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That is a lot of detail published by SeaFox there, and interesting to see both sides of the correspondence.
Also interesting timing. So GMS now has to issue notice within 21 days calling a GM, and the date of the GM has to be within 28 days after that. Assuming the Board delay it the maximum they are allowed (as they did last time) that would take us to mid November.
SeaFox are free to launch another bid for GMS (if they want to) from November 28th anyway (6 months after they said no intention to bid on 28th May)
Yes, theoretically should not be allowed. Mazroui voting for them opened the doors, and I doubt they would make such a move without expecting Mazroui to support them in the case it goes to a vote - clearly they can't win without Mazroui's 12.5% stake vote. Question is what does Mazroui seek out of this ? They did not support the 10p bid. Are they happy to accept a 22p bid? Or they happy to give control to Seafox and expect things to be better?
The consolation is the debt deal. If they don't do a rights issue by Dec, then warrants have to be issued. Warrants can be issued with shareholder approval. If no warrants, banks can call the pledged assets, which is all the rigs. So there has to be something that will happen.
Seems like SeaFox are trying to take control of GMS without paying to take control via a takeover offer.
At present SeaFox have 2 directors in a board of 7. That’s 28.5% control of the Board which seems equitable when they hold 29.99% of the shares and voting rights.
Thy are proposing to get rid of 4 existing directors and replace them with 3 of their own people. That would mean they controlled 5 out of a board of 6 or 83.3% of the Board but they have only paid for a 29.9% stake. Totally disproportionate and should not be allowed in my opinion.
This latest tactic from SF is very hostile to those share holders, my self included, who feel that GMS is worth considerably more than it's current SP.
It's a very brazen attempt to stuff the Board with people who would rubber stamp SF next paltry 'offer' for GMS which would be far below it's true valve and definitely NOT in best interests of the majority of shareholders.
Yeah, very hostile. Funny thing is Mo Bisisso represents 10% ownership and they want him out too
Seems like a very aggressive way to takeover the bod. The thing is, if Mazrui supports them again then the resolution will go through if it goes to a general meeting. Looks like Seafox can get their own way no matter what.
Any thoughts on how to read this? Value destructive moves?
Equity raise is on hold.
And we had a big seller.....1% of the outstanding
I'd say closer to 5p is where you buy by the truckload :)
Yes, there are multiple possible outcomes, and its hard to pinpoint which one it will be, but action (read volatility) is guaranteed !!
Below 10p seems like a great price to buy more, assuming Seafox can only bid a minimum of 22p, but I doubt things will be as a simple as that. The next few months could produce all kinds of outcome.
I'm intrigued to know how the new board members are improving the performance of the company for the benefit of shareholders, the way they promised they would before the votes were cast... It's been very quiet since their election.
You are right. Just looked at yesterday's volumes which was relatively big, still under GBP 50k though. Very hard to read Seafox's intentions at this point. I looked at the timeline of events, and noticed that Seafox bumped up the stake on 4/5th June, days after the AGM agenda was published on 29 May. Most likely Seafox saw it coming that they would lose control if the items in the agenda were passed, and perhaps this is the only reason they bought upto 30%. Luckily they still don't control the board, so again, who knows if they will make a bid once the lock up expires. In any case, 10p should be a floor.
I haven't seen many single large sells, it just seems to be trickling down gradually on small sells. I'm surprised it's dropped below Seafox's offer.
Seems like decent seller in last few days....
The clock is ticking away on the rights issue or placement to some strategic buyer to be in line with the debt restructure. I think they have to complete a rights issue by/before November, and SF's standstill ends around 25 November. To complete a rights issue in 2 months, they should set the ball rolling atleast now.
Rival bidders would have been DP World (because weirdly enough they got into oil and gas service by acquiring Renaissance) and Saudi based Bahri which runs the tankers for Aramco; but if they haven't shown any interest till now, I doubt they would come in now since SF has a blocking stake
I'm not sure there are any rival bidders at present but it does make you think; Seafox are currently locked out of negotiations because of their no-increase offer, but a potential rival could come in with a much more sensible (but still cheap because of the current climate) offer that shareholders are more likely to accept. What interests me is the sudden volume - the stock has seemingly seen less than 10 trades daily and barely fluctuated in price over the last few weeks yet today it seems there were 60 trades and the sp has risen back over 11p. I'm not sure if this is a sign of anything significant to come (but I hope it is...).
Any one have any input on what SF's next move might be?
We know they are currently holding 29.99% of shares and could trigger a mandatory offer at 22p share - double the current share price - at any time. But will they?
On paper GMS is worth about 93p a share, does anyone see a rival bidder to SF???
Thanks Albatrox. So that puts to rest the possibility that Seafox had bought those shares.
I don't know about the loan getting paid through operational cash flow, atleast in the short term - need that rights issue (which is an overhang on the stock and puts a cap on the gains) to reduce debt. The board has a deadline to raise the $75m, and will be interesting to see how this evolves - will Seafox be ok with this scenario where they have to inject the largest chunk of cash? Or will they make an offer that the board sees as acceptable? Will be an interesting....
No, they can’t 4Corners, and they can’t get to 30% without board approval during the 6-m period. Also, as TTF pointed out, they don’t represent a majority of the board so I wouldn’t count on board approval for an increase in shareholding before the due date.
IMHO they need to stop lowballing the shareholders and undervaluing the company (current SP reflects uncertainty and not true value). If I were them, I’d be in a hurry because as time goes by GMS performance continues to improve and the loan continues to be paid down, which will be further enhanced by better times ahead (Post COVID, higher oil prices, etc.). This can only lead to a higher share price.
Im not sure. Both the conditions of the no increase offer and the 30% offer both seem pretty mandatory. I tried to find out a few weeks back which would overrule the other in the event both taking effect but I couldnt find anything. One loophole in the no increase business is that another offer can be made if the BoD of directors allows it; now Seafox have two members on the board could it be possible they could influence this, or would they need other directors to back them up? As GMS reappointed the directors that should have been removed, the Seafox directors do not comprise half the board.
Can they do that? They can not make an official bid till they wait till November, but can they buy and trigger an MTO? I am not sure
Or is it seafox completing their 30%? I guess well find out soon.
Someone just sold (and obviously someone bought) a 2m block at 10.875....equivalent to 0.6% of outstanding. Mazroui buying up more?
Guess we are back to the silent period till the 6month period ends in November....
In the news article: 'Seafox, a global offshore jack-up company, was "pleased to note the support" for its resolutions...'. Yeah, more than half the support was them alone! I bet they'd have been mortified if they'd accidentally voted against their own resolutions.