Member Info for DC2007

No other press mentioned the 22p highest price paid by MA in the last 12 months and that'd be the minimum offer. They were almost egging the reader to take a punt for a 10x or bust!

Your two concurrent posts are contrary Pearls! One says shareholders should 'sit back and see what unfolds', yet a few minutes later you've asking what will happen next and advocating the BoD urgently update shareholders. Confusing.

Are you a shareholder in DEB? When did you buy in?

where's the 2pm thing coming from? Can't find that in any RNS.

Hi Mick,

SPD last acquired shares in DEB on 18/19th April last year. On that day, they traded around 22-23p. Assuming SPD's acquisition was at the market price, this would normally represent the minimum permitted offer within 12 months of that date. Do you have different info?

Atb

Looks like it could break the record from last Friday. Could be more than 10% of the stock turned over today.

Agree Johnson they'd lose their jobs if the recommended accepting an offer from MA. But given their dreadful performance, can they really be expecting to keep their jobs during a pre-pack/d4e?

If I was a creditor, I'd be clearing the BoD out as soon as possible. 'Redesigned' cost too much and delivered too little; arguably without it, things might have been plodding along okay even now.

I bough into DEB because it was a plodder and had steady earnings for several years. That's until this BoD/management decided 'transformation' was needed. They've managed to destroy the entirety of equity value in not much more than 18 months. So yeah, transformed.

Atb

HK, I think we're in similar minds - acceptance that the business is gone and reluctantly switching focus to minimising loss.

I'm preparing my strategy to unwind in advance. Having a ready framework as a guide will help with decision making during what is likely to be a turbulent week. Hesitancy in such a precarious situation could actually be costly. This is my reasoning.

- Right now, with everything known, I put the probability of MA making a bid before 5PM Thursday at 5%.

- The BoD have been atrocious while their duty was to shareholders; it will improve naught now their duty is to creditors. So I put the probability of the control being removed from shareholders from 5PM Thursday comfortably at 80%.

- That leaves a bare 20% chance that DEB is still listed and trading on Friday morning. Two events could lead to this: a miracle in that constructive refinancing is agreed (maybe 1% chance); or, they move the deadline (see it as 50% possibility).

- From that I conclude that there is likely to be four days of trading. There's bound to be some very volatile periods. These may give opportunity for those with positions to unwind to recoup some losses.

Your £11k position could briefly be worth £15k or £18k and give you an exit. That's worth salvaging. For me (I bought at 55p), it's near nominal, the difference of a few hundred) but I'll be looking to do this too. Never did I expect to need the mindset a day trader, but here we are.

This is how it stands now. As the cards are turned over one by one, re-evaluation will be necessary and it could rapidly change. Best of luck with your moves.

Ok Pearls, we differ a lot in our view of what can or will happen next. I can't recall if you've ever said what your interest was in DEB and how much it is up or down. Are you willing to say?

I've not spoken to my broker yet Pearls but lets look at your proposition:

You're suggesting a buyer (MA) in the open market is going to pickup 123 million shares in five minutes;

and,

that same buyer will intentionally and knowingly violate the Takeover Code in doing so;

then,

they'll go on to bid - at a premium of over 20x - for the remaining 60% of shares free of intervention from the PTM.

Your hypothesis that MA is coming to buy DEB at a big premium needs wilder and wilder ad-hoc reasoning to keep it going. How much do you have in here?

Welcome. You're getting a baptism of fire with investment one. To answer your questions:

1/ Indeterminate. There are many assumptions needed for that to be possible; it could at least be said to not be impossible.
2/ His interest would exceed 30% in aggregate obliging him to make an offer for the rest of the shares. The Takeover Code has rules to regulate takeover by that method; as no other companies own a large stake in DEB, it's moot.

What made you choose to buy into DEB? Good luck with your investments.

No Pearls, that's wrong. He can't pick up another 21% of shares on the quiet in a 'raid', at dawn or any other time. As soon as his holding hit 30% he'd have to make an offer for the rest of the shares in issue.

Inclined to agree johnson. Never thought MA's involvement in this was a good think, but for the common stock holder, it's probably the only way out now. Trouble is the BoD have to agree some offer from him before Friday. And the BoD are working on a pre-pack probably at the exclusion of all other options. Then any MA offer would have to be so scintillating that they could not reasonably refuse it without leaving themselves open to litigation.

I doubt anyone involved will be having a quiet weekend. The endgame will be a mad scramble this week.

Hi Johnson,

Because the equity purchase at that price would be immediately written down by about 93%. Buying an asset with a market value of under £20m for £190m is a bad move. He's got privileged information now as a part insider which could make that look better or worse.

If instead he can get his loan of £150m and 5% accepted, he'd want the loan back one day (and as a creditor would be further up the chain for repayment in insolvency) and he gets 5% equity for free. It's a better deal and much lower risk.

I don't think so either. MA is unpredictable and that to me leaves a tiny chance where there would otherwise be none. Other outcomes are more likely. I definitely see more vicious action this week. MA appears keen to steer this away from admin or pre-pack based on his recent offers. Perhaps he does not rate his chances of picking up what he wants from the administrators.

Hi HK, After 18th April, he could offer what he wanted and given the obvious distress of the company, even a low offer of 2-3p is likely to be accepted by holders. Right now, I don't think he'll offer since takeover rules would mean he'd have to pay so much.

But the speed this is moving, 18th April seems an eternity away. By then DEB may no longer exist/be owned by creditors/have - by some miracle - refinanced successfully. The constraints involved could throw up something unusual in the next few days.

ATB

Yes johnson, MA would his £150m of equity along with all other shareholders if it went into administration. He'd be one of the parties administrators might sell some of the assets to, but there'd be no guarantee of that. He could end up with nowt.

He'll be weighing the likelihood of getting what he wants from administration (writing off £150m) vs. bidding for DEB and all it's attendant problems. Bidding would cost nearly 3.5x the amount for certain control (of all the business's problems too).

Monday trading is impossible to predict. Between now and then, there could be further news released. It might even be suspended.

If there is no other news and no hyperbolic press stories, then I'd expect huge volatility (intraday swings of more than 100% as seen on Friday) interspersed with periods of near calmness. By Friday, I can imagine DEB may no longer exist.

He can't just buy another 21% johnson. As soon as a holder exceeds more than 30% of the issued share capital of a company, they have to make a bid for everything else. And, since a holder cannot bid less than what they paid for any purchase in the previous 12 months, MA would have to bid about 22p a share (the trading price when he last acquired equity on 18th April 2018).

Like you HK, I was overweight here vs the rest of my holdings. For me the residue is not worth bothering about, but as you've still got over £10k to salvage, it's time to think about how to exit. That's still a good chunk of dough.

Commiserations HK85, that's a hard loss to take. Did DEB represent a large percentage of your equity portfolio? I've written off the £12k I had in here which burns.