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I agree. It is as per. RNS. That is why I started with my comment on no comment. I have not read IKO will take part, but they support and my expectation is they will. I do believe a fair obligation exists, to extend any pre-emptive offer in similar form to all existing shareholders on a record date - we shall see about that. I am content to see it play out. I read, but discount , certainly in the longer term, the individual pundit's view. A case of my money, my choice, as always.
Open offer hasn’t been mentioned and IC are misleading in making such an assumption..
CD&R are investing £85m which is over half of the equity raise. As Steve Francis stated in the presentation, CD&R have carried out a long and detailed due diligence before backing SIG with such a huge amount of money. I personally feel greatly reassured by that.
The remaining equity raise will be offered to existing institutions. IKO the largest shareholder have already said they will support and invest further.
I doubt it will get to PI,s but it depends on the take up of the remaining £65m
Ic article is poor, i doubt they even listened to Steve Francis excellent presentation on the strategy growth for SIG.
I cannot comment on the open offer mentioned. However, what has been said in RNS is:-
"The equity offer, to be launched in the coming weeks, will be structured in two, inter-conditional tranches: a tranche of £60m being placed firm to CD&R (at 25p per share) and a second tranche of £90m, offered to a broader range of investors and incorporating a pre-emptive offer, in which CD&R will invest up to £25m"
Pre-emption rights give existing shareholders first refusal when a company is issuing new shares. If pre-emption rights exist, new shares in a company cannot be offered to other potential investors without first being offered to the current shareholders.
CD and R will benefit, naturally, from the second tranche. I expect IKO at least to be given the specific opportunity. I do not suggest it will necessarily do so, but a pre-emptive offer will be made and we shall have to see if that offer, as opposed to a right, will extend in limited form to include pi's.
I think in the past with SIG they've heard it all before.. but they certainly arent factoring in the fact the companys secure now with cash.. new ppl at the helm.. no debt.. they arent closing stores as they want growth. They've also put all there cards on the table and said a drop in revenue ..
Time will tell but i reckon 40p isnt far off..
Heardy.
I think the 2nd tranche will be issued at a slightly higher level as we are no longer in a distressed position. However the institutions may push to have the same beneficial pricing as CD&R's 1st tranche. So we will have around 1150 million shares in issue.
Over the last 3 yrs it has traded between £1-£150, so a mcap of £600m-£900m. With 1200m shares in issue and £150m cash, 50p - 75p would give us a fair valuation to start from. If the business proves viable, then onwards & upwards.
BB
Are we going to end up with circa 1200 million shares in issue in a few weeks time?
And for those who genuinely believe there will be a mass 'dumping' of shares on the market, and they will not be taken up, sell now.
A recovery is on the way for Sig, not so much in the shorter term from Covid19, but from poor management. Yesterday's announcement was the outcome so far of months of due diligence and behind the scenes discussion. One can see that private equity saw an opportunity and took it, and the appointment of Mr. Francis and other board changes up to and including yesterday were a fundamental part of the plan, as was the announcement of CD and R putting two more of their people on the board. Effectively, private equity CD and R will run the company, having agreed to take perhaps 25% for the privilege of the opportunity at 25p.per share.
Sig is already a pan-European market leader, and therefore with significant opportunity, targeting 5% margin on historic revenue of say getting on £3bn. The foregoing and practical recovery plan will form the basis of the proposition ( possibly/probably already put ) to investors in the second tranche. One wonders perhaps if the terms will be higher, but I suspect that it will not, with their 25%, matter to CD and R.
The high volume day at price yesterday will hopefully have afforded larger investors intent on selling the opportunity to do so - less encumbrance to the sp. Some investors may be waiting for completion of the fund raise, and I do see that announcement as being beneficial to the price. But it is probably as good as done, and over-subscribed.