Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@ denby69 "do I have an option"? SYR there are many papers written on this subject. If they take the company private, they may make 2 rounds of offers but anyone who don't want to sell with remain with shares which are non tradeable as they will be delisted. So technically there is not another way around as far as I researched DYR so see if you find any other info
@ Theosus yes, they both build and adjust their derivative positions - look to the RNS papers, some are Carlyle's and they open/ close many both long and short positions on ranges so far 1.30 - 1.28
It is not only them, but all the shareholders with derivatives. The only one I don't quite get it is LG. Given that all the holders adjust their positions in this range may indicate IMO that they would expect a firm offer otherwise IMO they would hold their existing positions.
My attention would be on Co-op's VC who may want to expand it's portfolio and do a small cap consolidation. as they already tried with TSB
@ CleverThoughts I agree with you that 2 would be a top offer if so
However the current "decline" in the SP is because there are no new money in and the transactions seem to be only closing derivative positions which are controlled not by the market expectations but by their strike price; if you look to the trading log many of them are outside the bid/offer range.
I won't expect a 2nd bidder to show its hand before a formal offer is stated and I don't expect either to be done before the due time 2nd Dec
IMO GLA
Michael Torpey seems to have jumped before pushed
"Studio Retail Group PLC - Accrington, Lancashire-based "digital value retail" - Hires Michael Torpey as independent non-executive director, starting December 1. Torpey is a former finance director who has been on a non-executive director of Metro Bank PLC since 2019."
for whom don't have s subscription I copied all the article
"The loose-money environment has driven an investment banking boom. JPMorgan last month trounced third-quarter profit expectations, reporting a 26 per cent return on equity in its investment bank and a group return of 18 per cent. JPMorgan’s market capitalisation grazed $500bn last month after doubling in barely 18 months. Bank of America, Morgan Stanley and Goldman Sachs have also thrived.
Wall Street executives know the best may be over — the exuberant bond and M&A markets will be constrained by tighter monetary policy and they may have to boost staff pay in a more inflationary environment.
Conversely, if interest rates have bottomed, retail and commercial banking should — all else being equal — be set for a rebound as the gap between the cost of funding and what they make from lending widen. In Europe, where such models dominate, that could help close a longtime valuation gap with US giants.
It is against that background that the mid-tier UK banking market is becoming the unlikely focus of interest for big-name US dealmakers, particularly private equity firms looking to deploy their plentiful “dry powder”.
Last week, Metro Bank announced it had received a takeover approach from Carlyle. A few weeks earlier, Co-op Bank — backed by JC Flowers and Bain Capital and a clutch of hedge funds — approached Spain’s Sabadell about a £1bn-plus potential purchase of its UK subsidiary TSB.
These are tiny deals for huge firms. Metro, for example, has a market cap of barely £200m. So why bother? Well, there is the appeal of cheap price tags and a core logic of arbitraging the firm’s ample cheap funding on an operation with lending margins that look set to widen.
But buyout executives will also be eyeing the consolidation opportunity of rolling up other lenders. If Carlyle did buy Metro, it could look at the Co-op and TSB, too, not to mention other mid-tier lenders. Flowers and Bain, via the Co-op, could do the same.
For a listed lender such as Metro, with capital levels stretched by thin interest rate margins and persistent losses, the prospect of a private equity capital injection resolves the Catch-22 alternative of trying to raise capital from existing shareholders at a stubbornly low valuation. Its shares currently trade 93 per cent below a March 2018 peak The pandemic has heightened the opportunity to make cost savings on branch networks in a roll-up. At Lloyds, nearly three-quarters of customers now bank online, up from less than two-thirds pre-pandemic.
There are a few examples of private equity turnrounds of troubled banks — from JC Flowers’ takeover of Japan’s Shinsei to Cerberus’s acquisition of Austria’s Bawag. But regulators have tended to be nervous of large-scale buyouts, given concerns about the potential “double leverage” stemming from private equity’s normal operating model and banks’ capital structures. Beggars, though, can’t be choosers. Both Co-op and Me
@ Ilovesushi
You made some very interesting points about the huge span weighted averages of the institutional investors and that “Maybe Carlyle will work in concert with the Columbian and Vernon to take the company private?”
Your post made me think that all the parties may want to pay minimum to the SP with a promise to have a cut in the future private co in that way they pay the minimum and benefit the max after they cut the small investors off. Very interesting point Sushi, thanks.
@dnd2136 very good point that the shorters would desperate try to drag the price down to be able to exit so we may see significant temporary drop to 2nd Dec unless another player enter.
There had been some relatively large 10-15K sales at 1.28-1.30 which I can’t find any other explanation than options – does anyone have a different assumption?
Thanks to all insightful contributions as month volatility is an amazing opportunity to recover some of the losses of people who are on high averages. On Friday was 9% volatility more than I imagined. If we keep this BB with robust assumptions we may be able to ride through without falling prey to the big boys
@investor6 Thanks for the robust argument. We agree that the offer may be 1.8-2 mostly based on the value of the customer base rathe than its future potential.
Taking it o board, given that it is so much cash looking for so few opportunities would mean that other parties would use the same logic (even with lower ratios) it may be another bidder as if the opportunity is there it won't be let to pass by another party.
If the 2nd bidder won't be there at least it would hold the SP to a higher benchmark
GLA
@ investor6 your assumptions seem to be right that the average may be in the range of 10th and the original investors may expect 5.
BUT if they don't take the offer (assuming that it may be only one maybe with a rejection and a revised offer) what alternative would they have? DF seems to be over his head, there will be losses and pain for the next 3 years
Any other rejections in the past offers were because the companies could deliver better outcome organically. Would they believe that DF could on his own return more than 3-3.5?
I am interested in your rationale why the old investors may reject a 3 offer, what better options would they have?
@Cyberdoggy you are rally self centred ha ha ha ha ha What makes you to believe that I wasn't back in first in the morning ? ha ha really you have not a single positive thought in your mind
It will be lot of ca 4% volatility in the next few weeks which I intend to play all of it
GLA
@ oilheadgame just ignore Doggy since I came on this board I haven't seen a single coherent rational thought from him. Just pointless sarcasm
I wander if those low sales may be some options securities as all the players have both short, long and options positions
So far everyone is on stand by and everyone tries to keep the price as low as possible. We have to keep our nerve and it may take some time
GLA
@ Sadanby001 please do not put words in my mouth that L&G sold their position. I asked what the paper would mean given their previous reported long position. It may be a complex option security.
Does anyone know what their disclosure paper mean rather than feeling to make pointless statements?
Could anyone understand Legal And General Invest disclosure paper? What did they do yesterday as they reported a disclosure of 2,912,648? They used to have a position of 2,979,964 in Aug.
What does the disclosure paper they just posted mean? Did they sell 50K shares in the last couple of days? Does anyone have any idea ?
@Trouts it took me some time to do research and realise that the after dividend drops are not controlled by supply and demand at all but by the market maker. So if one is in just ignore it, if one is out just exploit it.
GLA
@Sadanby001 I hope that you realise that the offer won't be dependent of the current SP so telling people to buy in these uncertain times may be unwise, however you may do whatever you think is best for you.
@oilheadgame thanks for your rationale, I calculated 1.6 at an absolutely base as the value would be only in the customer base and the fact that Dan is in bed with Clayton
I take on board 1.8 with the push from the institutions, thanks for the argument, and right 1.8-2 may be on the upper side given the circumstances even that a far value would be above 3.
Thanks, I appreciate it
Could we please please have a rational discussion about what would be a reasonable offer? Could please put your points of view across to see what forces could be in play
1. Sainsbury (loss maker as well) was offered 200Mil for 2mill customers about 100 per customer
2. S had a big brother MTRO has not. At the same ratio of 100 per customer MTRO would get a minimum offer of 230Mill which dividing by the 144mil shares would make it about £1.6 per share
3. there is value for Americans in the UK banking licence BUT MTRO has incurred a lot of loss in the last few years so would it the value of licence = cost of the debt so they could get a straight £100 per customer?
4. DF is a friend of Clayton and bought at 0.69 so for him £1.6 would be enough he may not put a fight same with the Columbian he bought at 1 so 60% is plenty for him
5. it remain only the major HF & institutions to push for a price to go up and this depends of their average holding positions
6. the only way I personally see it above 1.6 is if another bidder would get in
Could anyone please argue pro or against the above calculations/ logic as some may recover their losses not through the offer but through arbitrage on Oddey's exit