Member Info for luck-will-change

Thanks for the info. Have chased IG - apparently they are having reconciliation issues…..

Have these as a result of original holding

I have DCUs with IG, who have yet to post the March payment. Can someone who has received their payment let me know what amount per DCU is being paid out this time?

Interesting shareholder percentages - a vote to delist requires a special resolution, ie 75% of those voting (either by proxy or in person) at the EGM. With 50% of the shares in private investors hands, it only takes half of these to vote against and the resolution will not go through.
This is not a done deal yet - if you want to stop it, make sure you vote your shareholding……

Voted No (800k shares)

Gazelleman
Just to throw another variable into the mix - although Vairo and Spark are private companies, should either wish to become listed in addition to having an interest in acquiring HUR, a route to do this could be the purchase of HUR and then to reverse into it. A listing itself has value, as it costs to achieve one.

I think CF73’s view that loan interest conversion is a positive sign is justified - the majority of loan providers are insiders, thus restricted in their ability to convert and then flip the converted shares, thus the 30% discount on conversion can’t be realised in the short term ( and is also somewhat less than 30% giving the significant bid offer spread on this stock). If insiders believed there was little chance of future share value, they would not be converting (loan interest ranks above shareholders in a liquidation) - I see the conversion by insiders as an endorsement of the companies future.

…. unwinding some of the discount that was previously applied to the cash in the company. This reflects in the share price running up to the ex Dix date, so the drop in share price at ex div date (which equals the div to be paid out) is from a higher share price that it would have been had a distribution not been announced and paid.

As already noted by many other posters, the share price will drop by the dividend value when the share goes ex div., and it is completely logical that it will, as either side of the ex div date shareholders have the same value - all that happens is that some of the share value pre ex div date becomes cash after the ex div date.

The investment point about companies making a distribution is that the market (ie all shareholders collectively) apply a discount to cash that is locked into a company thus not valuing it at full value when assessing a companies value - again quite logically as although the cash is there, shareholders can’t get their hands on it. The ‘value’ impact of a company making a distribution is to make that cash available to shareholders, thereby unwiding

The board may only work on weekdays, and the ‘week-end’ post has yet to be opened…….

Just to expand on Simples post re 12p bid and a post bid market price of 13p - Take- over Panel rules require a bidder to pay the highest price paid in the market for the targets shares in the previous 12 months. Thus, provided the bidder does not buy shares in the market at the higher price, the bidder would not be required to pay more than the price bid.

In reality, the probability of a higher than bid price in the market post bids received in the situation where a company has formally invited bid is extremely low. What would be expected is that the market price will move to the point a little lower than the bid price - this discount reflecting the risk discount that the bid does not actually go through to completion. Remember that the bid completion will be many weeks after any bid is accepted. This discount then will narrow over time as the bid completion progresses, and the risk of the deal failing diminishes.

Higher than bid market prices post bid only occur in ‘surprise bid’ situations, usually following target boards rejection, where the market then expects either an upwardly revised bid or the emergence of an alternative bidder.

Senseman - all good points. Like you, before the CA call for an EGM dropped, I didn’t entertain the thought that CA might vote against a shareholder distribution proposal either - after all, a distribution goes part way towards their stated objective to ‘monetise their shareholding’ in the short term. However, their EGM proposal seems to be (at least in part) a reversal of that previous objective - it involves both a longer term involvement and capital raising, so that now leaves me wondering. Have CA’s objectives changed? Or have they not, and the purpose of the EGM proposal is merely to encourage bidders this week? It boils down to what CA’s actual objectives are, and what these are now I really don’t know. My guess on this is as good (or bad!) as any other shareholder’s guess would be - we will get more clues on this soon enough when we learn which way they vote …..

Mrmouse - that would raise the same amount of cash for the selling shareholder, but is a shareholder distribution is made the otherwise selling shareholder would still be entitled to 8/8ths his percentage of the company and thus its future revenue and profits. If he sells 3/8ths of his shareholding, he will only be entitled to 5/8ths of his original percentage of the company going forward

The outcome of voting is based on the percentages of votes cast (both in person and by proxy) at the meeting, not by reference to the total number of shares issued by the company.

Senseman - the Capital Reconstruction issue ((ie the important one in order to create distributable reserves) requires a special resolution, and as such a 75% vote. Failure to get to this level kills the whole concept of a distribution to shareholders completely.

As I see it, what matters is CA’s motives and intentions on this, as the way CA votes on this will determine the outcome. If CA votes their 29% against, a 75% majority is impossible. If CA vote for, as remaining shareholders are generally (tax issues excepted) in favour of a shareholder distribution, it will almost certainly achieve a 75% vote in favour.

So which way do we think CA is going to vote?. If the objective of their pre-Christmas EGM call for board replacement and an apparent change of corporate direction was primarily to flush out bids this week, and that succeeds to the point of an acceptable (to BoD and shareholders) bid being received, then the vote on the capital reconstruction becomes academic. If no acceptable bid is received, and CA really do want to ‘monetise their shareholding’ then it is probably in their interests to vote for. If CA does indeed prefer the option they have tabled pre Christmas, they will almost certainly vote against the capital reorganisation, and thus prevent a shareholder distribution. This will be in their interests as their proposal involves raising further capital (€300m) - with that in mind it would be illogical to also be supporting the concept of making a shareholder distribution from available funds now. Also, in the absence of an acceptable bid, and CA potentially wanting to progress the HUR expansion plan they have put forward, it would be completely logical for them to kill off the only other palatable (to other shareholders) plan.

I do appreciate your very laudable (and successful) efforts to drum up support for a yes vote, but the reality of the situation is that it isn’t going to make any difference - the only factor that will is the way CA choose or vote on this one, and that will depend (in the absence of the emergence of an acceptable bid) on whether they really do want to progress their alternative proposal in favour of ‘monetising their shareholding’ in the short term

asimpleinvestor - ‘CA’s shareholding can’t vote down any proposal put forward as they own 29% not 51%’

Sadly, this is not the case - many of the more significant company resolutions require a special majority (75%) rather than a mere simple majority, thus CA with their 29%, whilst single-handedly can’t carry a special majority vote, they are in a position to single-handedly block a special resolution. The upcoming EGM vote on capital reconstruction is classified as a capital reduction, thus requiring a special resolution - indeed the voting papers circulated to shareholders highlight this.

Hence my point that CA is in a position block this proposal if it so chooses - let’s all hope that CA’s interests are aligned with the remaining 71% of shareholders. Their EGM call just prior to Christmas to present an alternative proposal leaves me wondering just how aligned with all other shareholders CA’s interests actually are over the present boards proposal to effect a capital reorganisation in order to permit a shareholder distribution - we will find out soon enough…..!

asimpleinvestor - I have re-read your second paragraph. I am not so sure that would indeed put a spanner in the works. What that would do is present a direct choice of two (out of the three) alternatives to shareholders, with the third alternative being the default if both of the presented choices were voted down by shareholders.

At the end of the day, we are still in the position that three shareholders hold more than 50% of the shares, thus these three will determine the direction the company goes. In fact it is even more concentrated than 3 shareholders, as such issues require a special majority (75%) vote, CA’s shareholding alone can vote down any proposal put forward.

asimpleinvestor - sorry, wasn’t trying to be pedantic, only trying to add to the sum of our collective knowledge.

There is another timing possibility, which I can’t believe HUR would choose unless there is desperation to extent elapsed time as far as possible. HUR could completely ignore the shareholder calling of an EGM. The EGM will still go ahead, controlled by shareholders rather than the company, but only after 3 months from the date the EGM is called.

Whitehat - as you quite rightly point out, the fundamental requirement to make any distribution to shareholders is money in the bank - in our case currently circ $90m. What I was seeking to expand on this the secondary, more technical issue, that a company also needs to have distributable reserves on its balance sheet. This HUR currently does not - rather than accumulated profits over past years (which would be distributable), HUR has accumulated losses over past years. These accumulated past years losses result in tax losses now available (accounting losses carried forward don’t exactly equal tax losses carried forward, but there is a close correlation). Rather than accumulated profits brought forward, HUR does have a large Share Premium Account balance, as the company has financed past operations and past losses by issuing new shares at a premium to par value. The technical issue now is that Share Premium Account reserves do not count as distributable reserves, thus on the face of it HUR would be unable to make a distribution to shareholders, regardless of the amount of coach it actually has in the bank.

However there is a way round the lack of distributable reserves problem. If: 1) shareholders agree and 2) the court approves a ‘capital reorganisation’ (which is essentially a shuffle about with the credit side of the balance sheet) some of what are currently non- distributable reserves (ie SPA) can be re-classified as distributable reserves.

This is exactly what HUR are doing, and if shareholders don’t vote in favour (and Court agrees to it), a shareholder distribution can’t go ahead.

asimpleinvestor - a few technical points on the timing of an EGM being called. A company is required to give notice of calling an EGM within 21 days (not working days) of receiving a valid notice requesting an EGM, and that notice itself has to give shareholders 21 days (not working days) notice of the EGM being held. The date the EGM is actually held needs to be within 45 days of the date the valid notice calling for an EGM was received by the company.