Double I've done deals like this countless times. I've been up all night waiting for lawyers to release signatures. It works over email with scanned signature pages nowadays. Nothing needs to be couriered. I agree that we don't know what's going to happen afterwards, but it's likely the £200m comes in quickly if there's no bid from MA.
Thanks DC!
DontFret, I'm just stating facts and what I think is likely to happen based on my experience in these situations (I work on similar transactions to this all the time). I have a small short position at above the offer price and had a previous short position months ago which has already been closed. Don't care what happens with this one, just trying to tell people what I think
Double, the docs will have already been prepared and signature pages escrowed. That's how it works. Then it's just an email to your legal counsel who confirm signatures are released and then the docs are all live. It's a very quick process if you've prepared everything
All we have is what was in the RNS on Friday and it implied a wipe-out for equity. I'm literally just repeating what it said, don't shoot the messenger.
The restructuring part may require shareholder consent, if it's done consensually. If not, then no it wouldn't. The board clearly have a forward-looking funding need that the £200m covers. The restructuring will come afterwards or will be conditional on the money. True that we don't have details, all we know is that some of the solutions (probably the one they'll choose) will have no value for existing equity
The consent is to specifically allow security and structural seniority to the £200m coming in. Once the £200m comes in they will focus on the restructuring part, which they already signalled on Friday is forthcoming
You're right in that we don't know. But once the consents go through, the £200m can be signed and if there's a concurrent restructuring deal, it's curtains for shareholders most likely. Enjoy the ride, folks!
No I know but it's all standard procedure. He said he was considering a potential cash offer so they are not commenting. Nothing to read into at all. They're hardly going to turn around and say "sod that guy, we're done with him!"
"Not being allowed to comment" is the key point here. They are never going to tell you what is or is not going to happen until it's happened. They don't know whether there is going to be a bid, they don't technically know whether the creditors are going to turn round and abandon their deal and go down a different path (I've actually seen this happen before and it's the most frustrating thing in the world). They can't comment on what value is there for shareholders as there are still many possible outcomes.
If he pays 5p, I'm convinced that he has "lost", by overpaying for a terrible asset.
Then why issue the pre-emptive statement this morning? They didn't dismiss it because there was nothing to dismiss. All that happened is he added a price. Nothing else changed. They already issued a statement when he said he was considering a bid. Why the need to comment after he mentioned a price?
That's my understanding as well. My point is that his voting interest didn't change in April. The last time it changed was on March 1, 2018. So he is not bound by any price.
and by the way, the potential price of 5p should be a dead giveaway that they're not bound by 22p. Make sense? 5p is less than 22p
Nope, simply converted a CFD position to a real position. Their ownership stayed the same.
Has the sell-off started already?
pseudo, true didn't see that. It's relevant to the other IIs though. This could be a merger arbitrage team at JPM? Who knows
So there's the 150m loan, which would've been prohibited under the £40m facility, so requires consent of the lenders. Obviously, they said no. It also didn't solve the impending debt problem.
Then, there's the £100m bid for MdN, which most people think is valued higher than that. So an under-valued bid that also doesn't solve the impending debt problem.
What would you have done if you were the board? Unless MA agrees to take out all the debt at par, the creditors are driving the process here.
Nope. They don't have a bid. They can't rely on it. So they go with Plan A. I said this yesterday, but imagine if they abandoned their restructuring plans, then MA said he wouldn't bid? At that point, there may be more damage to the business itself.
Good question. I wrote a post on the Interserve thread about why institutional investors don't always sell when a company becomes distressed. Can be a combination of people not looking at every name closely (and spreading portfolios over many many names), being unable to offload at a price they want, IIs speculating on what's going to happen etc. Probably the former is most likely. There isn't some guy at JPM checking the news and prices of 200 names every minute and saying "sell this one!"
He's sitting there reading analysis on the macro market and deciding how to "reallocate" the portfolio based on beta ratios, multiples, exposure to different markets etc.
No, he can definitely do it through pre-pack. That's what I'm saying. MA can come along and bid more than the lenders (who will be effectively credit-bidding their debt)