Member Info for 1GW_

...continued to drop in August according to the Euroclear data: Jun 5.0m shares on loan (average) Jul 3.4m Aug 2.6m

It's all a negotiation in my opinion. I read the RNS as saying that although they have decided against offering MA the chairman's role both sides are still negotiating - so perhaps some board position is still in discussion. I don't see how Findel board can sustainably frustrate the wishes of Toscafund and Schroders (allied with SPD) so I hope they are on board with the negotiating strategy. I still think both sides want (and perhaps need) a deal: Findel would find it difficult in the near-term to find another deal as good as an SPD distribution deal and I think SPD would find it equally difficult to find another distribution deal which offered as much potential as Findel. So if egos can be managed there really ought to be a solution and the important thing is for neither side to do something which kills the deal. I also think a distribution deal might be the optimal path to realising most value for Findel shareholders - because that gives the underlying business more time to show its potential and the deal itself should provide a boost to the shareprice, meaning an eventual take-out by SPD would be at a higher price than if they are forced to bid now. Anyway FWIW I put a limit order in yesterday morning to buy at 162p (when the spread was 160-165), the spread almost immediately moved to 162-165 and the order was not filled by the close of play.

They have to say something about the status of negotiations over SD and the chairmanship don't they?

My own view is that in allowing Sports Direct in in the first place, Toscafund and Schroders probably expected an end-game in which Sports Direct obtained control and saw this outcome as one which maximised their expected returns over the medium term. If that is the case, then the next step in their strategy would appear to me to be securing the commercial arrangement for distribution of SPD product by Findel, which should be a win for both companies (i.e. FDL and SPD). Whether this comes at the "expense" to Findel shareholders of a seat on the board or even chairmanship, is largely tactical and will be down to the negotiating skills of the Findel board and SPD. If MA does end up on the board then it will be in all other shareholders' interests I believe to ensure that there are adequate protections in place to ensure that any further deals with SPD are on a proper arms-length basis and MA is not able to use his privileged position with FDL to skew value-share towards SPD. Easier said than done of course, but I don't see why non-SPD shareholders shouldn't be aligned on trying to achieve this outcome.

I did notice this comment on the outlook though which highlights high street footfall as an issue for Sports Direct and optimisation of the online capability as a mitigation. It seems to me Findel might be seen as quite a timely move for sports direct if they can agree a distribution deal, if not a full takeover. "When combined with the structural difficulties for UK retailers, including high street footfall, and our exposure to the weakness of the pound against the US dollar (as announced on 24 June 2016), these factors make the current outlook for FY17 somewhat uncertain and therefore hard to predict. We shall continue to focus on delivering an enhanced retail offering for our customers through an expanded product range and availability as well as optimising our online capability to benefit the overall Group performance."

Considering we seemed to be stuck with a 170p resistance barrier a few days ago, and we traded as low as 130p on 24th June, I view being stuck at a 200p resistance barrier as hugely encouraging...

...going through at 200p today.

Lost a bit of my post as well. The para on the "upside" scenario should have finished... ....Once MA is happy that the Findel deal brings the benefits he anticipated to SPD then he moves to secure control of the company through a bid for the remaining shares. All being well, the share price would have re-rated by this time and so the bid would be at a significantly higher level than it would have been had he bid before the distribution deal was proven.

Ejackson: "What has it cost to do this? Well, the simple answer is, not much. A 30% shareholding is very roughly double what Fanatics paid for Kitbag but MA gets the client database, the upside to Express Gifts, a fabulous new warehouse distribution centre and no wage bill." I think perhaps I could challenge that analysis a bit. MA (or SPD) has paid roughly £50m I would estimate for the 30% position (£30m for the initial 15m shares @ £2.00 each and £19m for the other 11m shares at £1.70 each, assuming those 11m shares were effectively acquired at around the £1.70 price that the big trades went through at on 24th March when the CFD position seems to have been acquired). Kitbag was acquired for £14m (£11.6m headline plus £2.3m adjustment), but it came with £17m of net assets including £19m of inventory offset by £12m of payables (if I am reading page 89 of the annual report correctly). So net of net assets Kitbag appears to have been acquired for free (but taking on some future losses) and even if you had to write off all the receivables and gave no value to assets other than inventory the "premium" was much less than the headline number. Post the sale of Kitbag I think the "danger" to Findel minority shareholders of having SPD on the board or even holding the chairman role is much less than it was before the sale. The benefit of a distribution deal between SPD and FIndel should be significant to Findel. So personally I welcome the apparent rescuing of the situation. We now (apparently) have a fully-engaged SPD holding 30% of the shares and keen to pursue the distribution deal. This is fantastic news compared to the alternative of having a frustrated and potentially vengeful SPD holding 17% of the shares plus a derivative. In my mind a seat on the board is a price well worth paying for delivery of this deal and even the chairman role could be acceptable if the board can convince themselves that the chairman would be sufficiently focused on Findel and that conflicts of interest could be managed. How MA would convince the board that he had time to be executive chairman I don't know, but I presume he will try and if Findel could secure this commitment then it might be no bad thing. I'm not sure if "asset stripping" is a risk, but given the lack of product overlap post-Kitbag, I would have thought any such risk is manageable. The synergy here appears to be SPD product with FDL distribution which ought to be a win-win subject to fair terms being negotiated. So the upside scenario for me is that they do the distribution deal, MA gets on the board (maybe as chairman) and the company then makes demonstrable progress on its financials over the next 6-12 months, causing a re-rating of the share price. Once MA is happy that the Findel deal brings the benefits he anticipated to SPD then he moves to secure control of the company throug

Sorry - correction: 17.3m shares (20%) but only 15.1m voting rights (17.5%).

I thought Schroders "always" had 20% didn't they? Their September TR-1 declared 21.9m shares (20% I think) but only 17.5% of the voting rights.

Indeed. So they have presumably converted their CFD into actual shares. I'm very happy to see them putting money on the table. It suggests to me that this could ultimately lead to a bid for the company if the commercial arrangement works out, so we might even do better this way than have a bid straight away I.e. if the commercial arrangement works out then the share price should improve over time and then SPD may decide it would be simpler just to have outright ownership, which would cost it a premium to the share price at the time it makes that move. Have to wait for a further holdings notice to see where the shares came from I suppose.

Interesting reading this line from the results about the search for a new executive chairman in the light of today's news: "The search for a replacement is well advanced and we expect to make a further announcement in the near future." I presume there is a shortlist from the official process as well as MA. Does Schroders & Toscafund's alignment with MA mean that they have doubts about Findel's ability to select an effective chairman by themselves, or do they just see the synergies between SPD and Express Gifts too important to risk and see MA as a price worth paying to get them locked in? Also interesting that SPD shareprice is down on the day.

I would have to conclude that if Schroders and Toscafund are on board with this then it's the best that we can hope for. While it would have been nice to get a bid premium from Sports Direct for control, I guess that may still happen down the line if it works out. Intriguing to see what they come up with in terms of protection for minority shareholders if it goes ahead. And I wonder if there are any nerves about FCA approval of MA.

Fairly extraordinary to me that Findel finished up on the day. I would have thought the decline in sterling would have hit the share price significantly, like it did that of other retailers who source abroad. It seemed to get hit by this worry first thing but then was taken back up on pretty limited volume. So it managed to extend it's post-results winning streak. Something going on in the background, perhaps?

They disclose major shareholders on page 29, but at first glance it looks as though they are just as confused as the rest of us. They give the position as of 25th March and then list the notifications they received between 25th March and 10th June.

Richard Nunn, I think. Chief Revenue Officer. I had a short chat with Richard right at the end. He seemed impressive at first meeting. Good background (city banks + advertising agencies I think, so brings an element of "poacher turned gamekeeper" to both the revenue drive with agencies and to investor relations). His mandate is scaling the revenue and this will involve international growth amongst other things, hence the decision to locate him in the UK rather than in the US. He mentioned Europe, Singapore, China in passing. He also seems to have ideas about lines of approach into the agencies, talking about the various silos. He specifically confirmed that Brian's comment on still having to scale "native... video" was referring to both native (which apparently comes in about 6 flavours, including video) and video (pre-roll), rather than being just "native video" - which I took as a great positive in terms of revenue growth potential.

Happy with the AGM (and the bag). Good vibe from management and the directors I thought (leaving aside some personal dissatisfaction with the way they managed my question inviting them to share any "lessons learned" from past acquisitions, given the recent write-offs). The informal session finished about 1pm so more than ample time to ask questions of and hear views from those there. Shame Dwight wasn't in the room, but other than that a good turnout from blinkx I thought. Have bought a few more as a result.

Sugden painting a picture the market seems not to be recognising this morning. Still we can look forward to the announcement of the new Chairman, disclosure in the annual report of who actually owns the shares these days, and then further details on current trading in the AGM. "In line with previous announcements it is my intention to step down as Chairman and leave the Board at the conclusion of the forthcoming Annual General Meeting. The search for a replacement is well advanced and we expect to make a further announcement in the near future. My six years on the Findel Board have seen the Company move from the brink of insolvency to a well-focused company with sound financing and excellent prospects. ...Whilst there is still more to do we are already seeing the benefits of these actions which gives us confidence that we will return to profitable growth in the current and future years."

Don't know what to make of today. Maybe just pre-results nerves? Let's see what tomorrow brings.