Member Info for Beamer21

Trying to buy to add but not playing ball so maybe we are on the move at last

Watch out for the large trades that have been appearing

Wellesley know the business well and already hold 10% - they will have canvassed other shareholders for support in my opinion

Simon Thompson Investors Chronicle 1/4/20

Honeycomb attempts to abort loan book purchase

Shareholders in specialist residential development finance company and asset manager Urban Exposure (UEX:33p) have voted in favour of the £113.8m (71.7p a share) disposal of the company’s loan book to Honeycomb Holdings, a subsidiary of Pollen Street Capital, a specialist finance lender. They have also approved the sale of its asset management company to the founders for £1.6m (1p a share).

The loan book sale was meant to complete today and the proceeds then distributed to shareholders by way of a first capital distribution of 72p a share on 7 May 2020, and a final distribution of 1p a share by April 2021. However, in light of current market conditions, Honeycomb no longer wants to proceed with the purchase on the terms it agreed in the share purchase agreement dated Tuesday, 10 March 2020 and has issued a notice of termination to Urban Exposure. Clearly, Urban Exposure’s shareholders want Honeycomb to fulfil its obligations, as do the directors who “consider that the termination is without merit and reserve their position to take all measures to enforce the company's rights under the purchase agreement”.

Honeycomb does have the right to terminate the acquisition between exchange and completion if there is a material adverse change in the financial condition of Urban Exposure’s loan book (defined as a reduction in NAV in excess of £10m), or if there is a material breach of the purchase agreement. There is a consideration adjustment mechanism incorporated into the purchase agreement under which Urban Exposure could have to reimburse Honeycomb (including by way of deduction from the consideration payable) up to £10m (6.3p a share) in the event of a deterioration in the loan portfolio due to a default on any of Urban Exposure’s loans.

Bearing this in mind, it’s unlikely that Urban Exposure’s loan portfolio has deteriorated ‘markedly’ since the parties announced the purchase agreement only a few weeks ago, suggesting that the company is in a far stronger position than the market gives it credit to enforce Honeycomb to complete the purchase.

So, having previously advised voting in favour of the disposals, and after taking into account that Urban Exposure’s loan book is worth more than double its market capitalisation of £52m, I would strongly advise holding on and awaiting further developments. Hold.

rebalance their portfolios against set risk criteria, just basic housekeeping

I think a lot of people are focussing specifically on success with C19 however, it’s probably worth remembering that many of those that survive C19 will be left with ongoing respiratory health issues hence I feel that companies specialising in respiratory health will see ongoing demand for a very long time

Elucigene CEO left Jan 2020 so I imagine he’s one that is likely to be selling down

buy appeared from 10.23

trade at 42p was a non protected portfolio buy trade dealt at a discount

Agreed. Someone just paid well over so games do appear to be in play

Pac -I believe the some of the locked in shares were for forward sold and are continuing to be sold in the market hence the price action

Personally I think it’s an opportunity as I believe YGEN has legs on its own merit and the NCYT agreement is the icing on the cake

The only sticking point is that I think Urbans management team want to retain their management company for themselves as they were previously getting it under the Honeycomb deal

the big boys and us minnows just play amongst them - I suspect someone wants in and we just have to wait for them to load up

An offer has been tabled, it’s not a takeover. It’s a very generous offer that is greater than that offered by Honeycomb which was approved by all shareholders so it seems we just need to be patient

https://www.investorschronicle.co.uk/comment/2020/04/01/four-companies-offering-value-opportunities/

Tangible net asset value

83.9p

Honeycomb Holdings only pulled out at the last minute due to expecting further volatility with Coronavirus - shareholders approved the sale of the loan book for £113.8m 71.7p per share and the asset management company to the founders for £1.6m 1p per share

Shareholders were due to receive a distribution of 72p on 7th May 2020 and the 1p in April 2021

Now we have an offer from an existing shareholder for 76.9p for everything so as it’s more than previously tabled I can’t see why it won’t be accepted and imagine that Wellesley have already lobbied other shareholders

I note that Pollen Street said on 30th March that they would not be reinvesting, lending cash from their portfolio for the foreseeable future due to the global crisis

The message was incorrectly there earlier - but investors called for it to be removed this morning as HL had not kept up with the latest developments that there is No delist

Wellesley are now subject to a 28 day PUSU Put Up Or Shut Up now that Urban have identified them?

Look at the holding notices, interesting heavy weight holders here with high averages

Metage Capital took 3.4% on 10/3 must be averaging circa 60p