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With today's RNS, the prospects are looking even worse than I thought they would be when I sold out at 5.5p just prior to the management changes. I'm sorry for those that have stayed with what was once a substantial group.
But with the new Board blaming the Maritime section, is this a ruse to lead the sp even lower so the largest holder can pick up the company on the cheap ?
Who know but I would like this debacle put to bed asap and moving on with positive newsflow .
Despite all the awful news, is the maritime focused group worth a punt at these levels ? LOL but seriously, 1.5p looks tempting ...
The way I look at this SAG have lost £7m-£8m in the value of its purchases of TPG at 5-6p. It would appear to me that they are tackling recent and old legacy issues (overseas acquisitions and onerous contracts). They want to buy this once fixed - not before.
Once these challenges are resolved and this is improving we will see a rerun of the takeover. (there must be a 12 month break which is 3 months away (29th Oct)). This will be because it's highly unlikely that shareholders will recognise the value but SAG will (they are the core of the TPG management team!!). If they offer 6.5p in SAG shares then I think most if not all will accept. If it's a lower offer then I just don't know but even the offer of say 5p will be more than triple from today's SP. Not great for long term holders like me but someone buying in today is laughing. I expect not many people are long term holders still?
TPG is in a great position for today's dangerous world and I have much more confidence in the new management team, but this share has required patience, a lot of patience.
GLA
Been here forever and then some. Yep 6.5p in SAG shares will have me.
Apologies, reading SAG's update today the 12 month break is 3rd September not 29th Oct as I said before. If SAG bid before then they'd have to offer 6.5p (but could still bid). The analyst's view is that they won't move to takeover until the onerous contracts issue is resolved. Of particular note is that SAG trades on a EV/Sales of 2x and TPG is on an EV/Sales of 0.22 (suggesting of course a price of around 13p for TPG could be "fair value" longer term)
SAG has £48.9m of cash (i.e. a net cash position of £23.9m, and an undrawn £25m RCF). At current 1.5p SP TPG's EV is £15m. So SAG could "afford" 4.5p if it chose to - and still unlock 3X value based on the 2X sales multiple.
4.5p would still be painful, however it provides a perspective on where the negotiation lines sit (particularly I suppose for the II's). And how it's a possible 2 bagger from today's price for any new buyers?!
GLA