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Received message from HL
Vote is Dec 21st
Quite a few BUYS going through today @ 262P - why??
Me too - will be "interesting" to see if SP drops by the full 10p once it goes ex-div.
I have decided to hold on for divi to give it a chance for counter bid etc but will likely sell and re-invest next week after ex-div day. Can't really argue with good gain even if more value to be had
I've done most of the same, but I still hold some as we should get a 3% dividend and a very outside chance of a higher bid.
Just to be transparent, I have now sold all my shares. I think it's best to take the 70% profit and reinvest it into my other instruments - many of which are beaten up. Rinse and repeat.
GLA
I had a quick skim of the AGM resolutions and didn't see anything about the offer / accepting it. Have I missed it or will this be voted on another time.
From the flavour of this thread it looks like retail investors will probably have some push back but whether it makes much difference is another thing. I would like to see offer of at least £3 to be happy.
"Any suggestions on where to reinvest this cash? I’m far too concentrated to redistribute into my remaining holdings."
LorenzoLynch,
First of all, well done to SCS shareholders on being taken over at a 66% premium.
As regards where to redeploy the proceeds.
Well, those looking for a quick potential repeat may care to look at Parity (PTY): market cap. £2.11M. at 2.05p, 2022 revenue £40.6M.
PTY's net debt as at 30.6.23 was only £0.7M., and the company was close to EBITDA break-even.
PTY may well currently be considering takeover overtures.
For an outstanding GARP play, I would recommend Newmark Security (NWT): market cap. £4.92M. at 52.5p.
NWT's revenue in its year ending 30.4.23 was £20.31M., with EBITDA of GBP1.5M.
JPM now own 8.25%. Maybe they know the intentions of some of the other top holders to veto this?
Things could get very interesting.
If one decides that the SCS management-backed offer of £2.70 + 10p is the floor price, then it makes sense to buy-in now at £2.70 with the hope of further upside.
Seems (to me) that there are some insts still picking up shares. Are they really doing it just for the 10p dividend?
Raggedtp,
I always avoid investment trusts, but it sounds like you’ve found some bargains. I’ll take a look. Thank you.
JP Morgan and now Goldman Sachs RNS a small holding.....
Sorry - I meant J.P. Morgan who gave the recent holdings RNS.
Very interesting raggedtp - I am researching those this weekend. Thanks.
I guess all of us SCS holders are thinking where to go next. With most of mine I have decided to stay here until we get the £2.70 + 10p. Morgan Stanley clearly agree, so perhaps there is more to come.....?
How about Investment Trusts right now: GCP, GSF, TENT all trading > 40% disc to latest NAVs, with confirmed divs of >10%? Opinions welcome, as I feel I want to buy more....
I was a shareholder until the offer came in. My valuation of SCS is (rounded down slightly to account for psychological resistance at round numbers) £3.50 per share. That said, this is based on several assumptions, and is a fair value figure which I would expect to achieve upon economic recovery. While I don’t have a crystal ball, I think we’re approximately 2 years away from that.
That’s 30% upside in 2 years; a satisfactory return for the buyers, however, when opportunity cost is taken into consideration (there is much more upside elsewhere imo) and the return is adjusted to account for risk, for me, selling my shares was an absolute no-brainer.
SCS is an exceptional company imo, but I think the offer was equally as exceptional.
Any suggestions on where to reinvest this cash? I’m far too concentrated to redistribute into my remaining holdings.
Although I am not a shareholder of SCS, I have been viewing the business with content for some months. For an entity that has shown impressive management status over the years, I would think Shareholders are to believe the Board haven't realised the true benefits In which they have postioned the business. A consistently higher than average and growing return on capital, whether that be ROIC, ROCE or ROE metrics, do come at a premium sale price tag. I would assume the sale of just 30mil of net cash is not desirable for Shareholders, depending on what their own individual circumstances are. I would hazard a good set of conservative assumptions that the sale value Is far short of the fair value over the next 3,5 or even 10 years which shows a opportunity cost loss. The business trades far short of it's peers and I would think the Italians are rubbing their hands together if Shareholders agree. I would reject the offer.
Brilliant news........until I realised my 3,920 shares cost me £12,211.
LTH, as you will have guessed.
Very fair point....
There’s only one reason they announced this nonsense BEFORE the results and that’s to flatter the offer as much as possible by saying it’s a 66% increase. This is why they postponed the results.
Let’s see if 280p still looks good tomorrow.
8 large funds are majority share holders, they won't accept this low ball deal.
Im holding here for proper money or I will wait 3 years for growth.
The board are stitching this up for early retirement....!
Agreed. Selling for ~£100million when we have £70million+ net cash is laughable. Board wants a quick payday.
"Under the terms of the Acquisition, ScS Shareholders will be entitled to receive:
280 pence for each ScS Share (the "Transaction Value").
· The Transaction Value comprises for each ScS Share at the relevant record date:
270 pence in cash (the "Cash Consideration")
and
a final dividend of 10 pence for the year ended 29 July 2023 which is not conditional on the Acquisition becoming effective (the "Permitted Dividend").
The Transaction Value values ScS's entire issued and to be issued share capital at approximately £99,387,946 on a fully diluted basis."
Considering we have £70+ million in net cash. Selling the entire business for £20 million is pretty pitiful if you ask me. Although maybe I'm just bitter I didn't buy more shares when I knew it was a bargain.
Personally, I’m looking for 320p (achieved May 2021) as an absolute minimum. The company is hugely undervalued due to subdued market conditions and general sentiment, but I have no doubt 320p is achievable when the economy rebounds as we move through the short-term debt cycle.
I shall be rejecting the offer.