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I’m surprised the SP hasn’t gone down more to reflect the likely reduction in cash in the business. I guess there’s uncertainty over the uptake of the tender offer, and some larger holders may decline to take part to increase their holdings after shares are cancelled.
I believe they’re due to announce tender results tomorrow, so we may see an ‘XD’ style adjustment then.
I’m hoping for a price of well under 20p (as low as possible obs), and will start buying again if that happens.
Uncertainty. Yes.
If the tender is under-subscribed it doesn't seem unreasonable to expect the shares to start trading at around 24p. If fully subscribed, there might be an immediate drop to reflect the the new cash value (although who will be selling in volume) but I suspect the real changes in SP are going to happen when it emerges which way the big holders (basically LOAM) have gone. Rightly or wrongly, I think their participation/non-participation in the tender will be interpreted as no-confidence/confidence in future potential and the SP will adjust accordingly. If they have participated (and quite possibly at much more than 38.5% of holding if PIs have been put off by the low tender offer / recent campaign of "good news") the next guess will be whether they are genuinely trying to exit or simply drive the price down to buy back in later.
Unfortunately, I don't think we will find out much tomorrow other than the level of uptake. It isn't clear to me whether major holders are required to issue TR-1 notices in connection with the tender, particularly if their percentage holding doesn't change.
What's happened has happened, but for me this was the most negative aspect of the way the tender was structured - it seemed almost designed to create uncertainty for PIs that can be exploited by large holders.
Good post..see what we can garner from subscription level…might not be much initially but a full subscription would certainly indicate that the larger holders have subscribed at least the 38.5%. Wonder what breakdown they give ? Certainly will have to announce what folks that oversubscribed got which will show the level of participation in the standard offer. Some number crunching will be in order!
If the tender was designed to benefit large shareholders at the expense of smaller ones i.e. deliberate exploitation or an abuse of power, how could it ever be proved ?
The only thing we can count on is uncertainty but one thing is certain, its always the poor that gets the blame !
To be fair the mechanism might have suited the larger shareholders consulted but all shareholders ( save the sub 2000 share owners ) have been treated the same and have the same opportunity to participate or not. There maybe some benefit to larger holders if the company start the share buyback immediately as some holders will not be able to deal in their shares or have the money paid out to try to buy back in the market at lower levels. I think from what BT said ..a special dividend would come off the price penny for penny that a major aim here was to get the valuation up through stealth ..since they do not need funding it seems a vanity exercise as much as anything..you want the price up demonstrate commerciality. Anyway lets see if it works, so far yes to a certain extent as the EV has effectively jumped but see what happens in the next week or so.
Oversubscribed then..must think the big boys subscribed fully or subscribed over the 38.5%?
“In total, 160,535,377 Ordinary Shares, being approximately 49.5 per cent. of the Issued Share Capital were validly tendered under the Tender Offer as at 6:00 p.m. on 9 April 2024 (the "Record Date"), meaning that the Tender Offer was oversubscribed. Tenders will therefore be accepted in full from Shareholders who validly tendered a number of Ordinary Shares equal to or less than their Basic Entitlement or those holders of 2,000 Ordinary Shares or less, irrespective of the proportion tendered. Following a scale back exercise, tenders in excess of the Basic Entitlement will be satisfied to the extent of the Basic Entitlement plus approximately 49.6 per cent. of the excess Shares tendered.”
Everyones perception of fairness will be different but those with the power have had a long time to think this through with additional info possibly not available to the minions - quite some advantage to exploit a situation IMO.
So appears if you tendered your whole holding you would sell about 69% of holding at 24p if i read that right?
Is 'how to deal with a tender offer' behind a paywall too?
BOOM! This is excellent news! :D I'm astounded but really pleased. This is absolutely the best outcome.
Of course it begs the question why shareholders thought 24p was a good offer and perhaps that sets a ceiling at 24p for now, however if the organic business (currently valued at £0) proves value and of the IP, the upside on this share could be tremendous. Wait for the offer to complete, see where the share price lands, then buy buy buy in my view.
I'm also really pleased because it would appear those IIs who voted for this have also supported it. I thinks that's actually quite charitable. I pose a hypothetical scenario, that STM scale up substantially over the next year, revenue projections become possible. At that point the share price will be comprised of a combination of a revenue multiplier and assets. There will be a rocket under the share price in this instance. Alternatively, nothing get released and Nanoco languishes around 20p.
" Charitable " - Mmmmmm
Flying
…if the organic business (currently valued at £0)
This is not true post this exercise at 20p the organic business will be valued at £14m..before it was valued at next to nothing and a some points a discount..still obviously leaves upside if the deliver but is valued a lot more than it was post tender. See where they settle.
Will be an interesting SP journey from here... Far reduced liquidity of the stock, Nanoco, starting today, will be in the market buying up to 21 million more shares. Expect tens of millions more shares were sold with the purpose of buying back in..
Meant *tendered*, not sold.
The take up of 69% of shares tendered at 24p implies thr big boys would rather take cash off the table as they dontvsee the share price going north of 24p for sometime yet while still holding a smaller pot!
The £3m on market buy back is simply a prop to try to keep the share price up from falling to the mid teens which it seems set to do in the weeks following 25th April.
Ergo if no material commercial deals are signed by June expect the price tp drift downwards, it may start high post 25th April but will inevitably fall.
Ahh yes but to be honest I expect the share price to drop back to 16-17p initially to reflect the same discount of the organic business.
Assets:
£23m cash
£10m roughly for the Runcorn site
200m shares would give a share price of 16.5p.
That's where I think this will land, then it's time to load up.
I get you ! Price short term might depend on buyback activity..but they are effectively going to be a passive participant it seems mopping up a level of any selling . Might support a bit.
TGTD, I'm not sure you can infer that from the information given. Nor are material commercial deals necessarily essential. But it will be good to hear when more of the orders arrive that STM has advised Nanoco to expect. Time will tell..
The action happens tomorrow in my opinion when the shares are bought and cancelled. I don't expect any significant buy backs to happen today at 20.6p when tomorrow they can be bought at possibly 17p or lower.
FH, if only the market was that logical... will those who sold at 24p wait for 16-17p... there will be some squeaky cheeks playing that game of chicken..
Kooba, it might be more than a bit of support. We will see.
Those looking to reinvest do not get the funds sent until the 25th and will need cleared funds to deal. In the meantime more shareholders wanted to sell at 24p than there was capacity so when some are free to deal they might want to sell more XENON..we can all paint pictures. Lets just see what transpires.
‘The action happens tomorrow in my opinion when the shares are bought and cancelled. I don't expect any significant buy backs to happen today at 20.6p when tomorrow they can be bought at possibly 17p or lower.‘
Doesn’t make much sense. The news is out so regardless of the mechanics of the tender, the market will adjust to, and price in, the likely value it perceives the company to have now, not tomorrow.
Ngr
They are trading ex the entitlement now ..so the adjustment should be getting factored in..its unclear to me whether folks who participated in the tender are free to deal in the balance of their holding or not..if you have sold up to 69% at 24p you might want to sell more here as an average ?.might be a factor?