Trojan Horse21 Dec 2022 10:00
Morning All,
What a bombshell yesterdays RNS was !
Putting the tax allowance issue to one side, WHAT was the rationale for issuing shares ?
Agree, shares should not have been issued let alone at closing price on 19th or 28.9% of newly combined company. SQZ SP just over 3 months ago stood at ~450p, so that would require an ~80% increase from here ..... deals are worked on for months in advance, why do I think our SP performed as it has over the last 3 months .... relentless falls with mini recovery, but lower lows week after week, wave after wave. Our SP has been Richarded with off the back of this deal imo from insider trading using the cover of the November EPL to push us even lower.
If all cash deal was not on the cards as a standalone deal we should of walked, we have sufficient cash and could no doubt complete RBL if required to do so, so why give 28.9% of Serica to a company that turns over $130bn, why did Mercuria want in ? Was it to share the upside or something more sinister. The one reasonable conclusion from SQZ POV is retaining the link with Mercuria as a strategic partner. OK, so that would follow it would be of mutual benefit, however a strategic partnership per se is not a legal entity, more of a you scratch my back I will scratch yours. Yes a certain amount of legal back scratching will be included within the deal, but largely not. So, on the assumption nothing sinister will occur 18 months after the deal, once lock-up and standstill restrictions have expired, one can only conclude Mercuria see massive upside in their holding. For this to happen other deals must be on the cards otherwise I don't see why Mercuria wanted this deal as is !
Mercuria will have massive clout on voting issues, something not to be underestimated which I feel our board have done. So long as we see our SP back above 450p within 18 months, then all is well afaic, as they say time will tell.
Serica has imo become a Trojan Horse for Mercuria ambitions.
aimo & dyor
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