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Seems that it may have been a tactical prepack to escape some of the costs that were weighing heavily on the previous owners. Keep the best sites, let the creditors go sing for their money. Legal of course. Is MW keen to compete with his old firm, or is there a merger in mind?
What I found interesting was the comment by Tile Giant's restructuring advisor (Interpath Advisory):
"... While retailers specialising in DIY and home improvement enjoyed a period of growth during the pandemic, the squeeze on disposable income caused by the current cost-of-living crisis is now starting to place significant pressure on cashflow ..."
This may be true for Tile Giant and its ilk but, at least uptil now, TPT doesn't appear to be suffering any similar problems (as evidenced by the c10% increase in Group sales in Q1 FY23 and the net cash of c16m and revolving credit facility of £30m at the end of Q4 FY22). TPT seems to be well positioned and despite the likes of Tile Giant have gone through the process of a pre-pack (the phoenix rising from the ashes) it's a smaller proposition than it was before the pre-pack.
That's got me wondering whether our 30% holder may corner the UK market. You know, Poles are not allowed to hold dual-nationality, so, if there is a prospect of a Russia/Poland war some people may seek safe haven.
I see Tile Giant has entered a pre-pack administration. It caught my eye because it was recently bought by Matt Williams. The Times article was at pains to point out that he was the former CEO of Topps. He left over 3 years ago!
It all seems a bit odd to kick-up a fuss and then go quiet. I'm thinking an offer could be made?
Can't say fairer than that ... an extra stronng prescription I suggest ;-)
Trotsky: My English is fine, however when you are wrong its right to admit it - I do - with apologies to you................................... and I have booked my appointment at Specsavers.
Gruyere, I suggest you re-read Resolution 16 and go back to school to learn English. The resolution (put forward by MSG) was to REMOVE the Chairman and over 100m votes were cast AGAINST that proposal! I suggest that you go to Specsavers yourself. It was a ringing endorsement of the Chairman!
I don't think we'll have to wait much longer for a possible response from MSG, otherwise I think they'll just let it go.
Trotsky - you should have gone to specsavers yourself mate;
'On the flipside, only 1% of the votes cast for Resolution 16 (apart from MSG's) favoured removing the Non-Exce Chairman, Darren Shapland! '
Really? There were 100 million votes FOR re-electing him as a director, agreed. But not at 16, it was 100 million votes FOR removing him which was the same number that rejected the appointment of the MSG nominees.
A message was being sent - as I said, hardly a ringing endorsement.
Merger/takeover would effectively be the same thing and create the same potential issues for both parties. Virtaully all of the non-MSG votes cast at the AGM were against MSG (effectively) taking control by the backdoor and a merger wouldn't be any less desirable (would offer MSG a means to take control without paying a premium). A standalone partnership would allow Cersanit to enter the UK market and take advantage of Topps's existing warehouse, distribution and website support without gaining access to Topps's existing business and supply arrangements.
Topps would of course have to consider whether the potential advantages of usch a partnerhip (upmarket focus, wider product range, more cordial relations with MSG etc) outweigh the potential disadvantages (possible cannibalisation of existing business, possible affect on existing supply arrangements etc) but it might help end the standoff.
A merger might be mooted.
The last paragraph should have read:
"From Topps point of view they would have to consider to what extent they might end up cannibalising their existing/future SALES before agreeing but from Cersanit's perspective there would be clear advantages (they could use Topps existing storage, distribution network, website support etc). Topps would remain independent and be able to tap new REVENUE STREAMS."
The advantage of such a venture is that Topps wouldn't have to open up its books to MSG/Cersanit; the partnership would operate independently of Topps. Also, it might provide opportunities for Topps to (indirectly) tap parts of the market it's not already reaching and sell other ceramic products, not just tiles. It's not without its pitfalls (for both parties) but it might work.
I think you need to change your prescription ;-)
Allowing for the fact that only 82% of potential votes were cast (which is not unusual given PIs normal indifference and the fact that not all nominee stockbrokers permit shareholders to cast individual votes) and that 29.8% of the potential votes cast were by MSG (effetively 36.4% of the total votes cast), then I think this was a ringing endorsement of the BoD.
MSG were never going to endorse the BoD, the auditors or their remuneration (it would have been totally contary to their requisitioned resolutions). So, if your strip out MSG's vote, no more than 5-6% of the votes cast for any of Resolutions 1-15 were favoured by other shareholders. That's pretty par for the course for most AGMs in my experience.
Resolution 15 only failed because it required over 75% of the votes cast and, given that MSG were always going to oppose a motion that prevented them calling a meeting at short notcie, that resolution was never going to pass (because MSG control over 25% of the potential vote).
On the flipside, only 1% of the votes cast for Resolution 16 (apart from MSG's) favoured removing the Non-Exce Chairman, Darren Shapland! That's a massive thumbs down for MSG and its proposals. As regards the potential for the BoD to over remunerate themselves I think it's pretty clear from this AGM result that the directors will have to be sensible (Resolution 3 was the only resolution that garnered any significant resistance - about 6% of the votes cast - other than MSG's).
Clearly MSG are going to be a thorn in the BoD's side but as long as TPT continue to deliver on plan (macroeconomic issues aside) then MSG aren't going to be able to garner the support they need to take control of TPT by the backdoor. MSG now has to decide whether to launch an all out bid (as I've posted before, I think it would cost them more than they are willing to pay to enter into the UK market), divest (that could be tricky if they want to maximise value; I think their current holding is under water) or simply become an acquiescent long-term investor.
If MSG is going to launch a bid then it's probably going to be sooner rather than later (because Cersanit probably can't put off a decision to launch Nexterio UK indefinitely and the cost that will entail). Alternatively, Cersanit launches Nexterio UK and MSG looks at a tie up with Topps much further down the line when Nexterio UK is firmly established.
That said, there is another option that both parties might consider; Topps and Cersanit could look to go into a profit sharing partnership here in the UK to launch a standalone Cersanit website. From Topps point of view they would have to consider to what extent they might end up cannibalising their existing/future before agreeing but from Cersanit's perspective there would be clear advantages (they could use Topps existing storage, distribution network, website support etc). Topps would remain independent and be able to tap new r
The board prevailed...or did they? It hardly looks good that the majority of resolutions did not receieve much of an endorsement even allowing for MSG's holding. Clearly they are opportunists but also have highlited failings and complaceny in management. Still - that won't stop the directors rewarding themselves first and the shareholders last - a practice not restricted just to Topps.
Don't worry. I was confused when I saw it because they'd have had to launch a formal bid if they acquired more than 30% (if it wasn't for that I wouldn't have given it much further thought and automatically assumed the same as you)
Yeah, I misread it. I was never good with reading and numbers.
Actually, MSG's interest is 29.8%, not 29.9%. I thought their might of been something in the rounding of the percentages but I forgot that only 99.3% of the others voters who cast their vote supported the BoD on resolutions 16-18 i.e. 0.7% of other voters supported MSG (that may have been down to a typo in the original voting documents that were issued for electronic voting that may have been overlooked by early voters and not subsequently rectified; the original documents said that the BoD "supported" resolutions 16-18!)
No, MSG don't own 36.4% of the issued share capital. Only 81.9% of shareholders eligible to vote actually voted. So, MSG's 29.9% interest in the whole ended up representing 36.4% of the votes cast. Just goes to show how shareholder apathy could so easily allow MSG to get their way.
MSG appear to hold 36.4% according to today's rns.
2 points that I see,
first the % is based on only 71% of total votes because it says without MSG %. holding, so I guess you would expect that.
Second now that MSG have a bloody nose will they now make a full bid to show their true aims , or just let it go.
It'll be the notified amount. If it were more they'd have to issue an RNS
Looking at those percentages, I am now wondering how much of the company MSG actually hold.
So, there you have it, MSG frozen out by the other holders.
They've made their wishes very clear, so they'll have to bear the consequences.
"The Board would like to thank shareholders for the support received at today's meeting. We were pleased that shareholders supported the Board's recommendations, with an average of 99.3 per cent. of shareholders who voted, other than MSG, opposing the Requisitioned Resolutions.