel outright,he is just after cheap shares,and he is still smarting when we didnt sell kitbag to him,and ive heard from a reasonable source that in the not so distant future we will be paying dividends again,so im staying pretty cool about the current situation,imho.
I cannot find a single example of shareholders benefitting from Sports Direct and/or Mr Ashley’s involvement in any business. This man really is the epitemy of the poisoned challice.
We must at all costs block this attempt by Mr Ashley and his associated companies/investors from taking place. Their sole interest is not to maximise the potential of the business but to rob shareholders of their investments.
I note the continual (share price reducing) trickle selling which I assume can only be controlled by Mr Ashley and his associates. Do not fall for the intentions that this man portrays, he is a thief who will steel your investment if he is allowed to takeover. I only hope that our board have seen sense to bar Mr Rowley from all meetings.
We are under attack and must treat our largest shareholder as our absolute enemy.
I appreciate we are all waiting on the publication of the Offer Document but 'death by a thousand cuts' comes to mind with the SP at the moment....
1GW, I suspect you may know the answer to a question I had , which was, in the event the takeover is rejected, at what point does MA have to reduce his shareholding back below 30% ?
You must have been a lawyer in a previous life 1GW_. I can’t find this information even though you are telling me where to look. So thank you for your invaluable investigative work.
The movement of the share price since the half year report RNS is giving little or no cause for optimism. How much further can the price fall ? Could this fall to 150 pence or below by the month end ?
Going back to the original financing deal (see RNS of 11th Feb 2011, "Balance Sheet Restructuring") which gave rise to the convertibles I see the condition is not that an offer is made, but that it becomes unconditional. So I don't think the dilution has been triggered just by SPD making the mandatory offer, since that offer is conditional. That's unless the trigger was changed subsequently - because I don't see why it would be reported otherwise in the annual report.
"In addition, £40 million of indebtedness under the Existing Revolving Credit Facilities will be released (and corresponding commitments of the Lenders cancelled) in consideration for the allotment and issue of 166,878,704 Convertible Shares to the Group's Lenders. The Convertible Shares may be converted into Ordinary Shares at the option of the holders of the Convertible Shares in the event that: (i) the Company's volume weighted average Ordinary Share price rises above 23.97 pence for a period of one month between the 2nd and 10th anniversary of the date of issue of the Convertible Shares; or (ii) in the event that an Offer becomes wholly unconditional (regardless of the share price performance of the Company). The rights and restrictions attaching to the Convertible Shares will be set out in the Proposed Articles of Association, including a prohibition on the Company making, paying or declaring dividends or other distributions in excess of 50 per cent., in aggregate, of the Group's net income in respect of any particular financial year. Dividends and other distributions are not permitted under the terms of the New Lending Facilities."
The share price continues to be walked down on thin volume. Does Mr Ashley own and control everything !!!!
Meanwhile the Lloyds Banking Group and its subsidiaries has declared that it owns 50,621,695 - 23.97 pence convertible shares, or 30.33 per cent. This folllows the disclosure last week that Royal Bank of Scotland owned 30,451,618 of the same convertible shares, equivalent to 18.24 per cent. Could it be that these convertible shares were given to our lenders as part of their lending terms ? In which case, could it be that these shares were issued by the company with strict conditions not to convert unless absolutely necessary ?
The duty and priority of any board of directors is to act in the best interest of the majority of shareholders. In this case 63.2 per cent of shareholders will be opposed to this hostile attempt at an under valued takeover. At this ridiculously discounted level virtually all shareholders will be losing money. To achieve maximum value the board must make it a priority to publish the 2018/19 accounts as quickly as possible. I am expecting a minimum EPS of 30 pence. Based upon this, anything under 300 pence a share and the board would be selling us out too cheaply.
Correction: I missed the word ‘not’ in the sentence referring to being employees of MA. Apologies.
We are all guessing at the moment as to what the end game is 1GW but my hunch is that The Board are pretty miffed (being as diplomatic as I can be) over MA's opportunistic strike, as all the evidence of recent past points towards them creating a really profitable company in the future and wanting to part of that journey. I am absolutely convinced they would want to be employees of MA and prefer to back themselves.
They have bought shares to demonstrate this and have lucrative options to further reward down the line. I have mentioned in previous posts other interest and my thinking here is that the Private Equity houses may well see a well run, hugely cash generative business that is currently undervalued and tempt the management into doing a deal that involves giving them a greater slice of the action for when they sell or re-list the business in say 3-5 years time.
I cannot come up with a suitable trade buyer but with the exchange rate still advantageous for possible overseas interest, this cant be ruled out.
In a perfect world, I would want to remain a shareholder in a business that is finally going places and I am really hacked off with developments but we are where we are, so I really hope MA is sent packing and one way or the other, a fair price is reflected /achieved in 'the end game'.
It's encouraging to see there hasn't been a rush of existing holders to sell at the current premium being offered to the SPD price. So I think it's fair to say that existing holders would agree that fair value should be well above where we are today.
The board will be limited by the takeover code I think in terms of what they can say about current year results, with failry tight restrictions on "profit forecasts" and profit estimates". If they are expecting good year-end figures then they might want to accelerate the auditing of end-year accounts so that they can then disclose these. I don't know what the rules are on allowing someone like Edison access to data and "steers" during a takeover period, but they could presumably revisit previous analysis based on publicly available information.
What's the end-game though? That's the key thing isn't it? Is there any chance of SPD and the board being able to sit down and negotiate a deal which does give Findel holders proper "fair value" plus a premium for control? I can't believe it makes sense for SPD to sit there with over 30% of the company but all sorts of restrictions on access to data and input to strategy. And given where the share price currently sits, now might be as good a time as any for SPD to try to close this out. They could offer a very generous premium over the current price and still presumably be well within what they might have estimated as the total acquisition cost when they first bought in at £2/share or so.
My calculator has thrown a fuse keeping up with you 1GW but you raise a very good point.
Changing the topic for a moment, when it comes to fair value, it will be interesting to see if The Board turn to Edison again as they have done previously. Their current fair value price is £3.48.
Understood now thank you. The effect on the share price if all convertible holders convert is the same as a rights issue I assume.
Skindle, the numbers stay as they are unless or until some of the convertible shares get converted. That extract from the annual report suggests conversion is now at the option of the holders provided that the SPD offer counts as an "offer for the company". If the shares don't convert by 22nd March 2021 then they become deferred shares which the company can buy back for "a nominal value".
So the offer appears to be a gift to the convertible holders and I would expect them all to choose to convert (on the basis of my reading of that summary of the terms in the annual report). As they do, the number of shares in issue will rise and the company presumably will give further 2.9 notices.
The fact that Findel has had to issue a revised 2.9 notice identifying the existence of the convertibles suggests to me that the board and its advisors were unaware of (or had forgotten about) the terms of the convertible shares when the first notice was issued.
So I think we can expect to get declarations from the 1%+ owners of the remaining convertible shares. I wouldn't have thought those who have already declared (ordinary shareholdings) would have to give new declarations just because the shares in issue change, but they would if they deal and would have to use the correct "shares in issue" number at that time.
Okay, so if converted, 86,442,534 would become 94,786,469 ? Should we expect more holders declaring their interests in the form of these 23.97 pence convertible shares ? If so, this dilution and diminution could continue for a while.
Skindle - the dilution, if the convertibles are converted, will reduce everyone's % holding of ordinary shares (compared to the current declared positions) because it will create more ordinary shares.
So converting creates 8,343,935 ordinary shares. That is equivalent to 9.65 per cent of the total number of shares in issue. Our 8.3’s have uncovered thirteen larger holders with one per cent or more. Those thirteen hold a total of 91.42 per cent. Add this to 9.65 per cent equals 101.7 per cent and fourteen holders ?
Thanks for your explanation 1GW_, what you say sounds entirely plausible. My below average level of intelligence is not helping me to understand this however.
By remaining 63% I mean 63% of current Ord shares plus (100% of) those created from the convertibles. And by greater cost I mean greater as a %: £13m on £88m vs £13m on £139m.