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So we go from being suspended at 0.95..do a great deal with Megasteel to relist Q2 at 2.2p..to relist Q3 at 0.5p..something stinks.
A shafting of the highest order me thinks..I've only got this and one other position running and I'm done with the markets absolute joke for retail investors.
Doc Holiday I think put about £70k in here..
Lately unless you get lucky all the market seems to do is sh*t on you constantly, more than I have ever known it to.
How the actual F do they think us losing 80% of our investment is a 'good deal' this is blatant corruption by the board, retail getting shafted yet again, goodluck getting us to vote this through.
So megasteel have done a megarunner.
Odear time for the board to go.
Anyone supporting a change of board needs disclose holdings and support for change
Then hopefully we can secure a decent deal and benefit us retail holders
So the deals is off which is good news, let's sort the board out and there are apparently better deals out there...onwards and upwards.
Just to clarify: Megasteel haven't done a runner, and the Megasteel RTO hasn't been aborted (yet): the terms have been changed, which is very different.
Well done to both sides for 'thinking laterally', in being willing to proceed without raising more funds.
That said, my view is that Megasteel is a good RTO for TMOR, but at the wrong shell price, and I'll explain why.
Megasteel looks like a very impressive and exciting growth company:-
23rd Sep 2022 7:45 am RNS Acquisition - Megasteel and Suspension of Trading
" ... In its financial year ended 31 October 2021, Megasteel made audited pre-tax profits of £3m on turnover of £19.7m. ..."
https://www.lse.co.uk/rns/TMOR/acquisition-megasteel-and-suspension-of-trading-ccsbb9s9yt991oi.html
22nd May 2023 3:30 pm RNS Update on Proposed Acquisition of Megasteel
" ... Megasteel is a cash flow positive , profitable, business, which reported audited post tax profits of £5.34 million, on revenue of £30 million, in its financial year ended 31 October 2022. As at that date, Megasteel had cash of approximately £10 million and therefore has no requirement to raise any additional funds. ..."
https://www.lse.co.uk/rns/TMOR/update-on-proposed-acquisition-of-megasteel-pwaoo4yy004oj3o.html
And its CEO Nigel Roberts has shown himself to be a negotiator of brillance, to extract such a lowly shell value from TMOR. That bodes very well for him cutting good deals for his business - in both buying and selling.
Moreover, the value being attributed the Megasteel is comparatively modest.
The problem is that the value being attributed to TMOR isn't just comparatively modest, it is clearly way below even its minimum current fair value for a RTO.
That I believe would be c. 1p/share: which is still a 55.5% price reduction from the previous level of 2.25p, which would still be more that the % price reduction in Megasteel's valuation.
And I think that TMOR shareholders are entitled to it in view of this statement from yesterday's RNS, which would otherwise be completely false:-
"The Directors believe that this material reduction in valuations retains the relative post-completion ownership of the Enlarged Group ..."
A further changed in the terms to 1p, from 0.5p, would provide a 100% benefit to TMOR shareholders compared to the latest proposals, but at a cost of only c. 2% to Megasteel.
I don't believe that Megasteel would be able to get a better RTO deal that that elsewhere, especially as other shells would be wary of dealing with them if they've been seen to reject fair value from another shell.
That would leave the IPO route, which might not fully recover for years, and would still be comparatively risky and uncertain, and require Megasteel to give away a far bigger share of its equity.
So I'm afraid I'm going to have to vote a 'sad no' to a 0.5p Megasteel RTO, but would willing support a 1p deal.
If it proceeds on that basis, the s.p. could still potentially reach 2p by the
"If it proceeds on that basis, the s.p. could still potentially reach 2p by the"
The end of the last sentence in my last post was cut off: it should say:
"If it proceeds on that basis, the s.p. could still potentially reach 2p by the end of the year."
Megasteel's post tax profits of £5.34 million last year suggest pre tax profits of c. £6.6M. on a 19% corporation tax rate, i.e. well over double the previous years.
The post-RTO market cap. at 1p, on a 1p shell valuation for TMOR, would be just £32.125M., with c. £10M. cash.
I.e. a enterprise value pre-tax profit multiple of barely three, for a cash rich company growing like Topsy!
Clearly you would expect the s.p. to move ahead very strongly, and in due course be a very good multibagger.
That said, I think there's a good chance that TMOR can extract better RTO terms, once it becomes apparent that shareholders won't back the deal as it currently stands.
They need 75% of the votes cast to get the deal through, which is quite a high threshold.
I am sure the pumper doc can afford to loose the money, he said he was done with aim and then came back never trust the guy he plays the game.
Don’t blame the player, blame the game 👍
Correct me if I’m im wrong but it seems that Megasteel were the ones who F**** over the BOD and they were left with no choice but to agree to those terms inorder to conclude the deal.
yes the deal could have been better but it seems the BOD were between a rock and a hard place.
I am not convinced the deal was as bad as is being made out, from what I take from it Megasteel were valuing TMOR at less than current mCap or ~ 0.5p per share which IS a significant discount, but the mCap/SP is just a reflection the SP when trading was ceased and not based on anything hard or substantial, if they started trading tomorrow there is no guarantee SP would not drop to 0.2p which would make 0.5p a bargain.
I am not saying the deal on the table is good or bad, but there are positives, one I see is removal of fundraising which in this market where any fund raise = punishing dilution thats a good thing. The next point is that VALUING TMOR at 0.5p for the purposes of the takeover does not mean that we get 0.5p per share that we hold, we STILL hold our shares. When the enlarged new company starts trading there is ZERO guarantee about what the opening price will be. IF the takeover bring significant value to TMOR (or whatever ticker they switch too...) then it could still gap up to 1, 2, 3p etc.
On paper, very quick scan easy to assume we were about to be shafted but honestly IMO its not as black and white as that, and regardless, looks like the shafting is not happening anyway so atleast they have listened to shareholders, rightly or wrongly.
Its is not Docs fault, and no he does not play games, he will have been just as miffed as the rest of us.
24th May 2023 12:04 pm RNS Update on Proposed Acquisition of Megasteel
" ... faced with an unwarranted tirade of abuse and vitriol directly addressed at them, the Board and owners of Megasteel yesterday afternoon formally informed the Company that it was withdrawing from the Acquisition. ..."
https://www.lse.co.uk/rns/TMOR/update-on-proposed-acquisition-of-megasteel-lhq7fm45bwyvavh.html
Can't be too disappointed about a 0.5p RTO being aborted, however good an investment it may have been from there .
Obviously Megasteel were at best lukewarm about floating, and to a degree abused that by insisting upon rip-off terms, that there is no way would have been supported by 75% of the TMOR votes cast.
TMOR aggravated the situation by blatantly lying in Monday's RNS with this piece of statistical nonsense:-
"The Directors believe that this material reduction in valuations retains the relative post-completion ownership of the Enlarged Group ..."
So while I don't condone the abuse, I can understand it. It would have been better though to have been constructive, and see if the RTO price could be raised to 1p (which would cost Megasteel just an additional 2%.)
So I agree, a wasted opportunity, but one for which TMOR's board and Megasteel are primarily responsible.
If they use a value of 0.5p instead of 2.25p then it means they need to issue 4.5 times more shares to pay the circa 31m GBP.
So there is a bis difference.
Can't help but feel the issue regards abuse is nothing more than a cop out, telling me businessmen are offended by abuse, come on...
From today's RNS:-
"Following this exercise, it became clear that broad support existed amongst shareholders to continue with the proposed Acquisition, with them making a final decision upon the publication of the final prospectus and at the subsequent General Meeting."
There may have been support for the acquisition per se, but not necessarily on the 0.5p terms.
I haven't seen one poster say that they would vote for the 0.5p option: the closest is JustHereForHemo earlier today who is broadly neutral.
Why would anyone vote for giving away the asset (i.e. TMOR) for half it's minimum current worth for a RTO?
The difference to TMOR shareholders of 1p v. 0.5p is clearly 100% more, but only adding c. 2% to the enlarged equity.
That's because the price being paid for Megasteel doesn't change, you just issue half the number of shares at double the price; and TMOR's share of the enlarged equity nearly doubles from 2% to 3.9%.
As at 31.20.22, TMOR's cash was £1.151M., and it's first year costs from 4.3.22 were capped at £50K.
It's market cap. at 1p would be £1.25M.
You'd think Roberts would be made of sterner stuff, being a man of steel. But I don't believe much, if anything of what BOD says. The shareholders they spoke to were nit in favour but simply decided to see what the final deal looked like before they would say NO.
I'm not sure BOD would understand your logic Hedgehog. They were played and difficult to trust them now to get another deal for us.
He plays games, and never think he is what he sees, hes nothing but a player and a pumper and a dumper. you only have to read twitter to see some of his pumps and his friends pumps and dumps
What makes you think or feel that?
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Rod McIllree, executive director of More Acquisitions, said: “The termination of the proposed Megasteel deal represents a massive, wasted opportunity; not only for More shareholders, who have now been deprived of their right to decide on the acquisition, and potentially benefit from it, but also for the wider London stock market. The More board understands and empathises with Megasteel’s owners, whose first direct ‘interaction’ with individuals purporting to be UK small cap investors has proved to be such a distasteful and unpleasant experience.
“The company will now restart its review process with a view to identifying other suitable acquisition opportunities for More.”
Megasteel was established in 1991, initially specialising in steel for the reinforced concrete. Since then, it has become the largest distributor of wire and steel for the prestressing and post tensioning of concrete in the UK.
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A deal to acquire a Wiltshire steel company has collapsed amid claims of abusive and threatening behaviour.
The £31m deal to buy the Malmesbury based Megasteel had been agreed by M&A specialist More Acquisitions.
But following an announcement on the stock market regarding the deal the board of the Wiltshire firm were subjected to a tirade of abuse and vitriol.
As a result of the campaign by people claiming to be More shareholders the Megasteel board took the decision to pull the plug on the deal.
More Acquisitions has since published details of the hate campaign in a statement to the Stock Market.
Revised terms of the proposed acquisition were published this week and the board of Megasteel were holding detailed conversations with More stakeholders.
Following the discussion both the More and Megasteel Boards agreed to press ahead with the deal which would have taken place in the autumn.
The statement to the Stock Market revealed unsolicited and unprecedented actions by “individuals other than the shareholders directly contacted by the company” made it impossible to move the deal forward.
The statement said: “In particular, it has become apparent that parties claiming to be shareholders in More have approached Megasteel’s management and owners directly in recent days and engaged in abusive and threatening behaviour which has, understandably, been viewed as totally unacceptable by the owners of Megasteel.
“As reiterated in earlier announcements by More, Megasteel is a cash flow positive, profitable, business, with a year-end cash position of over £10m. There is, and will remain, no financial or operational imperative for Megasteel to seek a stock market listing.
“It is therefore completely understandable, if entirely regrettable, that, faced with an unwarranted tirade of abuse and vitriol directly addressed at them, the board and owners of Megasteel yesterday afternoon formally informed the company that it was withdrawing from the acquisition.”
The statement added: “The directors believe that termination of the acquisition at this very late stage, after over eight months of successful due diligence, is not only deeply disappointing but was also entirely avoidable. But for the completely unacceptable and profoundly offensive actions of certain individuals, all More shareholders would shortly have had a chance to individually decide whether or not to approve the Acquisition.
“It is self-evident that shareholders in More have the right to make their views known to the company and its professional advisers, a right which observers will be aware has been properly and legitimately publicly exercised by a number of company stakeholders in recent days. However, aggressive, abusive and threatening behaviour, targeted directly at Megasteel’s owners and managers, is totally unacceptable.”