The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
He could have, but they'd be overpaying seeing as it trades at 41¢.
Leaving that aside, I've seen majority shareholders get wiped out in the face of hostile creditors (or at most, keep a 10% MIP), so why shouldn't that happen here? If lenders are exercising their legal rights, he will have to either pay them off (as you say) or face the consequences. If it's the former, why not just make a formal bid now if he has the financing in place?
MisterPositive do you honestly believe that he launches a hostile takeover when the board have given him a chance to bid? What would be the point? If he ignores the board and lenders, he could buy the shares from shareholders, then immediately lose the business to the lenders...
Lawyers on restructuring deals closing in the next week are not putting kettles on for the first time at 9am...it's probably amongst the worst times of their life as they work round the clock and over the weekend finalizing docs
I’m crying inside guys, you’ve really got to me
Actually had a great weekend, thanks. Spent all day out on Saturday, went for a run, roast at the pub and game of squash on Sunday. Thanks for your concern about my social life, hope you feel better!!
I see someone woke up without a sense of humour. Yup, you mean the standard 2.9 requirement whenever there is any possible offer? That’s not in any way relevant...
Mobile phone technology is fantastic these days, isn’t it?
22p bid confirmed!!!!!
Jk, April Fools
About as much use as signing a petition to stop Brexit :D
Asking shareholders to send letters to DEB demanding MA become CEO.
Given that if he bought the business, he would be CEO, does this imply anything?
Good luck to all this week, it'll be a turbulent one!
In 8 days time, we'll hopefully have a definitive answer and the speculation can stop. One thing's for sure, either the bulls or the bears will be screaming "I TOLD YOU SO" at the other side, claiming their crazy predictions were nothing short of clairvoyance! The truth is, no-one can say with any confidence how this will play out. Speak to you all in the am
Officemanager you'd better report every other user on this site, then. I'm under no obligation to give you any personal information, and I think my posts have been relatively impartial, mainly fact-based and hopefully helpful to others. Can you please explain what your point is? I haven't provided advice in a professional capacity at any point here. Do you even understand how the FCA approved persons regime works?
I'll check back in this evening, but i'm off for a roast and a game of squash. Afternoon, all.
Well you know that if MA doesn't bid, you won't be wiped out until next Monday, right? So I'd expect it to fluctuate quite a bit over the course of this week, and as time goes on it will trade down
Think Odey was just short covering
I think you mean dilutive to existing shareholders. SPD will end up owning most of the equity at the end of a rights issue. If it's a subordinated instrument, it will either be (i) quasi-equity PIK debt (like zero coupon perpetual bond or something) pushing existing shareholders further out of the money (and possibly have warrants issued to SPD as well) or (ii) convertible note (low cash coupon most likely, could be 0 though). Either way is bad news for other shareholders. I don't think it will be this option though, because it won't mean MA owns it day 1, which is what he wants.
What people are not getting here is that any formal valuation methodology you use here with reasonable assumptions leads you to the conclusion that there is no intrinsic equity value today. That's directly as a result of performance declining. Now MA may think there are synergies with HoF to make it worth his while, but existing shareholders are in the worst position.
Scully he likely won't have financing in place. If you bought this business, you probably couldn't put more than £200-250m of secured debt on it and have a par-trading instrument. Maybe he can raise that but it would be on SPD's balance sheet. He would be buying it with SPD facilities anyway was my understanding?
It won't be cheaper with no debt - it would all depend on the next few quarters' performance. It would be less hassle to buy it later as a private sale from the lender group. He also would have normalised working capital terms again. I don't know whether this will happen, it's just a thought.
Good, thank you sir. Yourself?
The rights issue? Wrote about it a little on Friday I think. Will be highly dilutive to existing shareholders, and would be backstopped by SPD. What'll end up happening is that SPD will subscribe for most of the shares. It actually may be favourable for SPD as they can pay less than 5p. You will be able to subscribe alongside MA, but potentially MA's terms will be better as backstop provider. However, it's also going to be a large cheque (I'd think £300-500m) for SPD to commit to. Not sure MA will go for it.
The letter writing phase is always the most painful in any deal. God help all the lawyers representing both sides lol
Not been following this thread over the weekend as I had a busy day of drinking yesterday.
Has anyone considered the very real possibility that lenders take the business and sell it to MA at a later date?
I honestly can't say with any realistic confidence what the outcome is going to be here. If MA is economically rational, then taking over the business at 5p+ is not going to happen. However, he's quite unhinged so who knows.
He's got 7 days. I don't think it will come at higher than 5p, and as lenders are not on board with him, he would have to take out all the debt at par. It's a huge cheque and don't forget SPD are a public company.
Going to be an interesting week...