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Highly unlikely to reach 20p
“ the Company intends to implement a discount management policy, targeting a share price discount to net asset value ("NAV") per share of no more than 15% in normal market conditions.
The Company's net asset value per Share (the "Net Asset Value per Share") is currently 20.4 pence per Share”
Eh? Are you confusing this with another share? They aren’t paying a dividend but are intending to pay back GBP65m through a tender offer subject to a vote. The price per share for the tender hasn’t been disclosed.
If DBAY wanted to extract full value they would wind use their influence on the Board and their vote to get an open offer at a price near P/TNAV of about 20p or force a wind up. I’m frankly confused why it was in their best interest to dump a portion of their holding at about 16p. If they buyback at current prices that will increase the cash per share which is good for shareholders not looking to get out. At some stage value will out here one way or the other. Those chasing a quick buck might be better off gambling elsewhere
Thanks Patshare,
Not following your workings. If the CTH holding is worth £14.8m at a 750p takeout price and you subtract the 340k fee that’s £14.46m to LDG.
I’m also not sure what you mean by the share price being worse. Surely it’s better if you are a buyer :-) Where else can you buy £1 for 70p?
I think the buying back shares well below the cash-per-share price was a good decision as it was an effective way to increase the cash per share price and it was the LDG Board’s ultimate decision, not DBAYs.
There is a limit to how much the Board can be held accountable for the share price. The market does what the market does and sometimes what it does is irrational leading to mispricing (long May that continue!)
Where I think the Board should be accountable is failing to proactively communicate the new investment case to the market and why investors should be interested above and beyond the asset backing and allay concerns about the relationship with DBay.
I think the more fundamental existential
question posed by the persistent low market price per share vs the price per share value is whether it should be listed at all. The appetite for a vehicle which has an inscrutable majority shareholder which is also making all the investment decisions is very low otherwise the share price would be close to the NAV.
I’m very tempted to go to the AGM
Patshare - where did you get your £23m from? That would mean they paid an average of 16.4p per share - which they haven’t.
Also the Caretech investment of £13.1m is likely to be worth £14.8m (with DBay taking 20% of the £1.7m uplift)
Chesterinvestor - that doesn’t tally with the reality that the SP moved up when the buyback got underway and has now dropped when the buyback finished. PI’s seem all too quick to jump to the conclusion of market manipulation when SP’s don’t move they would wish.
Fiat - it might have less cash in the bank but it improved the cash per share position which is actual what matters here and coupled with the CTH investment it will have increased its NAV compared to February so it’s in a better, not worse, position
Why? I don’t know the SP will reach that level but if it does then it will have gone from stupidly low to insanely low and will be compelling enough to go large again. My lack of comfort relates to the amount I have in and my initial intent was to sell the whole holding above >17p but it didn’t happen. Since then I’ve read and thought about the investment case and been impressed with their action re CTH so more comfortable now.