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A decent priced placing today at c25% premium to raise £3.5m.
Says there is an opportunity available.
Must be trying to buy part of RBG.
RBG has 3 brands - Revolution, Revolucion de Cuba and Peach Pubs.
I suspect Nightcap are only interested in the cuba brand. It's a better fit to their current bars - Revolution is a disaster and Peach Pubs whilst the best of the 3 is a gastro pub chain (which was bought for £16m only 1.5 years ago).
Bought a few last week, as think this has a very good potential. To raise at the premium they are indicating only adds to that methodology. Top line is growing substantially from acquisitions, and pleasing to see strong operational cash flows (a large reason they report losses is due to Depreciation...) If they can start to reduce their LT-debt, this could be a very lucrative opportunity for shareholders. AIMHO, DYOR,GLA.
It seems that we won't know until September if the fundraising will be successful.
From the RNS:
The Issue Price represents a premium of approximately 30 per cent. to the mid-market closing price on AIM of 3.85 pence per ordinary share on 21 May 2024, being the latest practicable business day prior to the publication of this announcement.
Whilst the funds raised pursuant to the Subscription have been conditionally raised subject to the terms of subscription letters entered into between the Company and the subscribers, as at the date of this announcement, the total funding proposed under the Fundraising has not yet been raised and there can be no certainty that the Fundraising will proceed in line with its proposed terms or as to the amount that may ultimately be raised pursuant to the Fundraising. The Fundraising is not being underwritten by any person. The Subscription is not conditional on the issue of further New Ordinary Shares pursuant to the Fundraising (excluding the Subscription Shares). The obligations of investors pursuant to the Subscription will not be affected if the Fundraising (excluding the Subscription) is not completed for any reason.
Admission
Application will be made for the Subscription Shares to be admitted to AIM ("Admission"), which is expected to occur on or before 2 September 2024. A further announcement regarding the settlement of the Subscription and Admission will be made in due course.
Personally think this could be trading above 5p come September and think the BOD know that hence a forward premium. It needs a strong summer trading update of course and likely of the view could be some companies struggling at present, hence the reason they want to raise the cash to take advantage of this. If they cherry pick the good bars, then could achieve it's objectives and that may end up being a strong return for investors at these levels. IMHO, GLA,DYOR.
RBG's RNS won't help the fundraising. I would not be surprised if the fundraising quantum and pricing changes over the coming months.
IMO, RBG had to put a positive spin on their RNS, by claiming that Nightcap can't raise the funds necessary to acquire the company.
But reading into it, this was in very early stages, even pre DD, let alone any genuine valuations being put on the table.
I would much rather Nightcap sit back and go in again if RBG ends up struggling for cash again in the near future, then they can cherry pick the assets they want.
Question. Why would anyone pay 5p for shares in the fundraising when the current market share price is under 4p?
There is very little volume in the stock therefore if you wish to invest anything north of £5K, then you are likely to either have to place a limit order, wait and potentially miss out or move the price higher......The nightcap website suggests that order depth is only 100,000 share available if you paid 5p...… Effectively take it as a signal that people that know the business value the company at at least 5p per share.....and try and pick up some shares on the cheap if you can.
Looks like they are getting investment at the 5p they want and this is good news for current holders, whilst it still continues to trade at a 20% discount to this level.
They will be well positioned to take adventure of upcoming M&A opps.