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"Who will run the business the day after the BoD walks"

Call me old fashioned, but I am sure there must be atleast one CEO out there who can show their commitment to the business by putting their hand in their pocket and purchasing a few shares alongside running the company for the good of the shareholders?

And also if the current board walks they would be fine, as I am sure they would walk into highly paid jobs with fancy share options with Mercuria/Tailwind? Or perhaps they wont be so keen to fund the boards larges when it is on their own dollar?

I see the Raper fellow is going to be on a podcast discussing his activism on Serica. Will be interesting to hear a bit more on his views and potentially other shareholders he has been in contact with, especially now he has challenged Alex Stahel's take on twitter.

https://twitter.com/AndrewRangeley/status/1615691505938694145

I agree with Dennis, Raper's response is overly emotional and Stahel is focused on the numbers. I have followed Stahel, as I am sure a few on here have, for the last few years as he has been vocal about how undervalued Serica is. He organised the twitter spaces with Mitch in the summer. He comes across as very astute and knows his stuff and I was eager to get his take on it. I am reassured he can get the numbers to work if we are just viewing all this on NAV. I would think with his 1.3% and the following of other shareholders he would have that would make a NO vote very unlikely. In addition, if he is able to run those numbers and come up with an increase in value of 45% then the bigger institutional holders will have done the same, which makes the dilution almost certain to pass now, I would think.

For me it just boils down to a case of interpretation. Do you trust Mercuria with 28.9% control to do the right thing by shareholders or not?

Flex, I don't really know what they can do in such a short time frame. The deal must have taken many months of negotiation, so to make any changes over a weekend or indeed between now and the vote I cant see being workable. Especially as it will need to be something extra special to get the no voters onside now, which I guess Mercuria wont accept anyway.

Also some people will already have voted so I don't see how you could change the terms now.

https://twitter.com/agnostoxxx/status/1613921681436966914

Made it onto some sort of Bloomberg activism database for what that is worth. The board have replied to confirm receipt of the letter and he expects a reply in due course. In the meantime he is looking for ways to contact the Hardy's.

I too saw the tweets before they were removed. He was critical of management for issuing shares at 278p so soon after having advised against taking 425p. He also said the deal was communicated poorly by the management and this has led to the initial pushback. When he plugged in the numbers though he found that Mercuria taking 111 million shares due to the NAV of tailwind assets was reasonable. He also seemed to expect the TW assets to be highly cash generative, especially using the tax losses and due to this Management would use this cash to do buy backs to bolster the share price whilst also balancing growth. He seemed to indicate he was coming to this conclusion when modelling the tailwind assets as he hadn't seen a CPR. Also he said the share price being at 274p was unacceptable. However he would support the deal. I only have the tweets from memory, there were lots of tables and spreadsheets attached to show why he has reached these conclusions and to show the numbers he has ran, but I never looked at these before the tweet was taken down.

I don't know what he means about there not being a CPR, there was one mentioned in the presentation, but only upto 31 Dec 2021. So not a current one, so don't know if he means no current one so he has had to model for the following year? I only mention this as I am not sure why the tweet was deleted, perhaps it was because he missed the CPR and he has to remodel his figures more accurately?

I have huge respect for Alexander and it is reassuring that he sees some merit in the deal.

On HL, within my online account towards the right handside under secure messages there is a bit called shareholder meetings. I clicked on view shareholder meetings and then it comes up with the options to give instruction on the Serica vote. I assume this would be the same for everyone with an online HL account?

Banburyboy, I have also voted no via HL, not sure if I am within the 18 or not.

As for Yes votes or those potentially in favour of the deal that I would assume to be shareholders, from memory across boards and twitter I can find :-

John Rosier ( runs JICUK and might influence a decent amount of shareholders)

Stemis/NigelPM over on ADVFN

Affan @feynzz from twitter - He made a good case for the tax losses in the beginning.

Mitch Flegg @mitchfleggCEO from twitter - Minority shareholder has consistently talked up the Tailwind assets. ;)

Regardless of what you think of the open letter and the tone used within it, it has stirred up much more debate on the deal across chat boards and twitter etc....which can only be a good thing. The messages surrounding the bad parts of the deal are getting out there to a wider audience. It may only be 0.5% of a holding, but I believe this is the start of more and more momentum building from similar portfolios like the Raper one coming out more publically against the deal.

Whilst I believe the board will have the votes they need sewn up whilst privately selling the merits of the deal to the larger holders. Some of those larger holders might be thinking again now they have seen the reaction from PI's, analysts, brokers and more importantly from the market regarding the share price. To try and stop the deal I think we will need some of those larger holders to change their minds. The Hardy's have 10% and that is a pretty big balance of power in this scenario and will go a long way to making or breaking the deal. Can you imagine the power an entity with 29% would have going forward?!

https://rapercapital.com/2023/01/12/an-open-letter-to-the-board-of-serica-energy-plc/

I think all shareholders should read this open letter. It is pretty scathing and is taking 1.3 million shares to vote no. Now circulars and presentations are over, might it be the start of some other bigger names to also come out and see the deal for what it is and vote no?

I am a long term holder and try not to get swayed by the short term movements in the share price. However lets look at previous deals and reaction : -

Erskine deal, shares jump 10% on announcement. (also dealing with BP we managed to only give away 5% of the company) Universally accepted as a good deal.

BKR deal, shares suspended, come back and jump 140%. Universally accepted as a good deal.

Kistos make public their offer and shares jump around 10% I think from memory. There was plenty in favour of the deal but also plenty against it. We were strongly advised not to take it.

Tailwind deal announced and shares down 6% and have fallen further since. Some in favour of deal but a lot of visceral opposition to it, from PI's and also brokers and analysts.

Now I am not saying the market is correct in the immediate reactions to all of the above, indeed with the Erskine and BKR deals I thought the market didn't re-rate our shares enough. However generally a good deal is loved by all and the market gives an indication of this.

The Erskine and BKR deals were tremendous for us and I am not expecting anything close to those types of deals again. But the 5 year Theresa May impression of 'no deal is better than a bad deal' only to come up with this in the current context in the current climate it is just underwhelming at best.

I broadly agree with most of what has been said here. There were yet more positives in the presentation which has moved the dial on the deal to less of a bad deal. Mitch did well on some areas and not so well on others, but fair play to him for answering a lot of questions. The concerns regarding Mercuria trying to take the company private by stealth were met with, 'well they have never done that before.' It isn't that reassuring.

One of the questions I posed, which wasn't answered was what happens if the dilution is voted against. I get Mercuria wanted 28% of the new entity but that is all a negotiating tactic, had we threatened to walk they may have lowered their number. To me the 28% is the absolute max they could have asked for to keep it below the 30% and it looks like we haven't tried to get this down to a more acceptable level. So perhaps a NO vote will show them the 28% is far too high and they wont get it, and if Mercuria really do want this deal they will have to re-negotiate something more acceptable. More cash less equity perhaps?

He did answer one of my questions about how the deal was structured much more favourably towards Mercuria, and fair enough his opinion was that it wasn't and the deal was fair for both sides when looking at the asset values, even if I don't agree with him.

Taking everything into consideration, I will still be voting NO.

So the circular is out, and I just checked the share price and it didn't close above 425p, so it will be a NO from me.

Deal announced at 278p, circular now issued and share price now 271p, the tax loss crew clinging to the irrational markets narrative not realising the great value of the £470 million golden egg that every day Private investors cannot even begin to understand. Markets are irrational, but they can also be rational, and the share price is reflecting this deal for what it it, a bad one! Indeed, one would think now the £470 million figure is there in black and white, that it would have merited a bounce of more than 4% on the day.

The greater detail given does make it less of a bad deal than first thought, but I still can't square the dilution at 278p for 28%. And all the extra life from fields and extra reserves we are creating out of thin air, that will presumably be done with our skill set and expertise? The way we have maintained our reserves around 60million has been a credit to the operational side of management. We are paying them for us to use our operational excellence to extend the life of their fields. We will all be rich...if only you can wait until 2030.

But we're an oil company now. ;)

Brilliant post from Dickupham that this is the biggest fear of the deal and I would guess a lot of people wouldn't even realise that this was possible, that Mercuria could orchestrate a situation to just buy your shares at market value and take the company private and there was nothing you could do. I expect the board won't be affected by this as they will retain cushy jobs or get huge pay offs.

Fair price right now would be around 500p-600p per share. Yet our share price is half of that. You don't think Mercuria will want to supress our share price for 18 months and then take the whole thing private at 250p a share, run the assets down for the next 5 or 6 years and distribute the cash to themselves?

As NKOTB says, I am sure we are all for everyones interests to be alligned and for everyone, Mercuria, Mitch, the board, shareholders to be rewarded when the share price reaches a fairer level and there are so many ways that this could be easily structured into the deal. But this deal is for Mercuria, Mitch and the board to get rewarded now on the promise the share price will reach a fair level later. Which it might or it might not, but the risk/reward for shareholders within this deal is just awful.

It was good of him to take the time to respond, this point stuck out for me "I did express our concerns about the lack of selling Serica effectively and modest/poor incremental growth. Mitch recognises this and as from next week hopes to start addressing that - hooray!" It is good he is now aware of this but this should have been recognised long ago and addressed. We are going to sell Serica more effectively and address our poor incremental growth over the last 4 years now we have given away 28% of the company. Call me old fashioned but I would rather that had spent the last 4 years doing this rather than do it once they have diluted my shareholding.

I would echo what RELLIM says in that nothing in there has changed my mind either.

Brilliant email Infor and one hopes the points raised can gain a wider audience. The overwhelming response from PI's and also the market is that this is a bad deal for Serica. Now I know both of those can be irrational and there are one or two voices highlighting the postives about the deal. These being the value of the tax losses, the deal paying for itself in a short space of time and that we should just trust the management that they know what they are doing as they have taken the share price to excellent returns over the last 6 or 7 years. What I would say is Mitch was brought on to be CEO of a company worth £50 million, he now finds himself as CEO of a company worth £1bn+ at one point. So as for trusting the management, I think the shareholders have done that for an extended period and have had plenty of patience that they would find a value enhancing way forward, despite there being no M&A for years. The final straw was the Kistos offer at 425p as that set a benchmark and once again we trusted in the management that they knew what was best and had something better in mind. But clearly this Tailwind deal is not even close. Now rather than try to espouse how great this deal is, management seem to want to sell the promise of further deals and strategic partnerships rather than sell the promise of this one. Investing on AIM is a risky business and you certainly cannot approach it thinking the management will have the best interests of shareholders at heart at all times as that is not how it works. Once the management starts selling promises rather than focusing on what is in front of them, this is typically when you get bad experiences on AIM.

I look forward to hearing how Mitch responds to your questions Infor

Will the board support this deal regardless of the feedback from the shareholders?

Below is a link to which Upomega refers to the mention of deals in North Africa after the Tailwind deal.

Serica's dividend policy will not change following the deal but if the company continues to grow its cash reserves, "we will have to look at other methods of returning cash to shareholders," Flegg said.

More vague promises of cash being returned to shareholders, although now we will have to run it by Mercuria first I assume. In the past they have avoided returning cash to shareholders due to the need to keep the cash for potential M&A, then it was to cover hedging liabilities, then they needed to hold onto the cash to fund North Eigg if it needs developed. Now again, I have applied the benifit of the doubt in the past that these could have been legitimate reasons and they are plausible. So now we are looking at European and North African opportunities for expansion, we will have more hedging inplace thanks to our strategic tie up with Mercuria and we will be developing some Tailwind fields. So potentially we will be doing all 3 things at the same time, which they said couldn't be done alongside distributing cash to shareholders. I get it, that as a bigger entity it will be more feasible to do this and with Meruria involved in the hedging and less volatile gas prices we might not need to tie up as much capital for the hedging. But when you have started to lose faith in the management it is hard to continually believe in these promises of Jam tomorrow.

https://www.oedigital.com/news/501969-serica-pushes-for-expansion-beyond-uk-north-sea-after-tailwind-deal#.Y7dRGj95XKo.twitter

Hi Beech22, that is good news if they are atleast questioning the deal at this stage. I see from your previous postings you have mentioned the Hardy's a few times and seem to be in contact with them. I only hope you are legit and can provide some further updates when the circular comes out.