Member Info for pomander

Good for you snakes.....I have had to reduce my position down to 25,000 shares, I had 90,000 of them, decent loss for me although somewhat mitigated as a I sold 30,000 following IBM announcement at 58p. Future is interesting, co must be running low on cash, partic with £2 m debt, I wonder if a placing is on the cards. The RNS was so vague, confirmed no offer but said little else of substance. Oh well.

Agree also, seems like the company has been hawked around for a couple of months & no buyers found. As part of that process, of course prospective clients, partners etc will have learnt more abouit the business but not enough it seems to buy it. No doubt will drop today, but best to ride out and get back on a more even footing. Just the results next week to look forward to. Don't suppose the like sof Schroders will be too impressed. Cheers

Hope you are right It's fairly unusual to issue a huge profits warning and then watch your share price climb 20% in two days, albeit admittedly from low levels. I have to take the information released at face value. Back in June advisors were appointed to look into the sale of the business following approaches from potential suitors. As part of that process a Strategic Review was commenced. Again the company announced that it had received interest of an investment nature, hence it became subject to the Takeover Code. The speculative part is whether or not a bid will materialise and my view based on the evidence (delays in the Review, instituional buying etc) is that a bid is more likely than not. The £2 m write off is in some ways a red herring to the bigger issue. Any suitor will be paying £45m plus, so £ 2m is not material. We shall see in good time.

Any take out will have to be much higher than 60 p, hit 58p following IBM deal. Muted at £1.4 to £1.6 range in June/July. I think circa 75p to get support of the instituions. Why Wednesday......is that your birthday?

I agree with you, it is in nobody's interest (management, shareholders, customers) for EPO to hold back bad news. The delay to me seems more likely to facilitate good news, but before doing so all t 's must be crossed and the i's dotted. We shall see.

Whilst we stumble around in the dark, insitutional buying contnues. CIM 136,312 shares and Smith Williamson 100,000. to add to Schroders and Hawkwood's recent buying trips. How nice it must be to be able to meet face to face or pick up the phone when you own a large slice of the equity. I still fully expect a bid, I think it was planned to announce this along side the £2m bad debt as that would pale into insignificance but external pressures were such that they decided to go ahead with the trading statement which seems to have presented a great opportunity to top up holdings.

Telegraph June 29 Auction seems plausible and could offer explanation for delay......muted T/O price does however seem very rich. The FTSE 100 climbed by 1.2pc, allowing City bankers and traders to promote bullish tales, such as talk of a bid for online payment group Earthport. The rumour is that Earthport has appointed corporate financiers to work on a strategic review after the company recently received several expressions of interest from acquirers. Related Articles Heritage Oil examines options amid takeover talk Chaucer cheer on rumours of Pamplona raid Tycoon thought to be sailing into Forth Ports Rights issue rumours hit BBA, GKN and Yell Woolies at centre of fevered speculationAdvisers from Zeus Capital and Panmure Gordon are said to be working with the company on the review, which could lead to an auction of the business. Potential buyers could include companies that Earthport has existing business relationships with, such as IBM or Standard Chartered. There was also talk of interest from the Middle East. Sources claimed the company could change hands for between 140p and 160p a share – although one person familiar with the matter warned it may still be too early to put a definitive price on the company. Earthport, which declined to comment, ticked up 3¾ – almost 6pc – to 67¼p.

Clearly you were spot on about the market rumour, indeed so spot on that you even called the exact £ 2million shortfall. I of course was horribly wrong. As your call came before the RNS announcement .....how did you glean such accurate information and what's your view on next week. £2 million would wipe out last years turnover of £1.92 million.

You are half right, Schroders over the last week have purchased 852,000 shares at an average price of 43p as you say below 45p. However in 2nd part of September Schroders purchased 525,000 at an average price of 56.34 p. It is also interesting that both tranches of purchases were made prior to the expected review announcementie end Sept then pushed back to next week. Indicates to me that Schroders are positive in their views as twice they have bought ahead of the expected review announcement. One other interseting trade was a 541k sale just after the IBM deal at around 52 p by a certain Sarif Sharish which sounds like a very middle east name to me. I think revolver in the Ballroom by Mr Brough.

I guess we have the answer now, problems collecting a £2 debt from its middle east partner.

fjp73, you are correct that during the carrying out of a strategic review that their is no requiremnt to pre-announce the results of the review if they are negative. That is quite different to a profits warning which preceeds the announcement of actual results irrepective of whether a review is underway.. This situation is further complicated by the fact that the company is being treated as being in an Offer Period, that in itself places considerable retrictions on both the information and the manner in which that information can be dessiminated by the company. As for hoodwinking shareholders into accepting a lower takeover price I just can not see that at all. The company has 6 large institutional shareholders that copuld effectively block any deal. Schroders alone owns 11% and I can't see Andy taking 40p if he thinks the company is worth 60 p or whatever. My view remains that the company is completing the necessary due diligence prior to announcing an offer and that is why it is in an 'Offer Period.' The share price is driven by speculation on both the Offer Price and indeed whether an offer will be forthcoming. You pays your money and takes your choice.

I think a proits warning is highly unlikely given that the company announced yesterday that the Results for period to 30th June would be reported on the 20th Oct. By definition a profits warning preceeds the results announcement and would have been made with that announcement or earlier. So called market talk of a £2 m drop in revenues therefore also seems unlikely to me. I would interested to learn the source of this information.

Schroders have added circa 800,000 shares in the last 7 days and I see Hawkwood (6%+ holding) added 200,000 yesterday. Whilst clearly they could be wrong it seems that they fully expect a very positive announcement. It also seems to me that it is more likely that the Strategic Review announcement has been put back for positive reasons otherwise the management would look like the chumps at LLOYDS by delaying. The results are also due that week which themselves might produce a surprise to the upside. I have also been investing in CRYSTLX Solar PVCS, another of Andy's stocks, HSBC recently initiated coverage of that stock with a £1.5 price target. Might be worth a look. I also followed Andy into Inchcape after he described it as his most exciting stock on Bloomberg prior to scrappage. I am out now but doubled my money.

My view is that the cash burn is too high, even with the transaction volume increases, so further funding will be necessary before scale is reached. In todays credit enviroment, M&A is only viable option as banks are not interested. I have no idea who the suitor might be, but fully expect a takeover bid or joint venture to be announced. I hope the dealy is purely to accomodate the due dilgence and legal work. I am just very surprised that the share price has not drifted up this week.. Andy Brough at Schroders is a favorite fund manager of mine and whilst he backs some duds he is usually right. Lets keep our fingers crossed as I have been adding all week.