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Thanks Patshare,
Not following your workings. If the CTH holding is worth £14.8m at a 750p takeout price and you subtract the 340k fee that’s £14.46m to LDG.
I’m also not sure what you mean by the share price being worse. Surely it’s better if you are a buyer :-) Where else can you buy £1 for 70p?
@zoolook - sorry, looks like I got my £23M from typing in the wrong price! Bl**dy novice!!
Without analysing every buyback RNS my best guess would be they paid around 15p on average, so total approx £21M, does that sound right?
Also, I quoted the CTH investment as the figure they have paid and not what it's worth currently, thought best not to include a paper gain.
Making those adjustments with Dbay taking 20% of the CTH gain actually makes the current SP even worse: £132M -£13.1M - £21M +13.1M + £1.7M - £340K (20% to Dbay) = £112.36M / 562M shares = 20p per share.
I still think the (revised) £21M could have been put to better use but guess we will never know, hindsight always being right etc. and what the markets do is anyone's guess, could have turned out even worse without the buyback.
On the plus side I made some money and didn't lose any here so not all bad eh?
I think the buying back shares well below the cash-per-share price was a good decision as it was an effective way to increase the cash per share price and it was the LDG Board’s ultimate decision, not DBAYs.
There is a limit to how much the Board can be held accountable for the share price. The market does what the market does and sometimes what it does is irrational leading to mispricing (long May that continue!)
Where I think the Board should be accountable is failing to proactively communicate the new investment case to the market and why investors should be interested above and beyond the asset backing and allay concerns about the relationship with DBay.
An inscrutable majority shareholder using their own decision of a buyback to buy their own shares using the cash reserves ultimately leaving us at the same SP as before, DBAY have a lot to answer for.
I think the more fundamental existential
question posed by the persistent low market price per share vs the price per share value is whether it should be listed at all. The appetite for a vehicle which has an inscrutable majority shareholder which is also making all the investment decisions is very low otherwise the share price would be close to the NAV.
I’m very tempted to go to the AGM
Patshare - where did you get your £23m from? That would mean they paid an average of 16.4p per share - which they haven’t.
Also the Caretech investment of £13.1m is likely to be worth £14.8m (with DBay taking 20% of the £1.7m uplift)
Was it all worth it? Good question.
Before the buyback LDG had £132M in the bank, give or take, but the SP was discounted relative to that figure, so they announced a buyback of 140 million shares to close the gap. It worked to a degree but look where it is now.
LDG/DBay have invested £13.1M in CareTech and spent approx. £23M buying back the 140M shares. They should have roughly £95M in the bank and the £13.1M invested, so about £108M all up; with 562M shares in issue the value per share should still be around 19p but it isn't, now dropped below 14p again.
So what was the real point of spending £23M buying back shares that could have been put to better use investing in something?
Good question, sadly I don't know the answer.
Anyone have any idea?
I'm still keeping an eye here even though I sold...... I thought that might happen with CTH, I would expect DBay to increase their offer very slightly now to maybe 755p or 760p but don't think they would want to go much higher than that.
And still no idea if they would be using any of LDG's remaining cash to do so.
Will keep watching to see what unfolds here.
I think the deadline for a formal offer is the first week of May, I expect the price to creep up leading into that if a deal is on the cards involving Ldg.
If successful with Caretech bid, I can't see why Dbay wouldn't use the cash in this company to finance the purchase.
Seems logical to me.
The mechanics behind how they do this, I'm not sure, but interested to see what happens in the next couple of months.
Still can't find any reason for downside at this point.
All the best PatShare.
Ryno - which ‘decent company’ are you referring to?
There's nothing to worry about here, if the company was to close you'd get about 19p a share. They've made one investment and already that's returned profit. They are potentially investing in a decent company further, with news due beginning of May latest. The last year the share price has gone from 7p to hanging around 15p. The people making the decisions own a quarter of the shares. Tell me the negative and why anyone would sell, apart from nerve.
Patshare it may turn out to be wise. I still have hope but think it may be a long term hold.
Sods law on thr new investment!!
*from
Jeez, I hate typos!!
Sorry Leedsman, just felt I had to do something.... anything....
If it's any consolation the investment I made with the capital form the LDG sale has already gone down!
I'm beginning to think I'm not very good at this......
Still a bit disappointed I could have had almost 16p here 2 days ago but not to worry, I can live with the outcome whatever happens.
Cheers!
Nooooooooooooo!!!!!
Sorry all, but I'm out, just sold @ 14.05p and took the profit, re-invested the capital somewhere else.
Right or wrong I don't know, only time will tell, but made a profit so no bad thing.
It's been great posting here and following the ups & downs, and learning a fair bit along the way so all good for a newcomer like me; I hope my posts have been useful and well-received too.
Who knows, maybe I'll be back here again some day?
Good luck all.
Hi all, I have to admit I didn't fully understand the last RNS but now I think I do - DBay have reduced their holding in LDG from 30.26% to 25.58%, right?
Looking back at the previous RNS re. Holding in Company dated 29/03 their 30.26% equated to 189,441,891 shares; the latest RNS shows their 25.58% holding equates to 143,701,525 shares, a reduction of 45,740,525 shares.
Now I think we know how Investec managed to obtain the 53M shares they needed to complete the buyback scheme and we we know from the final buyback RNS they paid 15.9p so DBay have pocketed £7,272,718.
Nice work if you can get it, not sure what it means for LDG and us investors going forward though, if anything.
Is anyone able to tell exactly how much cash LDG has in the bank now the buyback is complete and they have invested approx. £14M in CTH?
Agreed Zoolook. That confused me to. Think you have to be suspicious when the price didn't go up with final part of the buy-back.
All these smokes and mirrors ultimately thankfully in my mind don't change the fact they have a certain amount of cash in the bank and their only investment they are currently making a profit on.
If the buy-back didn't work as Dbay ultimately wanted they will end up doing some sort of tender offer is my next thoughts. Or this Caretech conclusion might help get some needed clarity...
Bizarrely looks like DBay was a big seller from the last RNS. Personally I think it’s positive if they become less dominant but I’m sure it will add fuel to conspiracy theories..
I think a lot of investors genuinely expected the buyback to push the SP higher, I know I did. I understand the aim of the buyback was to close the gap between the discounted SP and the NAV and on reflection I agree it did that, but I still don't understand why the first 28 days of buyback raised it from around 13p to almost 16p - it never quite firmly achieved 16p - but then the final crazy push yesterday that saw the remaining near-53M shares needed to complete the scheme had no effect at all.
As a result the SP is now only marginally higher than the 13.something p price we had before they bought back a single share.
I must be missing something but it just seems odd to me.
It would appear the SP was held back but hopefully that hasn't backfired as disillusioned investors clearly dumped today and the SP fell even further; tomorrow could bring more of the same unless LDG have an announcement up their sleeve.
Let's see what happens in the morning, maybe all will become clear then.
Chesterinvestor - that doesn’t tally with the reality that the SP moved up when the buyback got underway and has now dropped when the buyback finished. PI’s seem all too quick to jump to the conclusion of market manipulation when SP’s don’t move they would wish.
Share price has been held down until the buy back is totally completed by LDG.