RE: Perplexing24 Nov 2022 11:29
Back to the original DD by Trotsky. Proper DD.
Low vol good. As sellers get back IN, it should push through - as shares in demand, and required for the vote - 2 motions. IMHO
Firstly, I cannot see anywhere in the RNS the directors stating that MEAL cannot continue to trade in the event that the proposed resolution is not approved by the members (you would have thought the directors would have emphasised that eventuality, if that was indeed the case). Secondly, although the directors and their connected parties are in favour of the resolution, MEAL had only received irrevocable undertakings from 35.8% of the shareholders in favour of the resolution at the date of the announcement. Thirdly, for the resolution to carry, 75% of the shareholders (who vote) need to approve the cancellation and, even if MoveFresh was to purchase shares in the market before the vote, MoveFresh would not be able to buy enough shares to guarantee getting 75% of the vote without triggering a bid offer for MEAL (MoveFresh would have to increase its interest to over 30%) and an argument could be made that the directors and their connected parties were acting in concert to acquire MEAL if their combined interests now exceed 30%.
Bottom line, the cancellation of the shares is not a foregone conclusion if PIs choose not to vote in favour of the resolution (for a deal that seems to essentially benefit the directors down the the road - there does appear to be scope for additional funding once MEAL has been taken private) and, although M-49 has been getting some understandable flak in recent days there may actually be some method in his "madness" (the directors and their connected parties are by no means certain to carry the vote and they, via MoveFresh, are likely to need to purchase more shares in the market if they want to improve the odds of the resolution passing). If I was a holder, I would want to ponder this one a bit more before deciding whether or not to sell before the General Meeting because a listing cancellation and re-registration as a private limited company are rarely, if ever, in the best interests of PIs and is only normally the recommended course of action when a listed company is left with absolutely no other viable financial option (as I say, the directors were fairly quiescent in the annoucement on the rationale for this drastic course of action - apart from saving listing costs, which would be true for every listed company - and have left it to PIs to assume that the future is dire without actually stating that's the case).
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