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Put simply, the deal price values TSL at about 85m GBP, the current market cap today is 56m GBP. The deal is pretty much all of the value of the TSL. So even if Block falls by 30% (say) from now until deal done, this (what am I missing?) would all be headroom due to the bit selloff of TSL.
For technical folk, there is support at about 50p on the chart. Could it be that's why the SP seems to have sold off more than it should?
Anyway I just loaded up on 25k of shares, with a spread of about 1.5% (I think it was 3%+ a week or two ago). Seems a no brainer - what am I missing?
" what am I missing?" That's what have been asking myself for days now!
some discount for the APT/TSL deal not completing
some discount for the Bank of Spain not playing along
some discount for the Block/APT deal not completing
some discount for TSL illiquidity
some discount for the time value
some discount for not knowing 'precisely' what TSL will do post receipt of Block shares (Yes, I know they have said they will return excess cash to shareholders but we don't know how much that will be and when)
But now standing at 40% discount to potential NAV seems somewhat excessive...
Thanks - where does the Bank of Spain come into it?
With Montarello owning about 30%, he has quite a vested interest in getting a reasonable deal.
There are never any guarantees, but this seems like a reasonable risk/return play to me. Probably with hindsight I will wish I had put in 10x as much, but in my view risk management comes first - I don't know what I don't know!
What you are missing? The mkt has lost confidence in the BoD and now worries about whether share holders will be stitched up and end up with something like 30p. The rest of the money being kept in the company which then delists. The directors then increase their remuneration etc. the mkt is looking at the rns in early December that suggested the fall to 80p was overdone when it is now 52p. The expected pay out was over 110p minimum. No explanation why the directors agreed to a cut price deal or whether they have been offered a new position in the buyer. No clarity as to whether the directors will vote themselves a substantial cash bonus and so on. So the mkt is nervy and is not impressed. Buyers, even at 50 pence, could end up with significant losses. Directors of a company that will soon be gone or delisted …..esp where they intend to retire….can lose interest in shareholders. Not saying this will happen at all of course but it will not be the first time by a long shot and they will be nothing whatsoever you can do. An accountant/ solicitor will sign off the deal as reasonable and you will get what you are given. I saw this as being very low risk but now? The risk is much higher and all these discounts being mentioned are just guesses in a situation where we all think the deal done was not great. The current price looks cheap if the directors can still be trusted.
Succinctly put Barnet...
Why anyone would trust this board now is bewildering!
Interesting! The remco (remuneration cttee) is comprised of two independent non-executive directors. So there is some governance in place to guard against overly generous remuneration, and of course the legal basis.
25. Related Party Disclosures of the results to 30.6.21 state that remuneration for all key personnel was GBP 423k. So if 50p became 30p that would mean their remuneration would need to jump to about GBP 20m. Given the governance in place, legislation etc that seems quite unlikely to be approved (and if it did, would carry reputational risk for the independents?). Admittedly I have an unwise amount of knowledge in this area so could be absolutely mis-reading the risk. If so (again!) where am I going wrong?
Regarding them de-listing, this would require 75% approval. Cant see that being voted for if the deal is poor as suggested. There is also currently 14% held by funds, which would most likely vote no to a bad deal.