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I am GUILTY. I confess to selling part of my BELL holding (7500) and buying 12000 TMTA in its place.
My motivation - as previously suggested, it's an arbitrage situation.
There is risk; the proposed deal may not materialise.
There is reward; the equity exchange of 15 to 22 implies that a holder of TMTA will benefit when the deal happens.
Arbitrage situations, by their very nature, implode naturally due to uneven buy and sell pressures on each name. I wasn't particularly early into this arb and my opinion is that this opportunity has now closed. My flip made an unrealised book gain of around 10%, which pleased me as I was having a sandwich and a cuppa at the time!
For what it's worth, I have been a holder of TEK and BELL for a long time and I'm sitting on losses on both names. However, I believe that BELL is fundamentally solid. Holders should start seeing a steady SP uplift when production increases but we should not expect anything remotely meteoric and nothing for at least 12 months. My investments are based entirely on fundamentals but I got my entry level wrong for my BELL risk, my break even is 72p....boo! I trade occasionally , when I sense an opportunity such as this, to lower my break even price.
Good luck everyone and keep smiling. š
Seaman,
There are different (though related) opportunities re the BELL-TMTA pricing relationship: the arbitrage opportunity, i.e. selling BELL to buy TMTA; and just buying TMTA directly instead of BELL.
The arbitrage opportunity looks to have closed, unless you can get well inside the spread the spread in each case, although there might be brief opportunities in the future when it temporarily reopens.
But TMTA is still potentially a significantly cheaper way into BELL than buying BELL directly.
Opportunity missed then
The current BELL & TMTA mid s.p.s & spreads, with their equivalents based on 15 BELL shares for every 22 TMTA shares:-
BELL: 30p (28p ā 32p): equates to 20.45p (19.09p ā 21.81p) TMTA
TMTA: 18.5p (17p ā 20p): equates to 27.13p (24.93p ā 29.33p) BELL
These are what look to be three BELL-TMTA arbitrage trades on Thursday:-
Belluscura (BELL)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
05-Oct-23 12:31:16 32.7501 7,500 Sell* 32.00 38.00 2,456 O
05-Oct-23 10:39:32 32.722 7,377 Sell* 32.00 38.00 2,414 O
05-Oct-23 10:38:50 33.00 30,000 Sell* 32.00 38.00 9,900 O
TMT Acquisition (TMTA)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
05-Oct-23 12:31:55 20.40 12,000 Buy* 19.00 21.00 2,448 O
05-Oct-23 10:40:31 19.80 50,198 Unknown* 19.00 20.00 9,939 O
05-Oct-23 10:41:02 19.80 11,464 Buy* 19.00 20.00 2,270 O
The seller of the 30,000 BELL trade looks to have bought 50,198 TMTA with the proceeds.
On the basis that TMTA shareholders will receive 15 BELL shares for every 22 TMTA shares, this trader should receive 34,225 BELL shares for these 50,198 TMTA shares.
I.e. a likely free 4,225 BELL shares: worth Ā£1,394 at the current BELL mid price of 33p.
And if Jonathan Satchell 40-bags BELL, as he did with Learning Technologies Group (LTG), 4,225 BELL shares could be worth over Ā£50K.
Which wouldn't be a bad return for what looks to have been an essentially a risk-free arbitrage trade!
The BELL-TMTA arbitrage benefit has now narrowed, but the window of opportunity is still open.
Logically though you would expect it to narrow further and close, due to further arbitrage trading, & investors buying TMTA as a likely discounted route into BELL.
"BELL 35p (31p - 38p)."
That should of course say:-
BELL 34.5p (31p - 38p).
Current s.p.s today:-
BELL 35p (31p - 38p).
TMTA 19.5p (19p - 20p).
On the basis that TMTA shareholders will receive 15 BELL shares for every 22 TMTA shares, the current TMTA offer price of 20p/share equates to a BELL offer price of 29.33p/share, i.e. 22.82% less than the current BELL offer price of 38p.
Or to put it another way, the current BELL offer price is 26.15% more.
Why pay that much more when you don't have too?
And there looked to be a few BELL-TMTA trades yesterday that were taking advantage of this attractive arbitrage play, albeit the differential isn't as great if you are selling BELL first to buy TMTA.
Those who sold based on the Ā£0.4million H1 2023 revenue could be in for a shock. Looks like orders are going very well indeed and we will see an impressive jump in H2 2023 and especially into 2024.
A good endorsement I would say
RBoC holding 5.25million shares / 3.87%
Looks a new holding to me
Anyone care to comment please ?
"Hedgehog, Harry Hyman isn't joining BELL's board."
No Agricore, he's not.
But the impressive track record of TMTA's 'shellmeisters' is relevant anyway.
Because the fact that people of their quality have agreed to a takeover by BELL is a very bullish endorsement of BELL's prospects.
From helpful the article you posted - thanks for that:-
"The only risk to this 9% upside is the deal falls through and then you're stuck with a holding without a purpose."
https://theoakbloke.substack.com/p/bell-onging-together
In my opinion, there's little chance of the deal falling through, because it isn't reliant upon raising any more funds.
And I can't really see that BELL would fail due diligence either. Though in theory, if it did, TMTA shares would likely hold up better than BELL, because of TMTA's cash underpinning.
In addition, TMTA would find another deal, possibly at an even higher premium.
It look to me that BELL are getting TMTA relatively cheaply, as the percentage premium over TMTA's cash isn't high for a RTO deal.
I think that TMTA have probably agreed to relatively generous terms because they think that BELL is a particularly good opportunity.
@Agricore. Thanks for introducing me to the Oak Bloke as I am impressed with his detailed views and financial analysis. A very readable style too.
Every BELL investor should read his articles, although it has not altered the share price trajectory which is disappointing!!
Feeks - Iām sure the youngsters will be reading this and laughing ā I would have been 30 years ago thinking these old twits, doing the W sign with my handā¦but it soon comes around. I was in corporate lending in a university city, science parks etc. for 35+ years with one of the majors. Used to do all the governance, assessing all the tiny details etc. before lending in the early days ā but after 20 years+, I knew if I was going to lend to them before they even sat down ā just by the way they walked into the office, their swagger, arroganceā¦ it became second nature to assess their character in seconds ā if I tried to override that first impression, it normally would go horrible wrong ā I suppose they call it gut feeling ā one of the reasons I am invested here, but still get the occasional one wrong! Anyway, a coffee, a bun and then some gardening! GLA
I agree with much of what you say BigBang. I think we would all do well to place the same level of trust in the words of an AIM CEO as we would the words of a racehorse trainer......
I know what you mean! ā Iāve also been trading AIM for 20 years+ and ftse 40 years, pre BigBang when you needed your own designated broker in London ā the fastest a deal could be done was the next day as the order had to be sent by post!!
I find the trick is to have a good spread ā a cluster of safe shares, but also a cluster of AIM wild shares.
I think of the cluster of AIM as a multicylinder engine, if one piston blows, there are several others to take over. If one does particularly well, skim some profit over to the safe shares.
Also, try not to get too serious about AIM, a bit like going to the horses, study the form and take your chances. There is always something unexpected that trots along, which throws a spanner into the works, so no point getting involved in the tiny details - but keep an overview as you will never get the full picture until itās too late! Agreed, there are some good profits to be made.
AIM should be interesting and fun ā if you are worried about it and it keeps you awake at night, you have too much invested and will lead to the wrong decisions being made ā Iāve done very well via shares and just trade for fun these days, but the trade must be large enough to make it exciting!
Having said that, I do have regretsā¦money isnāt everything ā you need to enjoy life/family before your health goes ā as they say, thereās no point being the richest person in the graveyard!!
Itās a case of getting the balance right, not only between safe and risky shares, but also life itself!! So go and make a coffee, donāt stare into the screen all day!! :)
Its interesting sitting on the sidelines trying to guess whether a SP will go up or down on news like today. On this occasion I was wrong! After 20+ years of AIM investing I do think there are rich rewards to be had if you can get your timing right but it takes a lot of watching and waiting, dispassionately. ZIOC another case in point, with its recent news, and maybe SED too (soon)
How many have missed this vital bit of news I wonder
Interest in DISCOV-R(TM) portable oxygen concentrator now exceeds 10,000 units with a potential sales value guidance of over US$30m
Hedgehog, Harry Hyman isn't joining BELL's board.
That's a really good spot on selling BELL and buying TMTA to convert back to BELL.
Whether it's worth doing is covered in this article: https://theoakbloke.substack.com/p/bell-onging-together
TMTA's non-exec . chairman Harry Hyman also has a very impressive track record:-
"Harry Hyman
Non-Executive Chairman
Harry Hyman is a chartered accountant. He is the founder and CEO of Primary Health Properties PLC (āPHPā) a FTSE250 Listed company that specialises in the ownership of property leased on a long term basis to primary care providers in the UK and Ireland. PHP has a property portfolio of over Ā£2.6bn and a consistent record of growth. ..."
https://tmtacquisition.com/
PHP's current market cap. is Ā£1.194 billion, at 89.35p/share.
He was also previously chairman of main-listed cash shell Derriston Capital (DERR), which floated at 10p/share, and which subsequently bagged a massive RTO:-
"Derriston Capital shares soar as trading resumes three months after deal to acquire Sorrellās S4 Capital
Jon Hopkins
14:40 Fri 14 Sep 2018"
https://www.proactiveinvestors.co.uk/companies/news/204948/derriston-capital-shares-soar-as-trading-resumes-three-months-after-deal-to-acquire-sorrells-s4-capital-204948.html
And SFOR subsequently nearly 9-bagged from low to high within three years, to a market cap. of billions.
It's intended that TMTA non-exec. director Jonathan Satchell will join BELL's board, along with TMTA's newest director Paul Tuson.
"Jonathan Satchell
Non-Executive Director
Jonathan Satchell is Chief Executive of Learning Technologies Group plc (āLTGā). LTG is listed on the AIM market of London Stock Exchange (LTG.L) and headquartered in London. LTG is at the forefront of innovation and best-practice in the learning and talent software sector, and has received numerous awards for its achievements both corporately and for clients.
Jonathan has worked in the training industry since 1992. In 1997 he acquired EBC, which he transformed from a training video provider to a bespoke e-learning company. The company was sold to Futuremedia in 2006. He became interim MD of Epic in 2007 and the following year he acquired the Company with LTGās chairman. He oversaw the transformation of Epic from a custom content e-learning company to the global, fast growing, full service digital learning and talent management company that LTG has become. Jonathan is also non-executive director of Zappar, the worldās leading augmented reality platform and creative studio."
https://tmtacquisition.com/
LTG's current market cap. is Ā£523 million, at 66.1p/share.
And LTG 40-bagged from its RTO price of 5.88p/share to its high of about 236p in 2021.
Closing s.p.s today:-
BELL 35p (32p - 38p).
TMTA 19.5p (19p - 20p).
On the basis that TMTA shareholders will receive 15 BELL shares for every 22 TMTA shares, the current TMTA offer price of 20p/share equates to a BELL offer price of 29.33p/share, i.e. 22.82% less than the current BELL offer price of 38p.
So TMTA is potentially a significantly cheaper way into BELL at the moment than buying BELL shares directly.
Wonāt allow a post
And it's only about 15% dilution, not 30%.
That comes out at 25.5p share price. you then have to factor in the funds enabling the company to start production (though how long that'll take to get going) and how, exactly the clns impact the sp is... frankly, beyond me.
my thumbnail is that 25.5p per share for the nearly 19million shares.