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Don't understand what you mean here, riddock57. The share price has been hovering around £1.90 for many weeks ever since that was the price CSC agreed to pay for the takeover. In other words, there is no speculation left in this SP unless rumor dictates another. very, very late bid is on the horizon. The SP did its big jump from around about £1 last autumn when the first of a few potential suitors, Capita, came bidding at £1.60. Or, am I missing something in what you are saying?
4 people only buy 1 share and another person buy only 10.
Hi, so I had initially accepted capita offer and now they have lost my share certificate. Anyone know what my options are? Thanks
Over to you now. No longer so cheap DYOR
by David Campbell, Selin Bucak on Dec 07, 2015 at 05:00 Veteran hedge fund manager Crispin Odey’s firm Odey Asset Management, has increased its stake in outsourcing company Xchanging (XCH).
Time will tell if another offer appears.
My broker informed me that the deadline had been extended, and are waiting a response from myself.As I had previously accepted, i am unable to sell, so will have to wait , and hope the other offers go through, or capita up their offer.My latest response required will be not to accept, but as I said, I made my choice so gotta live with it
So what will happen if you have already accepted the capita offer?
Now someone else wants to buy Xchanging http://www.telegraph.co.uk/finance/newsbysector/supportservices/11998821/Fight-for-Xchanging-attracts-another-US-suitor.html
American bidder enters the fray in fight to take over Xchanging http://www.telegraph.co.uk/finance/newsbysector/supportservices/11991785/American-bidder-enters-the-fray-in-fight-to-take-over-Xchanging.html
How lucky, rang my SIPP manager and told him to sell my holding when price was £1.59. Been out all night and just got in to see rise. Thank goodness SL are so slow in transacting and I didn't miss out - got £1.70 for them :-) Now just need bloody commodity prices to start rising!
With Apollo falling away, and nothing else on the horizon, looks like Capita have this won. Shame, I was hoping xch would find a way to avoid being absorbed by Capita...or at least push the price up closer to£2. I think Capita have themselves a bargain.
Well we are a week out from the original deadline for the companies making a bid. Will Apollo use the extra time that they have now got or will they stick to the original time line and state their intentions this week? As a shareholder I obviously hope that they firm up on their bid at 170. Clearly I am biased for the aforementioned reason but if Capita, who were a few weeks ahead in their due diligence, found nothing to put them off their bid at 160 then I am optimistic that the same will apply to Apollo with their 170 bid.
OK, thanks El Prof. That makes sense, alongside Filshare's comments. I have spread bet XCH but it is a shame no bookie offers odds over whether it will be Capita or Apollo who wins out. That's because I would wager a lot of money that Capita win through. At what price though? Well, we shall see! Good luck.
HI Phoenix, You asked why was the Xch Board favouring Capita or was this just the way the game was played when there are more than two bidders circling. My view is that the Board is not particularly pro-Capita but are just playing the game. I agree with Filshare's excellent analysis in its entirety. We have to remember that the share price over the summer has been predominantly in the 90s and even dipping into the 80s. The Board knows that if this falls through because of mishandling by them then the big holders are going to go after them taking the smaller holders with them in a class action as Filshare remarks. So far I think the Board is playing this perfectly. They were approached over the summer by Capita with a ridiculous offer although it was still a 50%+ mark up on the share price at the time. They rebuffed them a couple of times and then when Capita put in a more serious bid at 155 they partially opened up the books, confident that this would drive a higher bid which it did at 160p. I don't believe it a coincidence that Apollo are on the scene too but presume that the Board after the Capita approaches had decided that the best way to maximise shareholder value was a sale and so either Xchanging or their brokers touted the company around the big PE firms and Apollo liked what they heard. With two players going through Xchanging's books the risk was always that there would be something there unpalatable to either and that the takeover would collapse. The impact of that on the share price would have been disastrous as it would say to the market that when looking under the bonnet two companies had decided they did not like what they saw. We are fortunately beyond that, as witnessed by Capita firming up their offer. The Xch Board has been quite right to say it will 'recommend subject to...' as we now have Capita locked in with a floor of 160p, a clear signal to any prospective third bidder that it all looks good under the bonnet, Apollo still going through the books to determine if they wish to follow through on their 170 knowing that they can't adjust their bid downwards as Capita are in that price space and finally Capita having reserved the right to go up in price if Apollo do bid. Well played Xchanging Board!
I think the chances of 1.70 being exceeded seem to hinge upon a 3rd bidder turning up, or Apollo increasing their offer. An important point to bear in mind is that Capita probably need only to match the Apollo offer to win the prize - that is if no other party comes in. I say the latter because it seems to me that if Apollo and Capita were to both end up tabling identical offers then Capita would surely win because the XCH board are favouring Capita. I believe they have reasons other than size of bid for this - IE to ensure Lloyds still receives the service they have now. I must confess to being a little surprised at how the XCH board have lent towards Capita so openly from so early on. With two bids on the table did they need to say what they did? You are right Filshare, same as El Prof, that we now have £1.60 locked in. Hence, I have now spread bet XCH in case we do start moving over the £1.70 level. only using a small part of my gains though. Overall, though, XCH's share price should tell us all something about the market! Two weeks ago, the market valued XCH at 1.05 or thereabouts. But two big companies, having now seen the books, place a value of 1.60 to1.70!!! I think we all knew XCH was badly undervalued by the market but it still goes to show that the market can be very wrong sometimes. Anyway, good luck to all still in (and to my new spread bet!)
I may be wrong but my reading that the Capita bid is now firm, due diligence having been presumably completed, whereas the other offer has some conditions still on it. Board are recommending capita unless a firm better offer comes in, and this i think locks capita in at a minimum of £1.60, protecting lion share of shareholder gains to date, and therefore protecting the directors from a shareholder class action if it all falls thru. This implies to me that 1.60 is the bottom end of a range that the BoD have settled on. Apollo may yet put in a firm bid, (and their timescales to do so have now changed) but recommendation may even put pressure on them, to up their bid above the conditional 1.70. If capita found mothing scary in due dilligence then some of the risk of appollo coming out is removed. Of course they may calculate that they wont be able to be able to outbid capita, and decide to pull out of the race to avoid wasting fees and time, which would be a shame for shareholders.. Presumably xch would have to declare any 3rd bidder that asks to look at the books, but suspect 3rd bidder would have to up the ante above 1.70 to join the game. In summary, I agree with Prof that there is more upside than downside, .160-190. Range ?.. market is still pricing in a modest increase on the capita reflecting the risks of Apollo pulling out and no one else joining, but at 5p a share I'm happy taking a punt on landing higher. DYOR, GLA..
You may well be right El Prof. I do have a track record of cutting out a bit too early! In July I saw a four figure loss in a company called STM turn into a four figure profit inside 3 weeks. I cut out, as my target had been exceeded but the share then put on enough to have given me an extra 50% gain!!! With XCH, I also think I am a little biased because of how an ex-Director told me £1.60 was the value per share the board had in mind for the company (See an earlier post of mine). But that was almost four years ago now and things have changed since then. I will certainly be spread betting this over the next day or two and then I'll be willing on the price alongside you again! Last thing, though. Why do you think the board are so keen on Capita? Were they mindful to take £1.60 before Apollo came in or is this the way things are played when more than one bidder is circling?
Phoenix, Great to hear that you have made a good amount on the share and even better to hear that you have crystallised it! I have taken some profits but left the majority on the table as I am pretty confident that we will see a bid from Apollo at 170 and then a higher bid from Capita at 175. Not sure whether it Apollo will then go in again but I think the ultimate buyer will be Capita (at 175 if Apollo go once or 185 if they have come back with a 180) as they will get the greatest synergies hence will be able to afford the greatest price (unless Apollo see the insurance software as a goldmine, invest heavily in it and flog the company in a few years time for a multiple of the current value - who knows!). Thanks for explaining your logic for exiting. I admire your wisdom and lack of greed. I do wonder whether I am doing the right thing in staying in for the bids however having been invested for so long I feel that I want to see the journey to the very end. Let's hope I don't regret it. After this morning's firm bid by Capita I feel more comfortable as we now have, barring disaster, a floor at 160 and as I wrote in my earlier post, room for upside. Best wishes, Prof.
Hi El Prof and others.. I have watched this potential bid with interest and, I must confess, off loaded the majority of my XCH holding last week at close to £1.70. My reasons were as follows. 1/ XCH was a 'trading share' for me, not an investment one. I bought at 1.28 earlier in year and forgot to put a limit order in at 1.43, which was my target. It hit that while I was away and then fell back hugely after KL resigned. Hence, I was pretty pi**ed off having missed my target price through a mistake. At 98p ish I more than doubled my holding and so was pretty pleased by the two bids. After weighing up my other reasons below, I decided to cut out with a very substantial profit which had arisen like a phoenix from a hefty paper loss! 2/ As soon as the bids became public it seemed to me that the XCH board much preferred the Capita one. I believe this is because the board have good relationships with Lloyds of London and are always going to favour a takeover where they can assure the latter that service will stay the same. Perhaps Apollo would be as equally as competent as Capita but my gut feeling was that the XCH board would be very mindful of the service to Lloyds. I also know that one or two board members had some bad experiences with a US private equity outfit when they bought another similar, but smaller, outsourcer some years ago. 3/ There is an old saying with share trading (not so much as with investing) which says 'let others enjoy the top of the market because they run the greater risk of suffering the bottom'. So, all in all I decided the gamble was that a bidding war would ensue that I would miss if I sold. Perhaps it still will but, again, my gut feeling was that it wouldn't, largely because XCH seem to prefer Capita. This said, one major investor seems to believe 1.60 isn't enough. What will happen if they oppose the Capita bid will be interesting. Of course, I could be very wrong but nobody got poor on taking profits, let alone substantial ones! As I said just now, one of the main investors in XCH seems to think £1.60 isn't enough so there is still quite a bit in this but I am out now and can only wish good luck to those who stay the distance - I may well still join the remainder of the race but only with a small spread bet from my profits. Good luck all. phoenixchi
A good development this morning with Capita putting a 160p bid in as this effectively puts a floor under the share price at that level while having no effect on the potential upside. Apollo are still in play and if they confirm their bid at 170p, Capita has reserved themselves the right to come back at a higher price. Capita have plenty of upside here and they can afford to pay quite a lot more. Clearly they are not going to pay any more than they have to so in the absence of another bidder joining the merry game the key question is how far will Apollo go when they have not got the same scope for synergies as Capita.
Capita cannot buy above £1.60 as they would have to increase the offer price. So they are frozen out of the market at the moment. DYOR
HI Mcfirth, Big but not massive in the context of a company in takeover talks. I would have expected to see a steady flow of deals of this size as Capita and Apollo seek to build up positions. What do you make of the fact that we are not seeing that? Best wishes, Prof.
Massive trade ?
... given the current likelihood of a takeover but the 20 day average has just shot through the 100 day average. Hoorah, anyway!