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Thanks for the analysis everyone - it is most appreciated by those of us less mathematical on here. Frankly, looks like a win win position is emerging for everyone compared to the previous alternative.
Just hope something like this can emerge with Debenhams!
Pearls- I wouldn’t say this is a win win just yet (though looking better),still a huge amount of risk here if no deal can be agreed between lenders and Coltrane. Even though we have a deal on the table if enough shareholders reject it, then this will go down the admin route if Coltranes plan is not accepted.
https://www.google.co.uk/amp/s/www.consultancy.uk/news/amp/20475/ey-reportedly-in-line-to-administrate-ailing-interserve
http://www.cityam.com/273825/hope-renewed-interserve-rescue-refinancing-plan-gives
Thngs definately looking more positive for all. Hoping the gamble of sitting tight does pay off having bought at 26.5p. Still a lot of game time to go I suspect before it all fully re establishes.
Imagine if the BoD had managed to push through their original deal (6bn shares @ 8p now)!
They would have been lynched!
This SP rise is what would have happened after that deal and the lenders would have doubled / trebled their money in hours, let alone days ....
This share is desperate to fly, on good news. Just look at where their main competitors shares start at £1.20 plus - post DfE they will have less debt / EBITDA than any of them.
Unfortunately,one of the things that has saved the SP (the 20p RI) may put in a glass ceiling for a period of time until the terms of final DfE deal is announced - then it could start shifting very quickly...
BoD - Do the Right Thing!
GLA
What news is due tomorrow ?
Tartan- the refinancing arrangements
Thanks Bill, Have Coltrane now laid all the cards on the table, what is the meeting at the end of March for ?
Not sure if it will be tomorrow (others may know?), but this week the BoD will outline the proposed deal or deals.....that existing shareholders will vote on.
5% to existing shareholders (lenders already on board)
10% to existing lenders (Coltranes' deal)
or a hybrid deal ? 7.5% to existing shareholders
If either the 7.5% or 10% deal is put forward and gets approved by existing shareholders then the share price will rise significantly
I'm not sure the 5% deal (that has today been priced in to the current share price) would get voted through anymore as the value here indicates that would be too good a deal for the Lenders and too poor a deal for existing shareholders
GLA
Not sure if it will be tomorrow (others may know?), but this week the BoD will outline the proposed deal or deals.....that existing shareholders will vote on.
5% to existing shareholders (lenders already on board)
10% to existing shareholders (Coltranes' deal)
or a hybrid deal ? 7.5% to existing shareholders
If either the 7.5% or 10% deal is put forward and gets approved by existing shareholders then the share price will rise significantly
I'm not sure the 5% deal (that has today been priced in to the current share price) would get voted through anymore as the value here indicates that would be too good a deal for the Lenders and too poor a deal for existing shareholders
GLA
See my previous link
Feilb-plan will be announced tommorow with the meeting taking place on the 26th.
Tartan- on the 26th the shareholders will either vote for or again the deal. If the former then the lenders will own 95% of the company, new shares will be issued to them and the sp will adjust accordingly. If the deal is declined then the company goes into administration and the lenders take it private.
Thanks again Bill, will shareholders be given the choice on the 26th between the existing lenders plan with them taking 95% and Coltranes plan giving shareholders 10%, or will be the BOD that chooses which options to put to the vote
Tartan- read the rns. No mention of deals, no mention of votes, just that at Coltrane's request, a general meeting has been convened "Interserve Plc ("Company") announces that it is today posting a circular to shareholders (the "Circular") containing a notice convening a general meeting of the Company requisitioned in accordance with section 303 of the Companies Act 2006 (the "General Meeting") by Coltrane Master Fund, L.P. The General Meeting will be held at 1.30 p.m. on Tuesday, 26 March 2019 at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2AG"
Tartan- BoD decide which option which will be put forward to the vote. It may contain an alternative but it that might be worser than what they are proposing, won’t necessarily be a better deal.
Bill
The deal could and should be a lot better than the 5% offering
Let's hope the BoD do not get it wrong twice in a row!
It would be embarrassing to say the least, if they put forward the 5% deal and it doesn't get supported.
And I see this now as a massive risk. Unfortunately not everyone has grasped that even at 5% the Lenders more than double their money in a short period of time.
The BoD have made a massive mistake already - 2.5% !!!!
But should not try and cover this up with a 5% mistake
They should back Coltranes deal and stand up to the Lenders.
If they get this wrong they will be replaced.
5% is just not good enough!
Less debt under Coltrane's deal........why would they just bend over to the lenders and take it, unless they are looking out for themselves and not Interserve.
Further I would suggest a 5% deal is still "obscene" and would be judged as an absolute disgrace in the future.
Still time to sleep on it and "DO THE RIGHT THING"
Meta- the vote and deal is mentioned by City AM. The refinancing needs to be done by March, so I’m guessing the votes for the deal will take place before the AGM unless they get a further deferral.
Feilb- yes it would be embarrassing if they got this wrong, but didn’t have no self esteem to start with. What you have to remember is they are big kickbacks for the BOD for getting ludricous
deals such as this through over the line. You only have to look at Jarvis and Mouchel as an example, where the BOD were paid a few hundred thousands of pounds each to get the d4e deal through.
The 5% deal is still ludricous as you say it’s still below the current share price and for the robust business IRV is. I was tempted to sell today at 20p and buy back In at a later date, as this could tank like anything tommorow or shoot up like a rocket, but couldn’t justify selling at a 65k loss.
What spooked me was City AM apparently quoting from a well placed source that they will not just give in to Coltrane easily. After all why would they? They will not get the 500k each that the banks will give them should they get their deal through.
Bill
I think it would be very very unwise to propose a deal tomorrow without Coltranes buy in.
But people in tight corners make strange decisions........we will see what tomorrow brings.
Feilb- yes but if the BOD cared about Coltrane, they wouldn’t have proposed the 2.5% without Coltrane’s to begin with since they are the largest holder. The fact that they did just shows how much they value Coltrane’s view.
That they threatened administration at the 2.5% offer yet still doubled that offer to 5% shows that the bluff has been called once. The problem with Coltranes plan, as I see it, is a practical issue of sequencing. If it takes place like this: 1. Irv propose the 5% deal (presume 2.5% must be off the table now?) 2. Shareholders reject that deal. 3. Irv go into pre pack administration Then Coltrane wouldn't even get the chance to put forward their proposal between 2&3? This is absolutely game theory and there are so many scenarios that could happen now.
Meta
I'm Coltrane, the 5% deal has just been voted down. The lenders say right pre-pack as you owe me £66m. I will purchase £75m new shares at 20p to pay you the immediate debt. And by the way in doing so, I now own 415.5m shares out of a possible 525m that's 80% of Interserve. I think I will bring my own BoD. Let's start looking at which part of the business I can lose all this nasty debt.....
Guesses where it ends today?