Member Info for 1GW_

At the end of week 2 this remains intriguing.
12 shareholders have declared.
2 appear to have sold out (Bank of Montreal from 3.7%, Wise Funds from 1.0%)
1 appears to be on the way out (Schroders from 2.8% to 1.0% as of 11th July)
Only 1 has been buying significantly (M&A arb player Cicogne) & not since 5th July

The net result is that the sum of declared positions has fallen from 31% on 5th July to 27% as of today (with Wise funds declaring selling out today, other 8.3's for today probably on Monday).

So even more of an imbalance towards declared sells now, with Bank of Montreal selling 1.4m on 8th July, Schroders selling 848k on 11th, Wise Funds 770k on 12th. Graham Harris has also been selling steadily but on a smaller scale.

So I think there must be some serious buying going on for the shareprice to remain above 350p. I can't believe this can possibly be balanced by retail investors hoping to get lucky with a counter-bid, and in fact anecdotally we know from this board that there is a weighting towards declared sells rather than buys.

It could still, just about, be rationalised as other M&A arb players below the 1% declaration threshold, as I think they do have a tendency to hunt in packs (or perhaps use similar models). But a UK AIM housebuilder is not the obvious place to look for a lot of M&A arb activity, so I still think it is credible that someone else is building a position. The 10 business days to reveal opening positions will run out soon, so we should know more sometime next week.

I have to say I thought seriously today about taking the small profit on the swap into Crest and building my position back up here in the hope of a counterbid. But my personal experience remains that counterbids tend not to emerge in these "scheme of arrangement" deals so in the end I sat on my hands for today.

As usual, this is offered in good faith, but it is possible I have missed some declarations or made an error of analysis.

terrace - on the contrary, I think it's quite encouraging that the shareprice is holding around the 350p level.

Normally you might expect a discount to the offer price at this stage, if no counter-bid was deemed credible, because of the risk to completion. In this particular case, given the lack of public support from institutions (not even letters of intent to support the deal), what seems to be a relatively high proportion of retail (as opposed to institutional) investors plus evidence of dissatisfaction among retail investors in the form of postings on bulletin boards, you might build in a small but still significant risk that shareholders don't approve the scheme of arrangement. In that scenario, what would happen to the shareprice? CBRE, as I read their offer, would not be allowed to increase their offer (absent a counter-bid) since they have said it is "final", so presumably the share price would fall significantly below 350p.

So on a risked basis you've got a small chance of a near-term outcome well below 350p, a high probability of 350p and some probability of more than 350p because of counter-bid. You have to come up with your own percentages, but if the answer is around 350p I think that means "the market" is assigning a reasonable (if small) chance of counter-bid.

Maybe, but if it was a done deal, why couldn't they announce support (irrevocable undertaking or LOI) from Octopus. And how come someone could apparently unload 1.4m shares ar 355p the other day?

I would guess they're waiting to see what happens. Not bullish enough or angry enough to buy significantly but equally not selling any significant amount.
If someone is trying to put a counterbid together then they would probably want Octopus on board fairly early, and if they are made insiders in that scenario then they presumably won't be allowed to deal anyway (except perhaps for any discretionary client who withdraws their mandate).

Not at all. They have 7.5m shares. One tiny sale declared but of no significance whatsoever I would say.

Those were supposed to be the conclusions in my previous post terrace. Something's up! One shareholder has taken the money and run, most are broadly staying put so far, there's one arb player buying reasonable chunks and then there's a lot of declared sales volume which seems to be unmatched by declared buy volume yet the share price remains above 350p. Bank of Montreal getting 355p for 1.4m on the 8th (if I've read it right) is fascinating.

So my main conclusion is I think someone besides Cigogne is buying fairly aggressively. I somehow doubt its CBRE - I think even if they had decided to buy on the market they would declare promptly as they won't want to fall foul of the regulator at this stage. It could just be some smaller arbitrage players below the 1% threshold, but it could be something more interesting.

With the declaration of Octopus today things are a bit clearer, but still only around 29% of shares accounted for by the 8.3 declarations so far, according to my tally. Thames River still to declare, as are CBRE and Telford Homes.

The big declared seller so far is Bank of Montreal, which has managed to sell virtually its entire roughly 3m share position over 3 days. Intriguingly it managed to get 355p for the last and biggest chunk of 1.4m shares yesterday. Schroders sold 0.7m shares on 4th July.

The only big declared buyer to date, as far as I have seen, remains the M&A arb specialist, Cigogne, buying around 0.8m I think over 2 days.

So the big imbalance between sells and buys, while the price stays above 350p and indeed with Bank of Montreal getting such a good price for its last and biggest sale suggests to me that someone else is acquiring in big chunks. Shareholders have 10 days to declare their opening position so there are still a few days left.

I have been a holder in a number of situations where I have thought a counter-bidder might emerge, but ultimately no-one came forward. Once again though, I can see reasons to stay invested here for a bit longer, hoping that this proves the exception.

tricky - so in your opinion it would be disruptive to buy back more than 15% of the company's shares in a financial year?

How does that square with the buybacks buying more than 25% of the daily volume? Surely that has more potential to disrupt the market?

"Due to the limited liquidity in the issued Ordinary Shares, any Buyback of Ordinary Shares pursuant to the Authority on any trading day may represent a significant proportion of the daily trading volume in the Ordinary Shares on AIM and may exceed 25 per cent. of the average daily trading volume, being the limit laid down in Article 5(1) of Regulation (EU) No 596/2014 and, accordingly, the Company will not benefit from the exemption contained in this Article."

rusty - blinkx/rhythmone used to ask for authority every year, taptica/tremor hasn't done as far as I can see. The difference may be in the company's articles of association (ie no requirement to seek shareholder approval for buyback) and/or it may be in the applicable company law (Israeli vs UK).

The listing authority stuff is just a red herring imo because aim is not regarded as part of the official "list".

Tricky - why would they need to seek further approval for share buyback from shareholders? They haven't in the past have they? As far as I can see they must have the right to authorise share buybacks under the company's articles of association and/or under Israeli company law as I haven't seen an AGM resolution in the past.

And why would it be "disorderly" to buy back more than 15% of the issued share capital?

AIM shares are not on the "official list" are they and therefore they are not subject to the UkLA rules?

So to date, apart from trivial amounts, it seems to me we have 3 holders declaring selling (2 selling down significantly) and 1 M&A Arb specialist declaring buying. About 20% of shares accounted for by 8.3 declarations. Still no declaration from Octopus or Thames River.

sain - but having stated it is a "final" offer they can't increase can they? Unless the conditions are met - i.e. a counter bidder emerges.

Not sure how many more times I'll be able to post on this subject!

I've sold about 1/3 of my TEF holding, and pending better ideas on diversifying within the sector have reinvested the proceeds in CRST.

While there's the chance of a counter-bid, there is also the chance that the bid fails. As the chance of a counter-bid wanes perhaps with time, I would expect the price to settle a bit below the offer price, reflecting the small risk to completion. But there is also a scenario where shareholders are not prepared to accept the offer and CBRE, having declared it "final", isn't able to increase without the emergence of a potential counter-bidder. In that scenario, I think CBRE might have to walk.

I should perhaps correct "beneficial owners" in my earlier post. By that I mean institutional positions - but those positions could be held on behalf of discretionary clients who would be the ultimate beneficial owners I suppose.

75% of the shares voted, but for the court meeting they also need a majority in number (i.e. >50%) of the shareholders voting.

And in fact, there's the first really material move disclosed. Bank of Montreal selling a big chunk yesterday.
But clearly someone (or some ones) must be on the other side.

The 8.5's are not so significant cyberduck - they are just intermediaries.
The 8.3's are much more significant (at least IMO) as they disclose long positions, short positions and trades during the offer period of the beneficial owners.

Which 8.3's have disclosed any purchases, matth? The only one I've seen is from Renaissance who disclosed increasing a long position by a whole 2k shares through swaps.

How do you work that one out matth?

From the 8.3's there is very little declared activity from the existing holders so far as far as I can see. The only non-trivial one I have seen so far is Investec selling 78k shares on the 3rd (and that was 78k out of 4.6m, so not particularly significant). No declaration yet from Octopus, which presumably could be a key player in the outcome of the bid. The 8.5s (i.e. intermediaries) are showing more volume but we don't know who that is on behalf of.

There is obviously volume going through and the price is holding just above the 350p rather than just below, so that suggests some institutions probably are buying - but that could be M&A specialists who like the odds of a relatively secure 350p and the chance of a counter-bid.