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NewKOTB - not convinced at all that he would entertain a modest £21 as that is not a knockout bid in my book with all the cash on the BS. Also, not so easy doing the same all over again. Just wave away modest bids If they ever transpire and keep looking for opportunities as RRE is a much better platform to grow from rather than to start all over again. Always important to remember that doing it again does not always end well just look at Parkmead which is proving that Tom Cross had his moment with Dana and his midas touch has left him IMO never to return It seems. I want AA to stay patient and I hope he doesn’t buy something just because the market may expect it.
We go on about companies that are ripe for t/o, ones that offer themselves up, on a plate, ones that no doubt AA has been looking at himself ..... we must not loose sight of the fact we are one of those which are ripe for t/o too. How much more ripe can you get when you trade at +50% discount to cash in the bank, with no debt.
I feel things are bubbling away in several boardrooms atm ....
atb & imo
"could this be due raising some equity..."
Can not see AA wanting his equity share falling much below 25%, once costs are included, you are not going to raise that much. So its a none starter for me I'm afraid.
atb
bandit1,
You should also consider AA taking an offer circa £21/share, netting him ~£70m.
He would then go off and repeat RRE , an IPO would attract a certain amount of 'loyal' followers too.
with the share price held in a tightish trading pattern, could this be due raising some equity to part fund an acquisition rather than using the cash in the bank? Its possible that there are some private equity or investments banks that would like to buy in?
I too have considered that a PE bid is just as likely as AA attempting to take the business private however I sense that AA would probably not enjoy being at the beck and call of a PE owner which, from personal experience, can be pretty uncomfortable as they want their pound of flesh multiplied many times over. My conclusion therefore is that unless any PE bid was knockout and he wanted to retire and not stick around I can’t see this happening either as AA would not answer to others IMO and indeed who would pay a knockout price in the O&G sector at this time? So, as much as I would like to double my money in 6 months or so the realistic outcome is for our share price to steadily move north in coming months with some correlation to Brent and to gradually close the valuation gap that is apparent looking at our our balance sheet. Of course, should RRE become the offeror of an attractive company at a good price then that is an entirely different matter as the slide rules will be busy again.
Dana,
If AA intentions are as you mentioned below, think he will need to get his skates on ..... a PE could do the same at any moment. He will have then lost the opportunity.... Something needs to give, been pinned at ~1000p for too long now.
Bandit, thanks for the inside track and reassurance.
With cash accumulating AA could easily make a bid at £20 per share and it would cost him nothing to take over, and still have over £60mill in the bank, due to his 30% share of cash in the bank.
I think that many shareholders would be tempted, he would only need 20% or so to say yes to it as it would be a compulsory bid.
? the offer is permitted to be conditional only upon the level of acceptances referred
to below and, if appropriate, there being no reference to the Competition
Commission or action being taken by the European Commission or a competent
authority of the UK under the relevant European Community regulation;
? the acceptance condition is that only 50 per cent. (plus one share) acceptances
are required; and
? the offer must be for cash or accompanied by a full cash alternative at not less
than the highest price paid by the bidder for target shares within the preceding 12
months.
AA bought a few last year so £20 is above this.
20-Nov-19 Buy Andrew Austin 1,748.33 GBX 25
It would make a very nice little private company imho. Not Jim Ratcliffe territory, but you could retire on it.
Dana- having spent some time working at The Takeover Panel ( on secondment) in a previous life when I had less grey hairs, I can say with a great deal of confidence that this sort of action would be exactly what The Panel would be all over like a rash. People like us and many others who are shareholders who would feel somewhat aggrieved would raise the alarm In short order and it would be investigated. I know that The Panel are often, rightly, criticized at times for not being tough enough but I have been involved in concert party investigations in the past and watched the Panel ruin the careers of those involved so a very high risk strategy with people who have a lot to lose, and yes, a lot to gain but they are of often spins and not people like Austin. I am also struggling to understand why we remain at these levels when it looks pretty clear that the OPEC plus countries are respecting the cuts and additional cuts will come from reduced wells, storage is slowly reducing and oil futures are less volatile etc. Puzzling yes but look at the share prices of many other companies across sectors and you could say the same. I will sit tight as I invested, thankfully, as it dropped below £12 and kept buying so I’m in a decent position. Austin will be agitated but if he wants to take the company private he will have to pay a fair price for it. Not convinced this is likely in the near term but will become more likely if we remain here after the world has emerged from lockdown and Brent moves above $40 and stays there. All IMO.
I don't subscribe to conspiracies, but it occurred to me that if you wanted to buy RRE on the cheap, the way to go about it would be to reach an informal arrangement with a major shareholder, and buy a couple of big tranches of less than ten percent.
Once that was in the bag, three shareholders with more than 50% of the company could carry any sale price vote.
Of course the Takeover Panel would 'carry out an investigation' and let the Party-goers enjoy their massive bag of swag away without a slap on the wrist, because it would be a private company and no longer of interest to them.
I am watching for TR1s to see if anyone is position building, but nothing showing.
This is, of course, pure speculation on my part, but just wondering why the SP appears to be held back so badly, when oil prices are up, oil shares are up, we are valued at less than half the cash in the bank, and it makes no sense.
Time will tell.....