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forms 6% of the Bailiwick Investment Fund.
Should previous timing be followed, annual results and guidance can be expected at the end of this month. We may hear more about the demerger, and circular, with the AGM then being only perhaps 2 months away. Ravenscroft affairs will continue to be ticking over, particularly as they have bought 25% of the demerging company. 3 acquisitions have so far been made into MXLG, which was last reported as achieving a solid platform of monthly profitability, the clear inference being that the intended large company is coming together well ( for purchase when complete by Liberty Global ) I doubt we shall hear any more about Íde beyond their own September RNS. And Adept4 will be a matter for their new management, though I expect MXCP will express their pleasure at the Cloudcoco 'acquisition' and prospects for their investment. There has been a further notable move in the formation of Channel Islands Media Group jointly with the BIL, involving the significant sum by MXCP standards on the single acquisition of Guernsey Press.
'There is a fabulous opportunity to make the GY4U portal the go to destination for all things Guernsey. As a captive market, unlike the UK, we can create a single source for news, user specific content, loyalty schemes and of course the obvious Automotive, Housing and Jobs market. The media landscape has changed significantly in the last decade and technology has been at the heart of those changes. We are looking forward to being part of such a respected Guernsey name and helping it to further embrace technology so that it drives value for both users and investors.'
MXCP bought the business from Claverley Group, who continue to run the sister press in neighbouring Jersey.
MXCP updating the previous holdings RNS to show the new percentage holding.
He is a lot of cash to the good, whilst still retaining his original pro-rata %age holding. A sensible move for him with the amount of personal equity he has tied up in MXCP.
Maybe their just playing the game, I've played took advantage of the offer then bought back and gained about 50 shares after covering costs. Good idea? Bad? But fun who knows what they will be worth in a few years. Lol......
Ian Smith is as entitled as other shareholders to take advantage of the tender offer. It may be interpreted as him not expecting to see shares at 116p for a while, and it would have looked worse had he sold in the normal course of events. I take it that he has considered that his sale will not be to the detriment of his remaining 15.5%. Unhelpful to the cause, but perhaps he has plans for the cash.
( continued ) The tender offer cash substantially came from the demerging company. Therefore if things continue as hitherto on advisory and arrangement fees, one can expect a perhaps 10% pa return on those 'free' shares (alongside the value increase or decrease in MXCP investee companies ) One must hold MXCP shares to get the others on the record date, whenever that is published. It will require a circular and General Meeting, so investors will have time to buy into that if they wish. Major shareholders, the concert party, will vote it through. In the meantime, I continue to hold all my shares, with prospects widening and improving for the company and wishing to take full advantage of the demerger, whilst thinking 95p is very much the lowest price I can put on the shares There may be some minimal support for the last thought from one or two only, responsible for the small intraday reversal this morning, bouncing off 97p. We shall see on that. And incidentally there was a marked turnaround at Adept4.
A few words on NAV ( with which investors and commentators are concerned, though in my view there should be a substantial element of forward valuation) This was last reported as 116p, from the previous reported NAV of 95p. I can take little account of private companies, last valued at £13.5m, but that will have changed, though if all is according to plan it should not unduly affect the NAV movement and basic calculation on the facts in the public domain. With MXCPs large investment in Íde, and a very much smaller one in Adept4, this is subject to swings, downwards since 116p which figure was at the height of the remaining two listed companies share prices. At 31st. August ( 116p NAV ) MXCP held as it does today, 172811125 shares in Íde, then valued at 7.35p, worth £12,701,617. At close today those same shares are worth £6,221,200. At 31st. August MXCP held 68066275 shares in Adept4, then valued at £2,416,352. At close today those same shares are worth £1,088,460. MXCP has purchased a further 7m shares, I suggest at 1.4p - I have excluded those as that is near enough the buy closing price today and the cash to buy them came from MXCP cash holdings, so is offset in relation to NAV. Taken together, the value of MXCP shares in Íde and Adept4 has decreased by £7,549,092. With a reduced number of 65,742,407 shares in issue following the tender offer, that amounts to a decrease of 11.48p per share from 116p, giving a NAV of 104.40p per share. Taking into account the £1.7mil from cash resources to fulfil the tender offer, that figure can be reduced by a further 2.58p per share to 101.82 per share. A snapshot in time, which I came to for my own purposes and decided to share for what it is worth. We can see the rises in Ide and Adept4 for what they were. Their prices were chased up. I think Adept4 has stabilised. But it will not be until Íde next updates/reports that we shall see what investors make of it. And I expect MXCP to report in November. Though evidently very important to MXCP, the company is not all about Íde. Perhaps there will be more information on the major 'new' buy and build MXLG, which was last said to have moved into ' a solid platform of monthly profitability.' And there is the Ravenscroft tie-up, which also gave rise to the recent joint venture with the Ravenscroft administered Bailiwick Investment Fund. Bailiwick and MXCP each invested £4.9m in the formation on 7th. August of a new private company, Channel Islands Media Group, holding 50% each, and bought Guernsey Press.
Contrary to the theme of my post before last, MXCP bought 7m shares in Adept4 last Friday. We shall see if they intend to buy sufficient to maintain 15% following BGF dilution, or whether they progress further. It does at the very least show their faith in the new management, and Adept4 prospects. It may be that the business will be taken further than the reselling position occupied by Cloudcoco, and certainly they are excellent salespeople.
Adept4 is a relatively small part of the MXCP portfolio. As a broad brush, today's 30% or so loss at Adept4 would have the effect of reducing Mxcp's market cap by less than 0.75%. That is the upside of investing in the less exciting 'fund' of MXCP companies, with the current option of investing at no additional cost in the future demerged, dividend paying transactional company.
This is not a comment on Cloudcoco future. BGF were always likely to exercise their options. And there are many remaining. From an MXCP perspective the percentage of Cloudcoco held will slowly drop. They have done well to make something out of the previously ailing Adept4 - now taken over by a sales team of resellers. It is only my opinion, but I do not think MXCP will be overly interested in that as it stands. Of the listed companies, their interest must be focused on Íde, with at least a return from Adept4 from the loan notes.
The tender offer and loan notes are finalised. MXCP's 15% of Adept4 is currently worth about £1.47m. The terms of the loan notes have improved for Cloudcoco, insofar as there is no early redemption payment as with BGF. ( and not as with Íde, where all fees and interest to end of term become payable on redemption ) And Mxc warrants are cancelled. But BGF now holds options over 50m. shares, rebased from 6p to 0.35p ( in exchange for writing off £1.5m in loan notes, and selling the £3.5m remaining to MXCP. If full term, the £3.5m now remaining in loan notes will become £6.17m in 5 years, a return on investment for MXCP of £2.67m. We can now expect an early step to be the demerger of MxcUk ( into which advisory fees flow ) and the award of shares in the new company on a pro-rata basis to shares held on the circular record date in MXCP. MXCP has said current cash will be fully invested within a few months, and I hope news of that will be published. I would expect that further cash will in due course be found for future investment, likely by sale of an existing investment.
Like many, my notice regarding the tender corporate event came through yesterday. There is no charge for administering that. Everyone will have different circumstances, and make different choices. The notice prompted me to reconsider. 116p. is not to be sneezed at. I think it unlikely we shall see that price this year. In my personal circumstances, I can wait for better, and for me alone my last post stands. The theory is the price may rise following the cancellation of shares. It may be helped by those taking advantage of the tender offer in one way or another, and then buying back in. I do not know. But in my perceived scheme of things, the offer is not for me. And I do not discount a follow-up tip, giving further opportunity to trade as before, hopefully after the pro-rata assignment.
Tend to agree with ralleigh, barely breaking even at the price so what would have been the point but in saying that I shall submit a small percentage just to play the game...
I did not invest to take advantage of a tender offer at 116p. The price has already touched 115p. If I did not expect the price of my entire holding to exceed 116p. over the next year I would not be here now. I may be wrong, but I doubt MXCP will let us have our cake and eat it. IWe shall see on that. My priority is to ensure I have as many shares in the demerged company as possible on the pro rata basis. It is the to be demerged company which is paying most of the tender offer, through fees from the joint ventures with Ravenscroft and Liberty Global. MXCP say that Mxcuk is generating over £1m a year in fee income. In fact, results for the 6 months to 28th February show £707k in fees over £296k for the previous corresponding period. MXCP say the revenue streams have continued into the current year. The demerged company is throwing off cash. Ravenscroft has seen fit to buy 25% of it. As far as Ravenscroft is concerned there is dialogue about a follow on fund to the GIF, and MXCP say "The MXC board believes that additional partnerships like the ones entered into this year (referring to Ravenscroft and Liberty Global ) will become available to us in the future." I have a feeling the fee receiving business will grow, so will hold those MXCP shares I have, unless something happens to change my mind.
Up for grabs, which I'm looking at taking up as much as I can get................
Channel Islands Media Group Ltd. is a new company, incorporated in Guernsey on 7th August 2019, and is the holding company for the joint MXCP/BIL venture. The acquisition of Guernsey Press and subsidiary from the Guiton Media Group Ltd/Claverley Group is seen as "bringing ownership home." This is the Guernsey Press' own article https://guernseypress.com/news/2019/10/01/guernsey-press-soldto-local-investors/
I had expected a Liberty Global acquisition before anything else. But other opportunities arise, and one has been taken undoubtedly after months of discussion and due diligence. Accepting the investment is a good one, and I would not be an MXCP investor if I doubted that, the real positive for me is that this is a new relationship with a quoted fund ( prepared to make 50% partnership investments), arising from the existing relationship with Ravenscroft and the GIF, Ravenscroft administrating the BIL in the same way as the GIF - thus opening up further opportunities and indeed possibly fee income ( though there is no mention of that ) Should there be fees, these will go into the proposed demerged dividend paying new TISE listed company. ( BIL is listed on that exchange also.)
As one would expect, Bailiwick has also published today's announcement.
hope to get more information from the circular and/or Hargreaves Lansdown, but as a matter of interest I note that Ravenscroft are themselves market makers for the TISE exchange, and deal in the exchange's own shares. I do not suggest they will necessarily trade demerged company shares ( conflict of interest at first sight )
On the demarger, I meant to add something more positive about holding shares in MxcUk - that I take note of what has been said ( below ) And also that Ravenscroft did not buy into MxcUk without seeing advantage to their own shareholders, and Smith, Weaver and associates plainly see advantage to themselves, with them receiving shares on a pro rata basis in the same manner as all MXCP shareholders.
"The fees from our transactional businesses flow to MXC Capital (UK) Limited ("MXCUK"). Post year end, we completed the sale of 25% of this company to Ravenscroft for £2.25 million. The investment represents a deepening of MXC's relationship with Ravenscroft, which we believe will help to grow and drive further value within MXCUK, as well as providing additional opportunities for our investment business. We continue to assess the strategic options for this valuable part of our business." ( we now know demerger is part of that ) and also,
" We are delighted that Ravenscroft has decided to take a significant stake in our transactional businesses, demonstrating their belief and confidence in the MXC model. It is testament to the excellent relationship we have built with Ravenscroft as a result of working together on the GIF and we look forward to building on that relationship to create further value for both MXC and Ravenscroft's shareholders."
The Ide results were welcome, drawing a line under things. Some seem to have expected too much too soon, but indications are that with Mxcp's 43% and loan notes, and with their usual support from Kestrel, and board representation, all parties have a vested interest in swiftly completing the remedial action, and growing the company. We are now waiting to see developments with Adept 4, and how MXCP will come out of that acquisition. And I expect MXLG to make acquision(s) soon. There is also the tender offer, which I suspect I shall find of minimal interest. In any event, if there is a choice to be made, I shall try to acquire as many shares as possible in the new demerged company. One never knows what it may lead to, and it would seem unlikely there will be anything to lose, as they come 'for free' with promises of a dividend, albeit that is likely to be minimal. But we await more information.
It is my opinion far too much emphasis has been placed on NAV. That is probably because in recent times MXCP has set its first target at closing the gap between share price and NAV, something repeatedly mentioned in updates. But the situation has changed, with Íde and Adept4 being given long overdue attention, by the appointment of a heavyweight board at Íde, and the acquisition of Cloudcoco at Adept4, bringing what appears to be a growing company with an aggressive management team into the mix. In addition to those two, MXCP has it's private companies, which include the Liberty Global joint venture, investments on its own account in others, and also through its relationship with Ravenscroft and the GIF. The value of the transactional company will now be fully recognised through the new listing, with Ravenscroft owning 25% and we MXCP investors due to receive pro rata shares of the 75% we own on the relevant date (but we await the circular ) The company has £21.5m which we have been advised will be invested over the next few months. Undoubtedly there will be acquisition(s) into MXLG, and there is a strong hint that there will be a GIF follow-on fund giving yet further opportunities for investment, and the fees from their work for the fund, as well as those fees coming from the Liberty Global co-investors. The way the investments with Liberty Global are structured means that more, or larger acquisitions can be made achieving greater economies of scale. It appears that the next few months will be a newsworthy period, making investments to grow MXCP capital return. They benchmark themselves against a 2.2x return over 4-5 years. The Castleton buy and build, which is the only recent one which possibly compares to the Liberty Global ( starting to show profitability after 3 acquisitions ) buy and build, achieved a 3.3x return over 3 years. And 'size and scale' indicates the intention to build a far larger company. The next few months should further consolidate the investment base. And in my view the activity, and potential for sizeable returns justifies a premium to NAV. That would be normal for a progressive company, let alone one where most of the share price iwill be backed by assets.
I have been advised that HL will communicate re. the corporate actions, and future trading on the new company.
I have just spoken to Hargreaves Lansdown - according to them they don't have access to TISE, so once shares are allocated in the new company I would not have access to them. Does anyone know how you would go about removing funds from TISE?