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With JGB taking the hatchet to the operating model and cutting 50mil to overheads it means that they don't need to sell the book that was at very low NIM. The piece they were going to sell was because they were expecting airb accred and therefore gain better NIM out of those almost @par mortgages. Slashing the OM means they can now squeeze more NIM accretion out of that book than would previously been at par.. Dan previously stated that he would only sell if the offer was good (at2.5% below book) as he could just turn it to short term gilts for more, looks like Barclays wasn't up for the increased risk of delinquency unless higher discount.
Watch as next year airb is granted.. unbelievable how they can get away with this without legal repurcussions.
No new information in the article.. what is new, is the reframing of exactly the same information in a positive light by sky news.. what a coincidence.
He's not going to dump shares piecemeal, he will sell all complete as controlling interest. Given how utterly corrupt this whole undertaking has been, won't be surprised to see him offload 2% of new shares to curent shorts to close up and retain 51% once all is said and done.
Artificially suppressed share prices between future owner and main bond holder.. the main bond holder is currently shorting the stock! so clearly shenanigans are afoot. Once the 'takeunder' completes watch those shorts evaporate and a massive bounce. Even with the dilution this is a small float SP company as JGB won't be selling parts of his holding off piecemeal .. FWIW he had to 5x his original investment..won't be surprised to see him sell the whole company for multiples of that.
He intimates Barclays has already offered it.
Just listen to Dan himself explain it on the webcast below.
https://www.metrobankonline.co.uk/investor-relations/capital-raise-q4-2023/
Incorrect. mortgage sale will increase profits, Metro took on a book assuming AIRB accreditation will enable increase to NIM. However with no accreditation Metro makes smaller amount of Margin. The sale returns cash that metro can convert into treasury/Gov yields will produce more than the NIM they currently make - he swags 3.5% interest post sale. Dan is quite clear in the most recent investor relations briefing.
He can keep the book on and make a reduced profit or can sell it and get better yield. The book is solid but is more useful to an accredited lender who can extract greater yield from their risk weightings.
The fact that he states he is willing to accept a 2.5% below par means the current book is only worth less than 1% NIM to a non accredited lender.
Thats why the strategy is looking towards non residential mortgages, where AIRB accreditation requirements put metro at a handicap compared to business/commercial lending.
Spaldy/JGB aren't going to be selling their shares piecemeal, the whole lot will be sold when metro is sold on.
Shawbrook were already making offers north of 155p (previous high required at minimum for takeover). The issue was spaldy average was over 220p so no way they would sell at a loss. If value is ~£750mil on a sale complete you are looking at 150p+ a share post dilution.
Hence engineered short/crash to take control and get average down. Benefit now is metro is his so he will sell at profit multiples of current sp. Lth need to average down and ride the wave back up else accept a loss
Most recent Bloomberg article essentially tells you JCB planned takeunder of metro a month prior, conveniently same time as shorting started. Now JCB has majority control shorts will close. Caius literally working together to enable shareprice collapse, sky news given article leaking just as double bottom of shareprice reached causing liquidity dump of pi's to enable low placing for JCB to get majority stake and caius got their pay off for the haircut they suffer as majority bond holder.
The good news is now they are all 'on board' the shorts will be closed and shareprice returns to where it was (albeit with JCB now X-ing his investment in almost 24hrs!), best thing pi's can do is not sell and extract some return punishment, with this being a longer term hold with JCB til he sells it for min 155p (5x his investment).
Atleast JCB is now in it to win it, or sell it as the case may be..
If someone has the time to run the numbers I'd be interested to see what his current average is now. Is it below 1.55? As that's the highest price seen in 12months.
The whole event has a smelly smell to it. Run down of shareprice to get panic for JCB to finally average down at an absolute steal. Meanwhile he also takes majority shareholder status so can sell it whenever he wants, previously his average was so high it stopped any takeover bid.
Https://twitter.com/carolinebinham/status/1711124660077924762?t=zXT9DA8f4u6eNXQD4kiljQ&s=19
Multiple approaches explains lack of director dealing
Perfectly executed event driven play, clearly algorithmically sold short down to double bottom, only then leak exaggerated speculation and buy into PI panic liquidity. Expect to see shorts reduce position from today.
A misread on my part, indeed- refreshing to have potential positive courses of action to discuss here
JJ, While dividends might provide comfort to yourself and other potential retail investors, signalling the intent for buybacks (if EY proves profitable) should force the shorts to close quickly which would be a great catalyst to recover share price enough to get MTRO back out of small cap and back into the FTSE indices which would enable/encourage institutional investments back into the company thus further increasing future growth. Buybacks on a profitable company signals much greater risk to shorts, with them gone and company sustainably profitable is when I would want to start seeing regular divs etc. This is currently a share price recovery play, it strikes me odd that you would look for/expect divs from a company that never offered any?
If EY results show metrobank to be profitable, and it continues to be undervalued as is.. The board/shareholders would only have to agree to potentially undertake share buybacks (let alone carry them out) which would force Odey to close or be punished further.
That's not to say there isn't a confluence in their current outlooks/positions ref Metro bank