Member Info for Rahan

Firstly, umber of messages does not have any relationship with experience.

Secondly, your behaviour tells me that your profile is more a short.term trader rather than an "investor". If you were an investor, you would act as when you purchase a house, probably you are not looking the price of the square every minute.

If you are in, then you are in. I am an investor of this company and I have tried to provide relevant info or tried to asked relevant questions to make a decision. I think your comments on MM's buying 100 shares, 10k or whatever is your interpretation looking at the screen... is not relevant for any of the participants in this board.

Please, try to provide relevant info.

You will stress yourself if you keep looking the trades minute by minute. There is nothing that you can do right now. If you beleive in company's management and fundamentals, then you either hold your current position or build it. If you have no confidence, then it would make sense to sell and go and look for other investment.

For me the discussion is over now. I have finished building my planned position this week and I won't be following it, unless I receive a further update by meail of a new RNS.

The real discussion time regarding its fundamentals and viability, is when a the company release official information to the public, otherwise it is just wasting our time with the desired scenarios. I invested a lot of time during the release of the trading statement by the company and took a decision - Since then I have been loading as I see it undervalued and I beleive in the strategy presented by the management.

Its true that the free float is smaller now thanks to the entrance of JD, and in case there is a positive update, then there will be a fight to get FOOT shares which due to the lack of supply, the share will increase rapidly.

JD may or may not provide further updates on this movement, so don't stress yourself. And not get into discussions.

Good Luck to all - And any relevant info (with a reliable source) is more than welcome.

I think they are not going to buy the remaining 8% through one bulk purchase - instead, they are loading since last week. That is the only way I can understand the volume increase in the trades.
We come from 40,000 shares traded/day to half a million nowadays. This has to be a big player behind loading.

Forget about JD :-), does anyone think that the Family's 63% stake of FOOT, which during the IPO was worth 1.60 Pound per share, will propose a right issue at this level???

This is one of the reasons I am in, becuase inmho, I dont see how Makin Family could take a decision like this in a further detriment of the family's wealth which is already critically impacted due to the fall of share price from IPO level to the current.

There gearing level is very low, so in case they need cash they will borrow it.

Nitbhav06, I agree that JD movement may be confusing us and we are little bit overexcited.

Regarding company's profitability year, 5 years is too far, and we are talking about a very basic retailer company where there is no complex operations or investment needed to wait such period to see any profit. The profit will come if not next FY, the following one for sure. The company is already established in its segment (16-24 yrs old), the only thing is that they want to reinforce the online channel and brand, and this require 1 or 2 years of bottom line sacrifice.

1bn of Revenues in 5 years?... I think that is a very optimistic target. There is no such plan of expansion to achieve that target in the mid term as you state.

At a growth rate of +20%, with the current margins, and considering the P/E ratio of its peer (JD), the company will be worth 1.70 GBP/share in 2-3 years.

But the key question you posted is "How is foot going to finance during the next years" ... They had the IPO Cash, but will not last forever, so I am worried for that part too. I don't think they will issue shares, as the dillution at this level will undermine even more the Makin family wealth. We must remember that there wealth was 6 times higher 1 and half year ago, and that they are the first who have the intention to bring back the price of IPO level, otherwise... what a terrific way of burning the whole family wealth. So in that sense, I am confident that they will make it, the founder already created JD in the past so they have quiet big experience in this sector.

The bottom line decline is totally justified by the investment they have made for the long-term viability. Revenues are growing at a very nice rate. Once strategic investment has finished, you will see the profit again. For now, we should focus on the Sales line and the % sold through Online channel, that is the key of this company.

Remember that the IPO was made to collect cash and invest for the long-term (initial plan was to open 8 stores/year, but due to the high street retailers crisis, they have reconsidered this and now the want to re-organize & refit the current stores and invest in Online channel).

You are right saying that FOOT has his stores in front of JD, but I would say that FOOT public target is 14-24, while JD is positioned for the general public. May be JD isn't able to target effectively those youngers, and see a synergy in FOOT. I am just guessing...

I am very interested in reading official communications from both side regarding this movement.

Because this, imho, seems an hostile takeover. I think a friendly approach to overtake, meaning that contacting directly the board of foot to make an offer, would have been rejected and an announcement would have needed to made which would have resulted in an increase of share price.
If they want to take 30% of the Co. To then bid for the remaining, then the only way was to start building a significant position in silence - which worked well as in 2 days they accumulated 21% of the Co.

Inmho, they will accumulate until 29.9% to comply with the RNS communicated, but then they will consider further % and a bid price for the 70%.

6.2 ACQUISITIONS AFTER A FIRM OFFER ANNOUNCEMENT

(a) If, after an announcement made in accordance with Rule 2.7 and
before the offer closes for acceptance, an offeror or any person acting
in concert with it acquires any interest in shares at above the offer price
(being the then current value of the offer), it shall increase its offer to not
less than the highest price paid for the interest in shares so acquired.

Does this means that if JD makes an offer, they cannot offer less than 75p as this was the highest price paid by them?

From 2018 FY Annual Reporting:

NET Profit of 232 £m (which is 4.64 times FOOT Market cap.)
Debt Gearing Level 2% (which is ridiculous, meaning that they can still borrow a huge amount of millions)
NET CASH position 309.7 £m (which is 6.2 times FOOT Market Cap.)
JD Sports Market Cap. is 4622 £m compared with FOOT's 50 £m... means that JD, if they want to, they can acquire FOOT at even +100% further premium (@ £1) and still its balance sheet won't be affected that much.

So, the doubt here is not about JD's capacity to takeover this very small company, but to see what could be the alternative intentions. This is why all of us are posting a lot of scenarios here... because this movement... is veeery interesting.

Could it be that the premium has already been discounted? If we think, the trade price of 50 pence represented +100% of revaluation since its minimum level 2 weeks ago. This is my only concern, to see JD offering a ridiculous price of 50's pence for our share.... I haven't been loading and loading to only receive x2 my investment, as per my calculations, the lowest range in 3 years at current growth rate values the share at £1.60- £1.70.

This is my 6-Bagger, and I would be very dissapointed if this is sold at £0.50 or £1. I am a long-term investor.

https://www.marketscreener.com/FOOTASYLUM-PLC-38533863/company/

Need to update with the latest TR1 but you can have an idea of the structure.

I am very committed to this company as a long-term investor, but I may say that this company is not worth 2 GBP. That range above 2 GBP was an overvaluation during the IPO period. The real value of this company in 3 years is 1.50-1.60 GBP considering the current strategy and its fundamentals.

I don't think JD would pay a premium like +100% or +200% as it doesn't make sense in terms of M&A valuation. You can expecto a 20% to 40% premium over the current range at best.

In the long term, we will recoup the 1 GBP range easily in 1-2 year, and in 3 to 5 years we can see the range of the IPO, which was 1.60 to 1.80 GBP if the company's fundamentals doesn't change negatively.

... a takeover on this range. The reason is simple, they had a clause during the IPO (Nov. 2017) where they couldn't sell there shares until 1 year period time. In 1 year, this share was already in the 30's range, meaning that a fall from 1.60 GBP (IPO range) wiped almost all the wealth of the family invested in this company, so they would remain at least to recover the initial valuation level, which is 1.60 GBP.

In any case, if they are not willing to wait for the recovery of 1.60 range, they are not that stupid to sell and loose a significant amount of family's wealth to their enemy. JD Sports was founded by them, it would be humiliating if the very same company was going to kick them out of their new project and force the wipe-out of their wealth.

I am dying to read an official communication from FOOT regarding this operation from JD... which seems clearly hostile. But we are in a safe zone as they have 63% o the ownership and can protect the interest of the shareholders here.

But the article says:
"If JD Sports increased its stake to 29.9%, then JD Sports and Pentland together would collectively hold around 51.24% stake in Footasylum."
This means that the reporter is confirming that these are two different purchases. Considering current Pentland holiding of 21.34% if it was added to the planned 29.9% of JD, they would end up controlling 51.24%

Ahh!!! It is so confusing

Sorry I left the result of (57% x 21.34%) = 12.16%

12.16% + Current JD direct holding of 18.74% = 30.90%

Pentland Group PLC, the 57% owner of JD Sports Fashion PLC, has just reported 21.34% of ownership, which gives JD the equivalent of (57% x 21.34%) voting rights/ownership.

Then, remember that JD yesterday reported 18.74% of shares acquired during monday. This means that the total voting rights under JD control is 30.90%

This means... TAKEOVER!???? Bcuz as per city code of takeover they are now obliged to make a public offer for the company, am I wrong?

I would like to make the screenshot. Is it possible to check yesterday trades from LondonStockExchange official website?

I have the screenshots of the 70p and 75p transaction, but when did the 8.3m @ 50p transaction happen?
Was it a one-off transaction?

I am in with an average of mid 30's, and I am thinking and thinking... if it is a good idea to load a nice lot at current price. I would limit my average price at 40 pence after all. So... is it worth doing it right now? Or should we wait and see how further events affects the price?
Becuase the only thing here to consider is how long it will take JD Sports to make an offer once it has acquired 30% (I do not beleive that they will stop at 29.9% just as an investment, it is ridiculous to think that they will "just" invest in one of its major threat in the UK business).
Also... What is the view regarging all this movement of the Makin family? Are they happy?

Seems like a flash in the market. It has happenned in other ocassions in the big markets (S&P, DJ, Nasdaq) due to the automatic trading systems which creates flash-crashes. Why this could not be the same? Being rational, who would pay a premium of +25p when it could buy at market price of 50p?

And where are the RNS? Shouldn't an RNS be published at close market time?

Sorry to ask you but where are you seeing that 75p transactions having been trade?
I am looking through Google Finance and LSE official trade site, and I don't see any peak at that range.
I am also revising the trades between 09:00 and 10:00 when it supposed to happen, and I don't see any.
Can you please provide any proof/eevidence of that 75p that the whole chat is talking about?

P.D.: Still buying at 54p - I think today's RNS at closing will be some kind of positive for us.