Member Info for james188

Time to join this board. I have invested some liquidated TEF proceeds in BWY, but rather more devoted to RDW. Still building, so much more to invest when CBRE pay up. Very sorry to see the demise of TEF. The TEF non-prime London focus on BTR was very attractive to me and there is really not an equivalent that is sensibly priced, so a rethink is underway. BWY have some London exposure, but seem to be doing well at Nine Elms, which I fear will be a graveyard for some participants (and I am not thinking about Greystar/Henderson).

I voted against, but it was always highly likely to go through unless a serious counter-bidder emerged. I was surprised that the votes against were pretty low. Time to move on.

One final thought. If you are sufficiently motivated and available, you could ask the platform to issue a letter of representation tomorrow and then show up in person on Tuesday and vote. Corporate action nominee votes are now closed. Some/most platforms may not be able to issue a LOR tomorrow, so this is a long shot. When I last needed to do this two or three years ago, the letter arrived by post, rather than e-mail. Votes really matter for the Court hearing. All shareholders have an equal vote, irrespective of the number of shares that they hold - i.e. the same as the likes of the hedge fund players who now hold a significant part of the equity. BTW, is anyone bothering to attend the Court hearing next Tuesday?

Too late to vote nominee shares, sadly. Votes had to be in by Friday morning at latest, save that direct holders could turn up in person and cast a vote on the scheme proposal (Court meeting) just before the meeting starts next Tuesday.

The majority of PI shares will be held in nominee accounts. Although many - but not all - platforms (e.g. Hargreaves Lansdown and Interactive Investor) will facilitate shareholders voting as a corporate action, it is a safe bet that many such holders will not vote. If it gets as far as the 6th August meetings without a counter-offer, I think that it is game over. On the issue of due diligence by another party, TEF is a publicly listed company and the counter-offer would be hostile. I don't believe that such a bidder would be entitled to carry out any due diligence. The timing constraint would be putting the financing for such an offer in place. If the appetite is there, there is still enough time left.

Sain, I agree that this document does not enlarge on what we already knew about the reasons for the proposed sale - not even who approached who first.

As to the meeting yesterday, in response to a couple of queries, I made the point that the meeting was rather a non-event (as expected), because the bid could not be discussed. The conversations that I had afterwards were on other off piste stuff not in any way relevant to the bid, directly or indirectly.

As a non-local (I live in Central London), I would only add that what goes on in Waltham Cross stays in Waltham Cross. The TEF specific stuff will hopefully be ventilated on August 6th.

I went to the AGM and - predictably - it was a bit of a non-event, although I had some interesting discussions post-meeting, not on bid issues, which are clearly the topic du jour. We will have to wait until the 6th August meeting. I understand that the Scheme Document should be out tomorrow or the start of next week, at latest. Attendance was down on the last few years for obvious reasons, but at least all the board turned up and made themselves available for questions after the formal business, when I suspect that they would rather have been elsewhere. I saw that a few advisors from CBRE also attended, presumably mainly to check that nothing off piste was discussed.

Not hard to see why CBRE are so keen on the deal. I will be voting against.

DC's departure was announced in the 3 July paper posted to shareholders, setting out the acquisition terms. The statement said hat "As a result of the recent change in Telford Homes' strategy to focus on the BTR market, [DC] has agreed with the board of Telford Homes that there is no long term need for his role on the Board of Telford Homes and that he would prefer to look for other opportunities." I wonder.

In the overall scheme of things, I cannot get as worked up as ISS with the re-election of PwC as auditors. One way or another, TEF is virtually certain to delist and so this issue is somewhat academic. That same comment applies more generally to a number of ongoing issues that I had intended to explore next Thursday. I will probably attend, but it probably be a rather awkward meeting, especially as the BoD will not be able to comment on the key issues that shareholders really want to discuss. I hope that the Scheme Document is issued before the AGM, but we don't even know when that is due to happen.

The problem is that, now this bid has been accepted, the TEF business has to operate within relatively tight constraints and so it is effectively in limbo. I don't want a rushed sale (because I hope that there will be better bids forthcoming), but long term stupor would be very damaging. I wonder how many of the management team will hang around for very long. I see that David Campbell is already off.

PIs will not determine the vote, but will have an influence. I do not regard this as a done deal and hope/expect that other interested parties will make better offers than this low ball bid. I will be voting against this bid, both in direct shares I hold and (much more hassle) in nominee holdings.

I hope that there will be better offers that are now teased out from the likes of Greystar. I don’t think that much of the recommended bid price.

Interesting comments from BKG in the Outlook section of their final results, which came out this morning. They note that the number of new construction starts has been slowing down over the last few years (for obvious reasons) and that is now translating through to markedly less completions, so that the shortage as against the target in the draft London Plan becomes ever more marked.

The CEO goes on to state that "Sales continue to be split broadly even between owner occupiers and investors, with overseas investors continuing to see relative value in the London market". So, somewhat different to TEF's recent experience - and the average selling price for BKG homes is quite a bit higher than the average price of TEF properties.

Bit of a surprise. It was only last week that JDS said that TEF were not targeting individual investors and that no overseas launches were planned following the Galliards experience. I assume this is low key and led by the agents. Let's hope that they unearth some interest.

By the way, did anyone else pick up on the suggestion JDS made in response to a question from an analyst that TEF might be prepared to get involved in the letting or management of BTR apartments - something that TEF have always avoided like the plague? I assume that comes on the back of detailed feedback from institutional investors. Very different risk profile, so maybe something to talk about at the AGM.

On the whole, the final numbers (in particular gross revenues, EPS, margins and NAV per share) were better than I expected, based on the March 2019 Edison forecast, although PBT was slightly lower. Like others, I also noted the material increases in admin and selling expenses. I hope that Edison will now produce an updated note.

Aside from the points already made in the various posts, a few things not mentioned in the final results or the presentation/analyst briefing struck me:-

1. Radio silence on the circa 700 home deal with a major land owner in East London announced back in October 2018, where we were told in the interims that further details would be announced "in the near future". If it happens, it would the biggest scheme aside from Nine Elms, so I was surprised that nothing was said about it.

2. Apart from the indication that pretty much anything other than Greenford is now a candidate for BTR, no detail as to any selected sites and rough timetable. Most of the schemes on the books are under 200 homes (once affordable housing is stripped out), so it looks as if new sites will need to be acquired to feed Invesco.

3. The timetable for signing the build contract with Greystar for Nine Elms has slipped still further, although the presentation talks about signing being imminent, so hopefully there will be an formal RNS in the next few days.

For those who have the time, the audio webcast of the analysts meeting this morning (link on the TEF website as well as in the RNS this morning) is worth a listen, particularly the Q&A which followed the formal presentation.

All a bit weird, particularly when you look at the likes of Watkins Jones, which the market views very differently, for reasons which largely escape me (although they have been successful as well in the private sector student accommodation market). If you believe in the fundamentals, then what a fantastic time to invest. Just under two weeks before we get updated details. I imagine that they are working very hard at HQ. For example, failure to sign the 9 Elms contract would be a miss and it is a long time since we heard anything about their major East London JV with a major landowner. I could go on...

Yes, I am struggling to understand why TEF decided that they could expect to receive consent for a scheme with less than 50% of affordable housing. They must have looked at this in considerable detail and received professional advice. As to Rapper's question, I am not convinced that this rather painful scheme translates that directly into a hit on the share price. It is only one of many schemes, a number of them very complex - e.g. Chrisp Street.

For all the current problems, I regard the shares at this level as a great buying opportunity and I am adding as many as I can at the current pricing. Whether that is sensible or not will become clear over the next few years. It isn't doing me any favours at the moment in the Strictly Bricks competition.

TEF know this market inside out, so you have to say that if they did not factor in the required high level of affordable housing for Cambridge Heath Road, then that was a serious mistake. Possible, but rather unlikely. More probably, they underestimated the time and cost that it would take to sort the detail out for a viable scheme. Unfortunately, that is very costly. They could appeal, but that is not their modus operandi and the inevitable delay and cost means that even an eventual win is somewhat academic. An expensive lesson learnt.

Sain,

TfL is perennially cash strapped and looking to sweat its assets (property). As a creature of Statute, that is a real challenge, as there are numerous restrictions - start with the 1999 Greater London Authority Act and keep going until you lose the will to live - on what it can do to realise those assets. It is very hard work.
I think that TfL wanted a JV partner with a fair amount of financial muscle who could inject cash, as well as develop schemes. Grainger fit that bill to a tee, although my limited understanding is that they rely very heavily on third parties to build out their projects, so they are a very different animal to TEF.

I see that Greystar were one of the shortlisted parties and I guess that TEF may have had a subsidiary role as part of the supply chain, particularly as TfL have significant land holdings at Nine Elms. It is not beyond the bounds of possibility that Grainger might team up with TEF on one or more of the TfL schemes, although that is an outside bet, in my view. There is a lot else to go for. Anyone interested in the overall BTR sector could do worse than look at the Grainger recent reports and presentations on this market. They are a serious player.