Paul Scott of Stockopedia Small Cap Report comments15 Oct 2019 17:58
accesso Technology (LON:ACSO)
Share price: 675p (down 15% today, at 08:18)
No. shares: 27.6m
Market cap: £186.3m
Update on the formal sale process
accesso Technology Group plc (AIM: ASCO), the premier technology solutions provider to leisure, entertainment, hospitality, attractions and cultural markets, provides the following update on its announced formal sale process (the "Formal Sale Process") under the City Code on Takeovers and Mergers (the "Code").
It's clear that nobody really knows how to value this company. The share price peaked at almost 3000p in Sep 2018, valuing it then at c. £828m. It's since lost almost 78% in price. The announcement of a formal sale process starting, in Jul 2019, following a number of unsolicited bid approaches, saw the share price spike up 60%, from 690p to 1105p, and we've since seen the bid premium disappear again.
The upshot is that interested parties have not offered enough to tempt management;
The Company and its advisers have now received refreshed indications of interest from a number of the interested parties, none of which are at a level that the Board feels offers sufficient value to shareholders.
The Board and its advisers are continuing to engage in discussions with certain of these parties to determine whether an offer for the Company can be delivered at a value that the Board considers is attractive to shareholders.
The problem with this, is that the announcement today doesn't disclose what level the bid interest is at. I feel this is absolutely key information which shareholders are entitled to be told. It's not right that the Directors alone (plus presumably their advisers) know what the company is worth (i.e. what bidders were prepared to pay) but shareholders are not being told this information.
Since we have not been told what price bidding interest is at, it's virtually impossible to value this share. The fundamentals are difficult to interpret too, because so much is being capitalised into development spend on the balance sheet.
On balance, I feel that, given the length of time that the company has been up for sale, the lack of an acceptable offer feels rather bearish.
On the upside case, you can now buy the same company almost 80% cheaper than at the top of the bull market last year.
Personally, I would want to see more evidence of positive cashflows before taking an interest here.
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