RE: Holding pattern7 Sep 2017 13:49
Hi Wicket - still fully lockedin in and loaded on PAYS - waiting for someone to launch a counter bid or for this bid to go away ( I think the sp is probably being held back by it at this stage - remember it only rose 6% on the day and that included news we were buying US entity and we had good results )
Was it this comment on ADVFN to which you refer ?
"$2.59bn - on a $3.9bn Acqn is being funded by debt + taking on the $450M Merchant Acqn Debt included - wow combined that is $3bn in Debt !! Talk about JUNK BOND status !!! SO this Baby is going to be leverage 3+ Times over equity - 75%+ value will be DEBT !!!
IF this is just an asset sweat play - Why don't our Board just borrow $2.59bn in the market - pay us shareholders a special one off dividend from the $2.59mn raised of say £4.50 and we let the residual 25% of our investment run in a massively over leveraged play and see where we are in 5 yrs time ?????
Shame on the BOD for supporting this - not good for PAYS, employees or its Shareholders - in fact there may be a case here for directors to be sued for supporting this bid (if this goes ahead) by disgruntled shareholders and employees for failing in their statutory duty to protect the rights of shareholders, employees and counterparties. The sweet deal on equity being offered seems to be clouding their judgement - and it is the independent directors that are being held out as the approvers even though we know JL and Brian ( double Barrel) M-M are the big winners - certainly would expose myself as a NED by supporting it !! "
If so the answer to your question is most definitely YES !!
- If I was a competitor I could easily say ok - lets make a counter offer of say 850p ( where Barclays said it was worth) - roughly a PE of 22 and lets say I did that as a 50% cash 50% shares - so 425p cash and balance in shares.
Next step would be to take a leaf out of BidCo book - sell Asia Gateway for the $308m ; fund the cash piece of Acqn via debt issuance ( as per BidCo) funded out of positive cashflows of PAYS itself of over $300mn a year - which would easily support borrowings of $2.5bn
Worst case scenario as a competitor is that I force BidCo to pay way more - load up on more debt and then not be in a position to fund PAYS development into the future which renders them as less of a competition - and all I had to do was put in a counter offer.
As I noted over on the other Board - If I was the counter bidder I would probably wait til just before the Court meeting to make my offer - that way it takes the wind out of bidCo sails.
As for your 3 conditions :
1. Worried - why , at worst case you are going to get 590p
2. Unsure - Sure to get 590p as a minimum
2. Confused - keep it simple - if someone else offers you more than the 590p you can accept it : )
- Be Happy - not often you get situations where there only upside !!
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