The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
Bin bell and put the 78% shareholders back in charge. But can we raise enough money and what are the prospects for the company?
Mr Bell, who is reported to be worth around £400m and is a shareholder in several FTSE-listed companies, is said to have interests ranging from payroll and recruitment to development, hospitals and care homes. A source said yesterday that Mr Bell “vigorously denied any wrongdoing” and was a “well respected” member of the business community on the Isle of Man who gave “generously” to local charities. Documents from the Isle of Man Financial Crime Unit, seen by The IoS, lists Mr Bell as an individual who is currently “part of an active criminal investigation”. The note to regulators lists three other individuals and 25 firms as also under investigation.
...more about the big gap between providing the services and getting payment. That's where Mr Bell has interjected, but potentially at a huge cost to existing shareholders in his significant favour.
Why should Mr Bell be able to put money into the company, earn 4% pa and be able to convert at .0005 pence. This should be open to ALL potential investors. He is just taking the.....
I have done some quick calculations and I personally feel that existing shareholders are being stitched-up and if the proposal by Mr Bell goes ahead he will potentially end up owning between 53% to 57% of the company (depending on Screenetics option to take-up shares based on 2014/15 profits). The remaining shareholders, who currently own around 70% will hold just 40%. The reason we have got to this stage is that this situation has been orchestrated by threatening DELISTING, thereby virtually overnight devaluing the company to a tenth of it's value (from 0.5 pence to 0.05), which Mr Bell is now proposing he converts his £1,55m loan to shares at an unbelievable preferential rate. This would give him a total holding of 3.634 billion shares and existing shareholders (should they take-up the maximum aggregate of £500k worth of shares at the preferential rate) holding just 2,780 billion shares. I personally feel that Bell's proposal to convert his loan into shares at 0.05 pence is outrageous and a more realistic conversion would be 0.5 pence. Having converted these, then he should have the same option to buy a corresponding amount at 0.005 pence). So this would average out that he is able to convert + buy additional amount representing around 620m shares (as opposed to 3.1 billion shares) I welcome any comments on this and can provide calculations.
Check out the profile of kevin hillocks the md of screenetics ---"on target to acheive phenomenal growth 2014/15" https://touch.www.linkedin.com/?sessionid=8711608871460967&as=false&rs=false&can=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Fpub%2Fdiarmuid-o-donnell%2F73%2F3a2%2F820#profile-background-detail/234290741/name:xAQQ/
My own view is that Bell wants to build the company up ready for sale over the next 3 to 5 years. With his current holding + new shares + income and potential further share buying he will hold a substantial part of the company. The Screenetics owner will also acquire many shares through the potential agreements against short and medium term profits. So anyone who goes along for this ride is likely to benefit too.
Then they can inform ALL shareholders of the situation and at the end of the meeting post an appropriate RNS so everyone is aware.
Given that Mr Bell is the minority stakeholder (30%) compared to the rest of us (70%) and we are expected to contribute to the rights offer on the same terms then we should have the same information as him. Where are the interims and forecasts. Without such info we are totally blind. And what about the threatened Delisting. If he is Not now making a takeover then this statement needs to be retracted as part of rule 9. This might even push the price up closer to what it should be? This all sounds very cloak and dagger and I suspect, if regulators look at the sum of actions that have taken place since the very positive announcement several months ago, them this might even be breaching some of the regulatory rules. Others thoughts?
All this activity with the price is fine for the day traders but where are the figures?
Screenetics reported that they continue to expand. I am just wondering whether Bell may have some disagreement with the Screenetics growth, which he may not be willing to support. So he has made a public statement to this end. As Wollie has said based on the forecast income recently announced this all looks very odd.
As the income seems to continue to roll in, it looks like any offer price will need to be at a very significant premium to the current price to gain shareholder approval for a MBO. And while I can see why the 'threat' of delisting would, to some extent deflate the price, together with the uncertaincy of the reformed Board, it seems overdone given (as Wollie has pointed out previously) the very strong recent market update from the Board and Delisting would require 75% shareholder approval.
Can you identify where you got this from, as I looked on the Ultrasis web site without success? Thanks
Insider for who? Do you see the departure as a good or bad thing?
so it looks like Stage 3 might be to take-up shares at a huge discount (to the true market value) and obtain a 75%+ holding so that it cannot be outvoted during a to be announced delisting. (Or if delayed long enough allow for the Screenetics owner to take-up their 20 odd % and join together for the delisting vote). I think I will be writing to the 'The Panel on Takeovers and Mergers'. Perhaps others might consider the situation too?
.....POSTPONED posting a circular to shareholders seeking cancellation of the Company's shares to trading on AIM
For the long termers - Let's hope the Price pushes through the roof.
[Stage 1], So, Ultrasis throw in the curved ball and announce a 'potential delisting', which over the past couple of weeks inevitably (based on other companies) lowers the share price, in this case to just a fraction of it's previous average trading price. [Stage 2] and then look to take advantage of the power of thier Money to take-up a HUGE block of shares at rock bottom price, thereby hugely diluting the value of the shares. Oddly, MR Bell appears to be trying to protect shareholder value within another company where he has heavily invested (see Woolworth posting below). It seems the boot is now on the other foot. I think I might be writing to the 'The Panel on Takeovers and Mergers'. Perhaps others might consider the situation too?
Further to the announcement of 7 October 2014, the Company announces that it has entered into further discussions with Mr Paul Bell, a substantial shareholder in the Company. The Company and Mr Bell are currently considering a number of options. In the event that these discussions did result in an agreement for Mr Bell to provide further funding over and above the current loan facility it is likely that any such funding would result in shares in the Company being issued at a discount to the current share price. If this was to happen, it is the intention that other ordinary shareholders in the Company would be able to participate on comparable terms in respect of any equity investment. A refinancing is still far from certain and any significant equity investment will require the consent of both The Panel on Takeovers and Mergers and shareholders independent of Mr Bell. Therefore, whilst there can be no guarantee as to a successful conclusion to these ongoing discussions, the Company has, with Mr Bell's agreement, postponed posting a circular to shareholders seeking cancellation of the Company's shares to trading on AIM. A further announcement will be made in due course and in the meantime Mr Bell continues to provide working capital to the Company under the terms of the existing loan arrangements (the "Current Facilities"). It remains the case that Mr Bell's consent is required in relation to each drawdown under the Current Facilities on an ongoing basis for the reasons set out in the announcement dated 7 October 2014.
Woolworth, I wonder whether the delisting is suggested NOW so that any imminent new RNSs (for even more contract news) would not be required as deregulated from AIM rules? Perhaps too much good news too soon?