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Yinyang January meeting isn’t too far away they will be booted sooner or later it’s just a matter of time
Spot on Pearls I hope you’ve managed to reduce your losses today
Kammi I think you’re right and option 2 would be more preferable for MA. But the figure mentioned below isn’t totally accurate. The current debt of deb is 320M plus the 200M which they secured today by the lenders and bondhollders of which they will repay the 40M bridge facility they received in February, so their total debt stands at 520M
MikG 5p was MA initial potential takeover offer there will be a lot of back and forth between him and the bod to try and increase it a little bit but I highly doubt that the final firm offer will exceed 7-10. We have to be realistic he’s a businessman and not a charity.
isoltofcamelot It’s quite simple MA has proven he is not willing to let go of DEB he wants to include it in his empire at any cost
He initially offered £40M then £150M and when he failed he considered a potential takeover bid, you will hear a lot of deramper here they were saying come Friday DEB will be delisted and fall in the hands on lenders and bondholes and here we are the it’s still trading
Upside earlier this month MA offered £150M loan to DEB I don’t see any reason why not he will go ahead with that option once again
Tipsterchep as highlighted in the RNS this morning
These milestones include Sports Direct International plc ("Sports Direct") or another shareholder holding 25% or more of the company shares, entering into an agreement with the company and its lenders covering either (i) a firm and binding offer for the company which includes satisfactory arrangements to refinance the group debt that becomes due and payable on a change of control, and provides the group with sufficient working capital; or (ii) cancellation of the request to convene an EGM of the company, a stabilisation agreement with the company and a commitment by Sports Direct to either underwrite a rights issue by the company or provide funding by way of a subordinated debt instrument on terms agreed with the group's lenders and noteholders.
I highly believe that MA will go with option 2 so he doesn’t have to pay lenders and Bondholders outright as per the clause of the change on control in the company
DC2007 i have already priced in my £71K losses in my other shareholdings. Whatever happens with deb I just have to accept it now not much that can be done. DEB SP was recovering back in September when the market priced in a potential merger with HoF but SPD announced they had no intention to bid for it so the SP declines more and MA can snap it on the cheap. Now that he’s squeezed in the corner he’s rushing with solutions to save his stake. All what i can say is that we as PI’s got caught in pure corporate politics B/S.
Daniel what’s your view on the deadline set by LSE re the bid
Hi DC2007 my position is still the same I haven’t done much with it. My average cost is 15p I cannot do much with the current SP
Pseudonym I’m not too sure why LSE would acknowledge his potential offer and set a deadline if what you’re saying is right I’m not a takeover expert. Daniel can you pls share your views
Thanks
Check the link below that allows SPD a deadline to bid for deb till the 22/04/19
http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20190328:nRSb3920Ua
Thanks daniel for your feedback, just to make things clear daniel I’ve never mentioned anything about the takeover bid it’s DEb investor office who said it to me, so from your experience how would you read that
pseudonym No he hasn’t made a firm bid yet DEB investors relations office even used the word potential takeover bid
I’ve called Debenhams Investors relations office today to find whether we will be wiped out as shareholders at the closing time of the lse, I was advised due to the fact that there’s a potential takeover bid at the moment they are not allowed to comment as per the regulation.
You’re to be the subject matter expert on corporate, could you please explain whether the bid would still be considered till the 22/04 and DEB can’t wipe shareholders as of now despite attaining the bondholders consent
Daniel this article published on the FT backs your theory, MA is acting as if he has all the time in the world for his bid to go through
If the phrase “possible firm offer” is an oxymoron, what does that make the offerer? Especially an offerer who is still “considering” the firmness of the possibility less than 48 hours before a rival deal is voted on? This is a question that the board and shareholders of Debenhams must now ask, after Mike Ashley’s Sports Direct waited until 11pm on Tuesday to indicate a price for buying the 70 per cent of the group’s equity it does not already own.
Having spent months trying to gain control of the department store chain without paying its shareholders anything — by offering loans or conditional asset purchases — Sports Direct suddenly decided they deserved more than being “ignored, cast aside and trampled underfoot” in Debenhams’ own refinancing plan. If Mr Ashley reckoned this late attempt to save face, and his own shareholding, looked convincing, he must think we are morons. As well.
As analysts at GlobalData, noted: “His talk of a £61m offer, without actually making one, is hard to take too seriously.” Not least because it fails to address the two issues that Debenhams must confront within days: a plan for £560m of debt, which would all fall due on a takeover; and a way to meet about £200m of immediate funding requirements. Mr Ashley’s “possible firm offer” includes only an impossibly unfirm commitment to “assist Debenhams” with immediate funding. And that assistance would only come if the cash-strapped retailer scrapped its own well-advanced refinancing plans.
To be fair to Mr Ashley, he actually has three intelligent reasons for making an offer for Debenhams equity. First, it would prevent Sports Direct’s 30 per cent stake — and everyone else’s — being wiped out in a likely debt-for-equity swap that hands control to lenders. That matters to his own shareholders, too. Second, he could realise value — analysts at Jefferies note that using his £61m equity valuation, 2018’s net debt of £321m, and calendar 2019 earnings of £100m, the enterprise value is only 3.8 times earnings. In reality, given the now far higher debt and lower earnings, it is more expensive than that, but Sports Direct does have the ability to cover liabilities and seek better refinancing. Third, he could realise his vision of turning both Debenhams and House of Fraser into “Harrods of the High Street”. Just the leverage with landlords and suppliers he would gain would be worth it.
So why not detail one — or all — of these plans in the “possible firm offer”?
Possibly because the real stupidity is leaving it all far too late. If Mr Ashley had offered a price and a plan months ago, instead of trying to avoid paying shareholders, there would have been more time for the board and investors to consider it.
Now, there are just hours until a vote on bond refinancing is set to hand creditors more control of Debenhams’ assets. Mr
Smartie you’re on fire today mate take it easy no need for all of this!!
Warik i glad to hear that you’ve managed to minimise your losses significantly, as for me tbh I no longer care about the outcome I’ve written off my bad investment against my last year’s bonus I’d rather concentrate on my daily job instead
Warik it’s hard for me to trade throughout the day as I start working at 7:30 and finish at 4 can’t take much advantage of the SP volatility
Daniel i totally agree all what SPD is trying to do is stalling the financing restructuring, their tactic is very old school they have to realise that this is now a very pressing matter and they should approach the BOD with a realistic firm offer