Member Info for Arealfundmanager

Hi BBB,

In answer to your question re bidders returning, when an offer period terminates because non-binding indicative proposals are rejected and the bidders do not advance, it triggers the "Put Up or Shut Up" rules. Even though the bidders only made non-binding indicative offers and never launched a formal, binding offer under Rule 2.7, they are treated as having walked away, and so cannot return with another bid for 6 months. This is in order to stop a company being continually under siege as it were.

Just noticed another post from Alderbaran, whom I am beginning to suspect works for a Mr Bonnier or associates. He speaks nonsense tbh. It is true that because Audioboom does not produce content, any bidder is effectively buying a load of contracts that the company has with the content producers and presumably they can walk away when the contract term ends. But to say that there is no USP is ridiculous, it seems Showcase does have some USP, in the ease and effectiveness of monetising content for those content producers, relative to competitors. As for valuation, does he honestly believe that Podcast start ups are valued on a multiple of FCF????? He picks at stairs because he wants that price down, and it might yet fall further seeing as the entire Tech sector is coming under pressure worldwide, but not because it is trading at a significant multiple to FCF. I can show you a number of other metrics where the company is not priced in line with competitors.

1) Fwd. Revenue est. 2)Mkt. Cap / EV 3) Mkt. Cap / Fwd. Revenue 4)EV/ Fwd. Revenue 5)Fwd. adj. EBITDA per share 6) EV/Fwd.Adj. EBITDA

Audioboom

450p. $95.0m (FY26) $108.7m/ $103.7m. 1.14x 1.09x $0.39 14.8x

PodcastOne

$4.25. $71.5m (FY27) $115.4m /$112.4m 1.61x 1.57x $0.31 13.2x

Acast

SEK36.65. $302m (FY26) $706.2m /$642.6m. 2.34x 2.13x. $0.12 29.6x

The figures above are translated into USD where using non-USD estimates and mkt. cap etc. All estimates are broker estimates not mine.

So as you can see AIM with the shenanigans of its trading community tends to depress valuations relative to other markets. In fact I would say the smaller company market in the UK is probably the most undervalued market in the world, due in major part to its participants (or lack thereof in terms of sophisticated long term investor). That's my piece for the day.

It was always the risk that suitors underbid given the valuation that AIM places on the business.

On the positive side, this is not a bad company and in the short term the stockmarket always under or over inflates share prices vis a vis the intriinsic worth of any enterprise.

Since Audioboom had some very knowledgeable and experienced advisers stateside who know the podcast market and its outlook very well, the board would probably have received guidance from them also that bids were undervaluing the company's prospects.

Uallmakeitup was indeed right in that the share price was not showing enthusiastic signs of any imminent 'bagger'. Sometimes the market's scepticism is justified.

One thing I would add is that if they get any future approaches which they announce they are in talks about, the cynicism will abound if they drag it out again for 8+ months !

If management were engaging in a buyout they would need to borrow the cash as I don't think that they could stump up 10's if not 100's of millions to pay for it. It would involve leverage and that would necessitate an announcement to the LSE under rule 2.2 of the Takeover code - Continuous Updates ie when the nature of a bid changes, or the financial situation of the company changes (leverage or debt). They cannot make the announcement after they have discussed with the board and the board recommends the MBO.

Lack of any purchases or sales by big institutional investors since April (from regulatory filings) strongly suggests that some have been brought inside, especially as they were so active prior to then.

The bid / offer spread is now consistently wide with little trading in volume terms, also suggesting Market Makers are not taking risks in case of an announcement that creates a loss for them (with stock on their books or indeed being temporarily short).

Tracker funds always buy before inclusion into the index, and traders know it so they piggy back off of that and take a profit after, but as important the market is down and Asset Managers are operationally geared into falling and rising markets in terms of profits impact.

Morning BBB,

In terms of the premium over the 2nd October price and justifying to their own shareholders will of course depend upon the size of the company that is doing the acquiring. If it was a big media organisation ( say mkt. cap in the billions) and the consideration was small change to them, then I don't think they would be remotely phased about having to justify it to shareholders, I don't think shareholders would in fact notice that much. The premium should be dictated by the multiple of revenue or profits that similar businesses are trading at, and given Audioboom's rankings in podcasting, probably would even merit a premium to those other company's valuations. It's all about future media presence, and any bidders will either be thinking 'we have to be in it to win it' or they concentrate on other aspects to their business - content production in alternative areas etc. etc.

As far as the time it takes etc., as I've said before it's not exclusively about price, there are also other considerations of other stakeholders which take place. Often deals involve retention clauses, if personnel are deemed important, or there is a phased payment dependent upon retention of existing clients/revenues. These things take time to work out. My feeling is, since it does seem to be taking some time to work it through, suitors are either going back and forth with improved offers or the terms of the deal with regard to non-price factors are taking time.

That's my take anyway but in the end it is all conjecture.

Sorry had to leave early yesterday evening BBB.

The RNS of 16th April to me states that of all the options they were considering within the strategic review, they are taking forward the “Cash Offers” by giving access to the data room to those interested parties who have made “Indicative” bids within a price range that is near what the board would consider as displaying “serious” intent, ie not trying to buy on the cheap in their opinion.

Other options that were put forward by interested parties who received the presentation may have included some or all of the others such as

1) a Private Equity unit buying the whole business possibly using leverage - borrowing which they burden Audio’s balance sheet with (Financial chicanery in my opinion)

I believe this was probably rejected as PE units don’t pay full whack if they have no way of exiting at a considerably higher multiple via gearing or they identify material cost savings or new revenue streams - highly unlikely as Audio has been run well and management have avoided gearing the balance sheet themselves. PE don’t tend to inject new capital alongside existing shareholders just to help grow the business - that is the role of Venture Capital. Whatever the motives, PE are in the business of buying cheap companies and just because it’s quoted cheaply doesn’t mean the board endorses the market’s valuation - I know we don’t based on competitor valuations.

2) Merger with another Podcaster

Usually merger ‘proposals’ entail swapping of equity at or near to prices prevailing in the market but in Audio’s case that is again likely giving away a very cheap company for equity in a more expensive company ( it could be a very expensive company - who knows but it’s the relative valuation here which counts). I suspect that is maybe what was touted if indeed there were any merger proposals.

3) An acquisition by a large Media company for shares in that company.

Again same arguments may apply as in 2) ) if they were basing prices off prevailing market prices.

4) Raising new capital for expansion or acquisition themselves

Board would have to be sure that existing shareholders could afford to do so, but if not and they went to market to raise it, it would obviously be diluting existing shareholders interest but most importantly they would be raising capital equity through cheap equity ie giving company away so to speak because again the quoted equity is cheap on AIM.

So in my view the only other option to take forward were the cash bids. Once more I’ll emphasise that that doesn’t mean a deal will be done - as they state in the RNS.

Just one other point. Tobin will not be denying any deal because he bought shares at £18 and won’t sell for less. He has a fiduciary duty to act in the interest of all shareholders not just himself, otherwise he could be sued, and I believe he is an honourable enough man to act with integrity. Even if it were In the back of his mind, I suspect

As you I think pointed out BBB - All this doesn’t exclude the possibility that some big shareholders in Audio (read Candy Ventures) have an inflated idea of the companies value / future growth potential, and are unwilling to accept the offers that may appear. After all they have been involved since 2017 through a Convertible loan. In this scenario then there may be no deal, and given the track record of all the takeover speculation some years back, will naturally make some traders slightly sceptical and thus willing to sell shares whilst still above the 2nd October closing price.

I suspect they have been able to keep it all under wraps because all the bidders are stateside and possibly even some big companies where the consideration that Audioboom would merit is small change to them, necessitating very few people involved in the process, and in particular wouldn’t involve trying to buy shares on the market to build a stake.

What we do know is this from the RNS update on SR 16th April :

"As at the date of this announcement, the Company is in discussions with a small number of parties who are considering MAKING A CASH OFFER FOR THE COMPANY'S ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL under the Code. "

No mention of acquisitions, capital raising, reverse takeovers, mergers or anything else. If they were and did not mention it, then they would be in breach of the Takeover Code and be creating a false market in the shares.

See Rule 2.2 Continuous Updates: If there are any significant changes to the nature of an offer (such as shifting from a straightforward third-party cash bid to an active merger scenario) or if the company's financial position is otherwise altered, the company must announce this through a Regulatory Information Service (RIS or RNS)

It is still possible but since we are almost into June, (the date of announcing the result of the SR) time is running out for them to make that announcement. Therefore I am almost certain that they are in the midst of a BIDDING WAR.

I didn't fully read your last point McSquares, but I guess your leverage point is what I am driving at.

I bow to your knowledge on the tax treatment issue McSquares, but for me these are an exercise of share options that were granted to people who have left the business and within the terms of the grant were entitled to keep those options. It is not an issue of shares for option exercise for current employees or indeed Board Directors if they have those grants, hence the term 'Non PDMR (Persons Discharging Managerial Responsibilities) Ex-employees. It does suggest as you point out that a takeover may be imminent as why else would they do such a thing, unless there was a lapsing date imminent, which there may well be, but it would seem odd that only ex-employees have options whose expiry is imminent. To me some ex-employees have chosen to exercise (and obviously have the right to do so) because they don't want to be stuck with options in a company that becomes unquoted as an acquirer pays cash for the business and Audioboom becomes a subsidiary of that company. Current employees could be granted options in the New Co. for continuity of any Long Term Incentive Plan. However you may well be right that tax is a major consideration in these circumstances and is driving this. My points are another potential slant to it anyway.

Largely agree BigShow, but I would say that they would not have stated that those 2-3 were in the DR if it had all finished. Whatever, it's semantics. One thing I have learnt over the years is that extracting the best possible price through a 'final' bid, often does not result in the price of the transaction. If somebody wants it badly enough they will come back despite being asked for their final bid.

Again we are talking semantics, but a 'blind' auction so to speak makes people slightly reticent that they may pay over the odds vis a vis the competition.

I like your synopsis nevertheless.

Hi BBB,

As I understand it, the clause

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY FIRM OFFER MIGHT BE MADE.

is necessary to inform the market. Once in the DR if potential bidders find something they don't like and nobody bids then there could be claims that a false market in the shares was created. So this is a caveat to prevent that. The Takeover Code is littered with these necessities, but tbh access to a DR implies there is serious intent, both by Audioboom (otherwise why would they reveal their detailed financial state/projections to competitors) and indeed outside parties. Unless there are serious problems with Boom's accounts and other management information, it is more than likely that one or more bid. I suspect we will see a bidding war here due to attractiveness of the business and industry consolidation. One thing else I would say, that at this point, it is highly likely that discussions held with interested parties has or is also involving intentions of any acquirers regarding the interests of all STAKEHOLDERS, ie retention of staff, client considerations wrt platforms etc etc. [Is anyone old enough to remember Guinness' takeover of United Distillers ?] Price is of primary importance of course but these can also come into play.

One thing on timelines, usually but NOT necessarily there will be consultation with the largest shareholders at which point they will be brought inside. The board would not want to recommend a bid only to have it rejected by a majority of shareholders.

There we go again, a trader trying to push the price down. Do you honestly think people fall for that?

Indeed BBB, Dowgate would not be able to trade if they were party to an Audioboom acquisition or indeed them being acquired as they would have been made "inside".

Hello BBB,

When Dowgate declare a trade, they do so under the name of Dowgate Group, which is the parent of Dowgate Wealth and Dowgate Capital. So it could be either that is the underlying counterparty, Dowgate Wealth obviously for their own clients (including a trust they run on a contractual basis) or Dowgate Capital who can act on behalf of acquirers of the company, eg if they want to pick up cheap shares below the price they may have to make an offer at to be recommended by Audiobooms board. Both subsidiaries are obviously at arms length from each other due to conflicts, but in this instance I guess it is the Wealth side, primarily for the trust I mentioned (name escapes me at the moment but someone else whose posted on here knows it's name.) I say that because they recently raised capital and what Dowgate will do is buy shares to a target weight they have in their model portfolio for the trust, or indeed if they have gained other Wealth clients, it will be the same, but I doubt it's other clients, as the amounts involved would imply they have taken on some pretty hefty new individual clients recently. They will buy until that target weight is reached in the actual portfolio, and sell if it goes over. This is not trading when 'in the money' it is standard portfolio management practice. So it may seem weird if they buy one day and then sell at a loss the next, that its probably due to the rest of the portfolio dropping in value relative to Audioboom.

Dowgate are a long term investor and will not be punting on prospects of a takeover, but on (and I agree 1000% on this) the long term prognosis for the industry and Audiobooms market share within it. The fact that Boom has no debt, will be collecting cash in 2026 due to expiration of onerous contracts and they re gaining traction in the video sphere, and the latter combined with the UK audio podcast market where both have massive amounts of room to increase the ad revenue, since the medium is undercharging given reach, trust with target audience, and in sum, the effectiveness of the advertising to collecting prospective customers.

There are a host of other reasons too numerous to go in to here, and many have talked about them already, but Boom is an undervalued share as it sits at the moment in a growth market with a growing trajectory within that market. It is not even overvalued, quite the opposite. What's not too like, and yes the price will rise and fall as it trends upwards, nothing goes up straight, so profit taking will happen, but long term this is a beauty in my book. I know a few micro cap managers who think the same, but don't have the same asset size in their portfolio to become visible to us, via declaration on the RNS front.

That's my take, and good luck to all.

They don't spout rubbish all the time Uall. If the poster is an investor and not a trader you should recognise that. There is nothing wrong with trading, but personally I believe that trading doesn't pay in the long run. Most of the traders on AIM are probably ex-broker market makers, made a few bob in bonuses and then retire, and off to trade on their on account to sustain an income. They do create liquidity which is good for the rest of us, but the nonsense posts are invariably from the trading community who verge on the 'market manipulation' threshold, trying to get less informed through greed and fear to buy and sell on the back of optimistic or disparaging remarks about the company concerned. However in this case at the moment it is utter rubbish to be disparaging about the outlook for Audioboom. Yes there are sometimes some stupid comments like - 'it's going to £10 in the next 1/2 an hour' type stuff, and they are happy chappies, but they're probably trading too.

I often ask myself would you make those comments in person direct to the face of those that they are directed at?

It always amazes me why being incognito behind a keyboard enables some people to behave with total lack of civility. I'm not aiming this at you necessarily, and in a fit of pique I have found myself doing similar for which I apologise to all those in receipt.

Maybe I'll make it over to play the Aisla some time and meet you in person, after all I live on the east coast, but please for all those reading this post, lets grow up and stop misbehaving like children.

Uallmakeitup, in the long run spiffy traders are all dead. Show me one who comes out ahead?

Under LSE rules, if anyone was in takeover talks to acquire Audioboom, then an actual '"Offer" for the company would need to be made by 31st October - ie. 28 days from entering the 'Offer' period status on 3rd October. This can be extended by application from Audioboom's board to, and then approval from, the Takeover Panel, but this extension can only happen subject to this process from the two of them. If any specific "Offer" fails to materialise, and there is no extension, any acquirer in talks is then barred from returning with any specific "Offer" for 6 months as far as I understand it. Friday is the day then!!

Do you want to remain ignorant all your life or do you fancy educating yourself? Typical troll comment from someone who hides behind a keyboard.