Member Info for 1GW_

Stockdale - I agree that all we have at the moment on the table is a recommended offer from Hytera. Anything else is speculation and the most probable outcome in my opinion is that Hytera get Sepura at the price they have offered. But I believe there is a reasonable probability that something else will happen. I think there is a relatively low probability that the deal fails because of regulatory issues or shareholder rejection and I also think there is a slightly higher probability that a counter offer is received. Note that the Sepura Directors "intend to recommend unanimously that...". I believe (but am not 100% sure) that if a competing offer that was demonstrably better than the Hytera offer comes in before the shareholder meeting then they would be bound to change their recommendation. The only thing the board have "irrevocably" committed to do is to vote their own shares (2.83%) in favour of the Hytera offer.

One other comment on the "competing offer" scenario. It clearly (in my mind) envisages the scenario of a third party making a "paper" offer (i.e. shares for shares or shares+cash for shares), not just a cash offer. This is because of the words around "reasonable opinion" as to whether the competing offer is actually 15% higher than the Hytera offer. There would be no need for opinion if the competing offer was purely in cash.

By "other fund" you mean Henderson Global International as opposed to AlphaGen? I presume the use of the word "procure" in the description of AlphaGen's commitment ("to vote or to procure votes in favour of") means that although AlphaGen is the subsidiary which has signed the letter of intent, it is essentially speaking for HGI as well and will "procure" that HGI votes its shares in favour of the agreement. That is how the letter of intent can cover the full 36m shares held by HGI and AlphaGen combined.

This is very definitely not a done deal. Apart from the issue of regulatory clearance - including various Chinese approvals - there is explicit consideration of the scenario of a "competing offer" in Appendix III of the document published on Friday. I suggest everyone reads it carefully. Henderson in particular (through their subsidiary AlphaGen Capital) have given only a "letter of intent" (and not an "irrevocable undertaking") to vote their shares in favour of the deal. No details (other than the company signing it and the number of shares involved) seem to be given in Friday's document and I would presume from what is given that there is no "right to match" a competing offer for the Henderson shares to lock in the Henderson agreement. So my interpretation is that what we have is an agreement/intent from the Sepura shareholders listed in the document to vote for the Hytera offer until something better comes along. If something better does come along then some of the shareholders have agreed still to vote for Hytera if Hytera improves its offer to match the better offer. I also presume those that have given the "irrevocable undertaking" will not be able to sell the shares involved before the vote. It is not clear to me whether the same applies to Henderson/AlphaGen (because the text of the letter of intent is not given). It is also not clear to me whether the shareholders involved are still in possession of insider information and so will be unable to buy or sell shares until the shareholder circular with more details of the offer and the reasons for the recommendation are published. i.e. did Sepura have to reveal new financial details of the state of the business or the demands of the lenders in order to convince the shareholders to give their support or did they only reveal the level of the offer, which is now public?

We'll see any significant buyers in the 8.3's tomorrow. If anyone is stake building I would expect them to delay their 8.3 as long as possible (ie until near 3:30pm) to give them most of tomorrow to buy before declaring. Then when we see who is buying we can speculate as to motive.

To be fair, Jamesroo, after the Times story, the interims were published with the statement from pwc about the risk to Sepura being a going concern if the sale were not completed. Now that can't have helped the Sepura negotiating position.

Or rather, I doubt Motorola would have begun formal due diligence, because this would indicate serious interest. They may well have requested the basic information memorandum.

Cassius. I'm fairly sure each company will do its own due diligence! But Sepura will make available all the info already supplied to Hytera to any other company it believes is a bona fide potential bidder. I doubt Motorola would have requested the info memorandum before Hytera bid because that fact could have leaked to Hytera and changed their initial bid.

If another company is interested then I agree a formal bid might not come until January, to allow time for due diligence. But Sepura would probably want to announce (or leak?) that there was another company interested as soon as they got an approach - hoping to prompt further interest. And that could do wonders for the share price.

There's a "however" on the end of the statement in the Sports Direct report: "Viewed together with our strategic ambitions; our focus on improving working conditions; near term succession planning; approach to the International business; and, our review of corporate governance, the Board believes it prudent to pause on actively pursuing strategic acquisitions and investments. However, this does not mean we will not continue to review and consider attractive opportunities that may arise." So MA might argue that the Findel attractive opportunity has already arisen and he is just in the process of delivering it. But I agree that statement would tend to suggest that Sports Direct would focus on the distribution agreement with Findel before they get round to considering full acquisition. Personally I think this would be the way to maximise value (albeit on a rather longer timeframe) for Findel shareholders rather than go straight to a bid for the company. i.e. if Findel and SPD can make the distribution agreement work so as demonstrably add value to both companies then that should set a higher starting point for subsequent acquisition discussions.

Their share price woes continue. I thought this was an interesting section for Findel shareholders in the Sports Direct half-year report this morning: "We continue to elevate our sports retail proposition for our key third party brand partners and customers, as we progress towards our medium to long term goal of becoming the "Selfridges" of sports retail. We are changing our retail channels for customers in the UK, and we will be changing our approach to our customers in Europe, which will take time." So if they want to move their stores up-market, at least in the "branded" section, then it seems to me a better online/mail-order option might be a good thing for them to help maintain & grow volume. Although they talk in the report about their work on their own online offer, it seems to me taking control of Findel's operation might allow them to speed things up considerably.

...what else is there to say?

Findel seem to be stretching the definition of "shortly" here, even allowing for FCA involvement. Here's hoping for a bumper set of good news on Wednesday. 13th Oct: "The search for an independent Executive Chairman to replace David Sugden, who had intended to step down at the AGM, is ongoing and we expect to make a further announcement shortly. "

...and I wonder if the quantification of that risk could have been a stumbling block in any negotiation going on between Findel and SPD. What chance the announcement of (1) a new chairman and (2) some sort of agreement with SPD follow in the fairly near future now?

That's a relief - I'd forgotten it was still out there. Presumably the removal of that risk changes the value of Findel in the eyes of SPD.

...entitled "Positive Momentum" This has been added to the Findel site already (under "research") which in itself is perhaps noteworthy. The note itself is a flash update which doesn't really add anything to the trading update and the previous Edison analysis. They reconfirm their sum of the parts valuation at what now looks to be a rather uninspiring 240p. "The potential in Express and the option on consolidation opportunities in Education appear undervalued."

Looking back, I see Findel does seem to favour "post-close" TUs (e.g. 1st October 2014, 1st April 2014, 31st March 2015) over "pre-close" ones (e.g. 24th March 2016). Am I right in thinking this 1/2 year would be the 27 weeks to 30th September, rather than the 26 weeks to 23rd September? I find it somewhat confusing having a variable period-end.

Nearly 7m total. End game approaching?

Nice round numbers in that trade...

Nice round numbers in that trade...