Member Info for Franalex

Far more than he would be prepared to pay. Will probably try to get another major holder on side.

Wish it was so. I was in discussion with one of the major landlords only last year and raised many of the issues that to me were logical. Their position is totally uncompromising, particularly in the south-east and especially where they have huge portfolios. Their arguement is that to make one negotiated price reduction potentially undermines the future income of their entire portfolio and they would rather have a few properties sitting empty than see a widespread rent reduction. I am aware of one major company who has a clause in their lease that if the landlord reduces the rent on a major property within a certain area of their property then they automatically get the same reduction so decisions are not as simple as it may initiall seem. It is worth bearing in mind that it is the problematic ones that hit the headlines, the majority of their client base pay regularly and with no issues. The position may be different with smaller landlords but in general most of the property that Debenhams lease will be from major landlords.

Have you ever been involved in completing a major transaction? If he buys the business he will not be able to force the landlords to do any deals as he will have inherited the leases and they will see these backed by a much stronger covenant than before and why would they negotiate? He will only be able to force their hand when he is able to hold the threat of a CVA or administration over them. Some of these landlords are far bigger than MA and take account on how any single decision may have ramifications over their entire estate.

I am sure the Board are in constant communication with an insolvency practitioner to ensure they do not trade insolvency or fraudulently and put themselves at significant risk. They will never make this public, nor are they obliged to.

Can not see the slightest reason why anyone should bid other than via a CVA or administration. Cloud cuckoo land analysis of future value who be needed to attribute any meaningful value to a business trading badly with large liabilities and a balance sheet, net of intangibles, worth very little.

Slightly ironic that in the RNS, the Provident Board accuse NSF of having a track record of value destruction. Have they bothered to look at their own track record?

I suspect because a number of us have done major acquisitions. Why would he want to take on all of Debenhams liabilities, particularly the leases, through a normal acquisition? If it is done through a CVA or pre-pack then the future leases can be dealt with when his bargaining position (ie administration) is at the strongest. There are seemingly no other potential buyers therefore he can take his time. The liquidation value of the business will probably be zero. Equally, does he really want some huge properties in cities where he already has vast HoF sites, if he does a normal acquisition the reorganisation costs will be massive for these and when you look at buying a business, it is not just the price paid for the shares but all of the other costs and assumed liabilities. Consequently, I think he will look to acquire the equity for close to nothing. Hope I am wrong, as I have a holding, but my experience tells me otherwise.

Firstly he did not have HoF a year ago and secondly most retailers shares have dived since. He probably knows he made a mistake and will notionally, if not financially, have written it off. Just cannot see why he would ever want the entire Debenhams estate and a CVA or pre-pack will allow his to pci what he wants.

Nothing to stop him but why would he? Price likely to go lower, if he tries to acquire without a CVA or pre-pack he will assume all liabilities including lease agreements. He knows there is likely to be few, if any other bidders, so can play a waiting game. He also knows that with his existing equity stake he can frustrate another bidder, unlikely though this is.

It is not really that large when compared to the likes of SIta and Veolia and now has relatively little business in the U.K. The ATM plant is very large and has been operational for many years, generally without issues. I have been round it and it is impressive but if something has gone wrong from an environmental issue it could be costly to remedy and with an impact on current performance when out of production, I personally, feel that the business has been mis -managed for over 8 years. It turned down a bid from Carlyle Group in 2010/11 of 120p per share because it did not fully reflect the value in the business and has been in pretty steady decline since.

Hope you are right but this site is absolutely full of individuals predicting a share
price rise for weeks and saying they have bought more shares. At least they do so with their eyes open that they could end up with nothing. Ashley will have notionally, at least, written off the value of his current investment and therefore will want to buy at as low a price as possible, if at all, and a CVA would allow him to get rid of some liabilities in an acquisition. I suspect he knows there will be few other bidders and may well look to acquire through some form of insolvency event (CVA or administration).

I think your view on landlords is very naive and indicates a lack of experience in dealing with them. Many of these landlords have vast portfolios, for example around Oxford St and any decision they make will be judged against the potential impact of all of their portfolio in that area. In addition, a few larger tenants have negotiated clauses that automatically give them a rent reduction in the event of the landlord reducing neighbouring rents to a lower level including via a CVA. It is often not a one dimensional decision for them and they have a lot of clout. I speak from have recently concluded a negotiation with one of the major landlords. The West End of London.

In fairness the £480m is the net asset position in the balance sheet, but there is almost £700m of intangibles within this, largely goodwill, that would fetch almost nothing in an insolvency. The future lease liabilities will be a major millstone to any prospective purchaser as it is difficult to see any turnaround in trading being sufficient to cover these on an on-going basis and exiting will cost a huge amount. Any buyer will not look at just what he pays for the shares but also other costs of acquisition including redundancy costs and buying out of leases. Hence a single digit pence per share may not look attractive to shareholders but will just be part of total acquisition costs and a buyer will only be interested in the total cost.

Wishful thinking based on some very flawed analysis. Where will other bids come from? MA was only real option on HoF, so many other high street retailers have just closed the doors and John Lewis and M&S continue to struggle along. May recover over time but as likely to go under. So many individuals earlier this week predicting 10p plus by Friday are going to be wrong.

No just a realisation that two key fundamentals have not changed, firstly trading and secondly the current cost base.

A lot of people being very positive and talking price back up. Remember exactly the same type of comments on two of my other holdings, Afren and Carillion. Yesterday’s news was good but does not change the trading fundamentals or the cost base. Any restructuring will consume a lot of cash and have seen nothing that will lift trading. In my view as likely to be a total wipeout for shareholders as hitting 20p but I am hanging in, in hope more than expectation.

Agree the high street needs help but around me the local council seem to want to help the destruction. More increases in parking charges and the introduction of parking meters at some small local stations where previously people could park free of charge and get a local train the short distance to the city. Easier to shop on-line and not pay the additional costs.

As I have said before, this is a management not a market issue. Business is performing much worse that most competitors in the sector including smaller private operators. Agree it looks oversold but it needs an activist investor to make something happen. Looks ripe for a PE intervention if it can find a management team who understand the sector.

I have been giving it 10 years! A number of brokers were advising clients to buy at all the prices you mentioned, the continental business is very sound just think that they reorganised it inappropriately a few years ago.

I have been giving it 10 years! A number of brokers were advising clients to buy at all the prices you mentioned, the continental business is very sound just think that they reorganised it inappropriately a few years ago.