Member Info for 1GW_

I was tempted to sell the rest of my holding when I saw that TU. But I just can't quite bring myself to do it when I look at Sports Direct, Toscafund and Schroders sitting there holding around 60% of the company between them. I feel they really ought to be able to sort something out between themselves, whether that is an outright takeover or just banging heads together to get a decent distribution agreement between Sports Direct and Express Gifts. So I think I'll stay in for a while longer hoping that common sense prevails.

Well I don't think that was worth waiting for was it?

I suspect we're due one soon, which might be interesting. Last year it looks like they put one out on 4th April. With the interims they gave guidance for FY17 of: Revenue: Euro 125 million to Euro 135 million Profitability: improved profitability in H2 (vs H1) If they are broadly within that guidance then they might be able to get away without a TU for a while, but if the outcome is now expected to have been significantly different then I don't think they'll have much choice.

I think this has very little if any practical relevance, but as always I could be wrong so please do your own research. To start with the Alphagen letter of intent was non-binding - it just expressed an intent at the time it was signed. But it contained a paragraph which said that if Alphagen ceases to have full power and authority to instruct the acceptance of the Takeover Offer in respect of the Shares, then they would let Hytera (and the Panel on Takeovers and Mergers) know. It has been public knowledge for some time that the Volantis team was moving from Henderson/Alphagen to another company. This was the team that was covered by the letter of intent. So all that appears to have happened now is that the team has formally moved and so can no longer make commitments (such as they were) on behalf of Alphagen or Henderson, and Alphagen can no longer make commitments on behalf of investments which transferred out of Alphagen with the move of the Volantis team.

Partial good news I think. Unambiguously good that they've got a deferral on the tests but significant I think that it doesn't go up to the long stop date for the acquisition of 30th June. So a bit of breathing space up to mid-May while they see if they can either avoid the UK review or get it done quickly I suspect. I would guess the option to further extend might be to give a bit of extra time for completion of the UK review if certain other conditions precedent have been satisfied.

Steady on. The fact that: 1) the share price is under 14p vs a takeover price of 20p; 2) none of the 1% holders appear to have bought more in the 2 days following the German regulatory news and before the UK news; and 3) the comment from Sepura in yesterday's rns that "Sepura continues to evaluate the potential process and implications of such a review if implemented" suggests strongly to me that there is a lot of uncertainty around whether this takeover will complete. The key for me, apart from Hytera's current view of the acquisition, is the attitude of Sepura's lenders and the cashflow situation. In the half-year to 30th September, Sepura reported $36m of net cash consumed by operating activities. That is a lot, considering the cash and equivalents number at the 30th September was only $11m (plus $4m of "restricted" cash) and they expected to need a waiver of debt covenants this month. They did admittedly appear to have a big excess of receivables over payables which might help if they can collect the money and a healthy inventory balance as well. So it seems to me the lenders are going to call the shots here, assuming Hytera is still interested. Will they really be happy to advance more debt to keep Sepura ticking over in the hope that one day the acquisition completes? If not, can Sepura keep paying its bills until then? If the lenders decide that they can get more money back, on a risked basis, by forcing the company into administration or forcing asset sales rather than waiting (and maybe advancing more loans) in the hope of the acquisition completing then I presume they will do so. Given Sepura said that it expected to need a waiver of some of its covenants from March 2017 I expect to see an rns on the subject by Monday at the latest.

Very disappointing rns. Alarming shades of the other PPI issue. Makes me wonder how much more might eventually be needed. So I've sold a bit more than 1/2 of my remaining holding. Undecided about the rest, but will probably keep them to see if they can put out a decent trading update in the next few days.

This looks anything but standard to me. "Sepura continues to evaluate the potential process and implications of such a review if implemented" You've got to be kidding. We're already quite a while after they expected the merger to have completed, before they got the news about the German & Spanish competition review timetables. And this isn't the UK competition authority, it's the "Department for Business, Energy & Industrial Strategy ", so it looks more like this might be an issue with the Chinese getting into the emergency services kit rather than competition per se. I wonder what the lenders make of this? Still no word on covenant waiver.

So apparently none of the declared institutions felt confident enough to buy yesterday, but equally none of them appear to have sold into the bounce.

Chesh - the issue as I understand it is that they need the bankers to play ball on the covenant waivers or it puts the agreed terms of the acquisition at risk. e.g. if the bankers insist on material asset disposals by Sepura before the acquisition completes then that would probably give Hytera an out, or at the very least the chance to renegotiate. I would have thought that Sepura ought to have been able to convince the bankers to waive the covenants until the backstop date for the acquisition, assuming that the bankers believed the acquisition was likely to go ahead. But this depends in part on the extent to which the financial situation of Sepura is deteriorating with each passing month. The bankers could decide that waiting for the acquisition to complete is too risky because there won't be enough value left in the company by then to repay them if the deal does not complete. Now if they really have got a pass on the German competition review then that ought to bring forward the expected date of closing and therefore I am surprised that Sepura could not also announce that they had reached a deal with the lenders on covenant waiver. But maybe that will come later this week. It will be interesting to see tomorrow's 8.3's to see whether BNP and other presumed arbitrage players have been buying or selling today.

I think the next expected significant event is probably a comment from the company on its talks with the lenders on covenant waivers, which I thought had to be resolved in March. Could be a reasonable move up or (especially) down depending on what they say.

Hmmm. Isn't the implication that they escape the German competition authority's grasp only because their turnover in Germany has fallen so low? Presumably it has come in lower than they were expecting when they started the German phase II review. So a question might be whether this indicative fall in German revenue is representative of overall revenue in 2017 and if so whether total revenue for 2017 is going to come in significantly lower than Hytera would have been expecting. Also rather strange that they don't mention progress on trying to get the covenants waived don't you think?

Have you looked on NEX (previously ISDX) for the "missing" trades? Quite a few trades of 22,229 shares listed for yesterday, priced at 13.55p http://www.nexexchange.com/company-all-latest-trades?isin=GB00B1ZBLD47&listingtypeid=PLSL

Yes I'm still invested here after my partial sale and still hoping for evidence of continued improvement in the pre-close (or post-close) TU. But getting a bit frustrated with the lack of progress on a Sports Direct deal as well as the relatively slow apparent progress of the business turnaround. I originally bought in in September'15 at around the £1.70 level hoping they could turn the share price decline round and encouraged by Toscafund being back up close to 30% at the time and also having Schroders with a large holding - so I thought corporate action was a possibility. I added around £2 in later September when there were some large trades go through which turned out to be Sports Direct getting in with the (apparent) help of Toscafund and Schroders. I then bought several more times (and took some profit once) hoping for progress on either business turnaround, a deal with Sports Direct or a bid from Sports Direct. The specific share I wanted to invest in yesterday was Berkeley Homes. I have been a long-time bull of the UK housebuilding shares and relatively recently began building a position in BKG to go with longer-held positions in CRST and TEF, and a speculative position in BVS (taken after the recent announcement of potential corporate activity). The reason for wanting to buy before the FDL TU was that BKG is due to update on Friday. If you want to see more details of my reasoning for CRST, BVS or BKG I have documented some thoughts (as 1gw) on the a d v f n bulletin boards. For TEF I tend to use the LSE board.

so I've sold some this afternoon to raise funds for something else.

I think if it were that straightforward the Sepura board and their advisors would have built the time for a Phase II German review into their indicative timetable to completion. I can only conclude from the indicative timetable (expected Effective Date of the scheme 20 February) in the Scheme Document that the Sepura Board believed that a Phase II review would not be necessary, and presumably because Sepura and Hytera were strong in different market segments (Sepura in emergency services vs Hytera in commercial).

"Anglo-German rift opens up as stock exchange tie-up approaches collapse" I suspect the LSE-Deutsche Borse fallout isn't going to make things any easier for the Hytera-Sepura deal to get through the German regulator. https://uk.finance.yahoo.com/news/anglo-german-rift-opens-stock-113500517.html

An rns saying they had sorted the covenants would help the share price I think. Also an 8.3 notice showing an institution was buying. But failing that, if the price moves up much don't you think BNP will sell into it? They were selling at just under 14p earlier this week and haven't made much of a dent in their holding (currently at 2.51% down from 2.94%).

gfd - are you sure about that? I thought a Takeover Offer was an alternative way of proceeding if they couldn't get the Scheme of Arrangement through. From memory, although the Takeover Offer has a higher threshold for completion (90% of shares controlled I think) it doesn't have the "majority in number" test and doesn't have the exclusion for shares already held. I don't see why Hytera couldn't buy on the open market so long as they made timely dealing disclosures. The problem I think is that there isn't a lot of liquidity at the moment and as soon as they made their first dealing disclosure the price would be likely to jump as people realised how serious they were about completing. And if they do want to try to renegotiate price they compromise their negotiating position somewhat if Sepura knows they are buying on the market. Equally if they fear that the merger may fail for competition reasons or because the company ends up in the hands of the administrators then they're unlikely to want a minority holding.

Looks like while I was replying to this one, the posts suggesting technical insolvency were removed. Did someone complain?