Member Info for BlindPanic

Reading some of the messages below it appears that some just don't get the realities of this type of situation. When this company reported some appalling results (at the 11th hour and 59th minute) in November last year revealing that banks had put £16m of new debt facilities in (to get a clean audit sign off) it was time to get out. From that point onwards the banks were running the show. They brought Shearer and Rumbles in not, as some suggest, so they could be backed into a corner by them. Goldman Sachs embarked on the fruitless task of seeking new equity from new investors (which would have also wiped out existing shareholders) and the banks prepared their plans for this to be taken into bank ownership. Ever since that profit warning the writing was on the wall. Choosing to ignore this reality whilst hoping tht one of the previous bidders would re-appear with an offer was niaive. The final act of craziness took place last week. Faced with a certain outcome like lemmings a minority of shareholders prevented their brothers and sisters from recovering some meagre crumbs out of this debacle. Deluded thinking that a NO vote would prevent management from receiving their 5% (they. Ever could truly own 20%) share incentive showed the extent of the niaivety. Even worse was the belief that the banks would come back with another offer. I recommend that you learn some lessons from this and either get out sooner it where you can't don't sacrifice YOUR cash in the wild goose chase of "the right thing". This doesn't exist in finance. The banks have lost much more than the shareholders here and they are not allowed to how compassion. Other companies such as Hibu are going exactly this way except the offer to shareholders won't be 1p!!!!

You say that "they will pay more than £1m to protect their debt" but will they really? How much will it take? Your price for a YES might be different to someone elses and how would anyone ever know what to offer? Fact is they have made their decision and I, for one, don't think they will flinch from putting this through a pre-pack and into bank ownership. They do this all the time with private equity deals and they will have evaluated fully the potential things that can go wrong. They don't get this far without doing their homework first. As I've said below the time taken to get another offer put to shareholders would simply be too long and it can't happen. A NO vote will give shareholders zero but won't prevent management from getting their package. That's the way these things work. Look at all the bank led debt/equity takeovers that have happened all across Europe over the last 3-4 years. RBS, Lloyds and Barclays have become some of the biggest private equity busniesses in the world through those.

It does because the circular was explicit on what would follow a NO vote. Don't delude yourself that the banks can afford to let themselves be seen to be dictated to by shareholders owning deeply out of the money equity and even if they would how long do you think that would take? Time to put together another offer to shareholders, then agree a circular with UKLA, then notice period for another EGM. Another 2-3 months without any guarantee that a second offer would be accepted. Meanwhile the company has breached its banking covenants and customers are assuming that this is on a death spiral. Absolutely no chance of that being allowed to happen. This will be in admin and sold to banks straight away, only difference is bankers/accountants/lawyers will pocket the £1m offered to shareholders.

So you agree that the problem couldn't have been averted as £20m wouldn't have touched the sides here. I suspect that the increase in borrowing limits was simply a reflection of the need for the increased £16m facility that the banks provided in November (to get a clean audit sign off I expect). The circular suggests that they are going to breach bank covenants in August and the chairman had stated the need to achieve a fundamental capital restructuring by the year end in the IMS so no real surprise on timing. Don't really think any of this matters now as the choice should be simple. YES = 1p and the proposed deal, NO = 0p and the proposed deal. I know which I'd choose.

Even if net debt was £104m that is still more than the business is worth. Would you support a £80m+ rights issue to pay down debt? Thought not. Therefore this outcome is inevitable. Shareholders back incompetent management and then complain at the outcome. The picture painted of the business seems to have been pretty accurate from what I can see. A business struggling with too much debt in a declining market. What did you expect them to say - "sure we can trade our way of out this mess even though customers and suppliers are telling us if we don't reduce debt we won't trade with you". Grow up this isn't some fantasy land. This company has been allowed to take on debts it couldn't support and now has to face the music. Doesn't matter what the current lot did there was no other alternative for shareholders unless they we're prepared to out their money where their mouth is. And they haven't so they've really lost the right to complain. As for Yell? Christ that management team is not playing withe the shareholders money. The banks are giving them some leeway to see if they can recover more value for them but none of those banks expects to get back all that they have lent and therefore shareholders probably won't get a deal as good as Mouchel. The bank debt on Yell trades below 30p in the pound. When that heppens it's time to get out.

No not Tom Jones but the fact that this kind of situation is fairly common in the Private Equity backed leveraged finance world. When the business is worth less than its debts and the shareholders won't right that imbalance then banks take control. Ask the previous owners of Fitness First, Gala Coral, etc. M has been worth less than its debts for some time now. Anyone who doesn't agree has the opportunity now to buy the business for less than the debt as the banks would bite your hand off for £100m. In fact it was almost certainly In that position when Shearer and Rumbles came in. The people really to blame for this are the old BoD some of who are still there. S & R are just cleaning up the mess. I would be aiming my anger at Cuthbert, Lerenius, Sugden, Lyons, Hewitt, Rae, etc for it is they who charted this course along with "professionals" such as Brough. They should all hang their heads in shame and be sacked from every job they hold. Whilst the NO vote crusade is admirable it is ultimately doomed. Once banks set off on this course they never back down. They regularly face down big PE firms and will not be prepared to lose face to a bunch if public shareholders. How would they ever be taken seriously in this kind of situation again? Believe me they will do this whatever the vote and shareholders will lose their last chance of recouping anything. For gods same take the money and use it to go after the old board. It his won't be the last one of these and Yell is heading in exactly the same direction (advisers to M = Goldman Sachs, advisers to Y = ....... you guessed it). Get out now if you can.

I agree that a messy admin at the operating company level where contracts (and software licences) sit would be very messy and cost them far more than £1m. However, when I've seen this done before it has been done at a holding company level and this allows it to be done without impacting unduly on those contracts. My reading of the circular suggests that this is what they have in mind. Just think about how you portray the difference between shareholders and creditors. They're not the same. Shareholders should lose all of their money before creditors lose any. Anyway - I think you're crazy and will achieve nothing if you're successful in convincing enough people to vote NO other than rewarding the fat cats in the city even more but I guess that's your choice. Good luck with that.

The business was holed beneath the water line by the old management. It should have been obvious from October last year where this was heading. It's unfortunate that shareholders will lose money. It's also unfortunate that the banks will lose money as we all own a share of two of them but no amount of wishful thinking is going to change that now. Does anyone on here REALLY believe that voting NO will change the outcome? I know how banks work having seen this time and time again and if you read the circular you'll see that they are very well prepared. They've had months to get themselves ready for a NO vote and they will have this in admin before you can say "Andy Brough up a ski slope telling bidders to p!ss off". By the time you wake up this will be owned by the banks and the bankers/accountants/lawyers will have YOUR £1m. By the way the banks sponsored this management team not the shareholders because they have had no power here for close on a year. That's why I sold out because when that happens it's goodnight Vienna. Emotion and investing don't make good bedfellows. Voting NO out of anger even though you know it will cost you money and not change the outcome is senseless. Cash in and give it to charity then lobby for greater shareholder protections instead if you don't need the money.

This is really simple. The business today is worth about £40m. It is unlikely to ever be worth the level of the bank debt plus pension deficit. The shareholders backed a dud management and rejected crazily high offers and now face the realisation that was a mistake. Not sure how anyone could equate that to theft but then the lack of understanding on here of how these situations work astounds me. I sold out of this long ago when the writing was on the wall. My only interest now is in the process that develops and my only regret is not shorting this thing to hell. I do kind of hope that the kamikaze lunatics on here don't deprive their fellow shareholders of some small crumbs of comfort because as Seifert suggests I fully expect the same deal to get done one way or another and would rather see shareholders get the £1m than the bankers/accountants/lawyers who will pick it up for putting this through a pre-pack admin. There isn't an alternative now and anyone who thinks the banks will tolerate another round of debate is crazy. By the time the markets open after the bank holiday this will have been done. The BoD stopped prioritising the interests of shareholders when they realised they had no realistic economic interest and (as the law requires) they prioritised the interests of creditors. I actually think there is a high degree of probability that management's shares won't be worth much or anything as they have to repay the retained debt and then they get 5% of the first £87m of 'equity' value after that. Not likely to be a big number! Isn't the first and it won't be the last..........

On what basis do you think this company is worth more than the £147m of debt it has plus the pension deficit of £49.5m and rising? I'm sure that the banks, Goldman Sachs et al would be keen to hear your thesis and more imprtantly they'll look forward to your offer. Tell you what I'll negotiate you a purchase for £146m and you can pay me 10% of the savings!!!! Dooomed, we're all dooomed!!!

Firstly, it is true the banks don't see this as worthless. If you read my earlier post you'd have worked that out. They just don't see it as worth even a third of the debt they have lent hence they feel entitled to all the upside from here. This NO crusade will only end in tears. A NO vote will lead to immediate admin. Read the chairman's letter. There will simply be no time to start putting another circular out and another vote as that would kill the business through uncertainty. Better that they show customers a decisive action to guarantee the future ownership and that can only happen through admin. This risk will have been fully evaluated and in any event there islikely to be plenty of scope for customers to renegotiate contracts if they really wanted to. The banks can't afford to be bossed by out of the money shareholders do if you want the same outcome as Connaught then go ahead and vote NO. By the way - Yell is going exactly the same way ........ or worse.

How do you think voting against this would prevent management from receiving 20%? Equity is worthless. Why would banks let you keep the shares?

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Shareholders have no control over the destiny of this company or it's management they can now only control their own destiny and tht is 1p or nothing. Choosing nothing will not impact the company or whether management receives 20% or any other amount. The banks and management will have a contingency plan for a rejection of this proposal nd it will involve doing exactly the same deal using a pre-pack admin which shareholders have no say in. All that happens there is that the lawyers an accountants get your £1m. Shareholders should vote with their beds not their hearts in my opinion - exactly why the institutions have done when they bailed out of this mess.

Accept the deal and they'll pay you 1p per share costing them just over £1m. Reject the deal and they'll take control through a pre-pack admin, you'll get nothing and they will pay about £1m in fees to lawyers and accountants for the admin. either way they own the company. There will be no need for market testing as the banks can bid the whole of their £147m of debt and no one else is going to pay anywhere near this. You can make the "stand" against the deal but it will be a fruitless effort and you might as well sell up and treatm yourself to a bottle of whatever is on offer at Tesco. Would be interesting to look back and see how many people on here were up in arms when old board rejected the offers.

I was asking a genuine question in relation to the article that was on the link below my message. You want to get over yourself pal

If you short at the current price say 3.5p and it ends up in admin what price do you close out your position or does the trade have to unwind because you can't deliver the shares?