Touchstone Innovations Share Discussion Threads

[p1nkfish] 27/10/2017 17:21

It's done.

[p1nkfish] 13/9/2017 07:40

Read as excellent results and IPO offer a steal at 2.2178x IPO shares per single IVO share.

IVO look more succesful so what are IPO doing wrong?

[p1nkfish] 06/9/2017 09:22

The major IVO shareholders are for the take-over but the market price action suggests the combined company will be worth no more, possibly less, than the separate entities.

Some weakness is probably down to the market and cycle of potential exits for IP, IVO, but the weakness appears to have accelerated post the proposed take-over.

Reversal is possible post acquisition but the market is voting with its feet and is often right.

Are there any adults in the room at IPO?

Thoughts?

[p1nkfish] 31/8/2017 17:29

If a group could gate crash the takeover with an IVO management backed offer it would help stir up this and ipo too. The 90% ipo have achieved is just a whisker over and a fair percentage of those are non-binding commitments.

[p1nkfish] 27/8/2017 09:32

Different all together.

[stevedevuk] 26/8/2017 23:37

I see they are up for some kind of takeover by IP Group. Share price is way down too. Wonder if it is a bargain or another disaster like Telit or Carillion.

[p1nkfish] 26/8/2017 22:10

1.3% short interest in ipo with Mangrove Partner's Master Fund open for a while.

[p1nkfish] 26/8/2017 21:39

luafc, your summary is excellent.

Indeed, the major ivo holders also holding ipo leads to a convoluted situation with the normal demand to maximise the value of the acquired company going out the window. In your CGT hypothesis there is probably a root reason/incentive.

I suspect IPO is being shorted or sold down with a knock-on to the IVO price at the conversion rate. 1p off ipo having a potentially larger impact on ivo so assisting some or other party possibly holding both ipo and ivo.

The fact this isn't a great time to list holdings, or gain exits through trsde sales at good values, isn't helping ipo and the market is anticipating increased volatility.


I also hold IPO and IVO.

It's a good learning opportunity.

[luafc] 26/8/2017 19:41

(Seems it’s just you and me for the moment p1nkfish…)

Disclosure: have holdings in both IVO and IPO – only bought IPO because felt this might offer a way to compensate for the (likely) poor share price exit price of IVO. The thinking was that if the exit price of IVO achieved were low as seems likely, then that ought to be a better long-term situation for IPO to compensate. But both these holdings are immaterial within my total portfolio anyway. I am assuming any reader of this thread is familiar with the basic merger proposals between IPO and IVO.

The main reason I’m looking at this is that this seems like an unusual situation. It intrigues me, but it is in many ways somewhat unsatisfactory.

The latest NAV in IVO was 312p on 30th June. At Friday’s (25th Aug) closing IPO share price of 117p, this values IVO at 259p or thereabouts using 2.2178 IPO shares proposed for each IVO. This is a discount to NAV of almost 17%.

Ordinarily the management of a company in the firing line would instantly dismiss such a proposal without a second thought. Indeed, the management of IVO has said the proposals undervalue the company and do not recommend acceptance. IVO shareholders have no obvious beef with IVO management.

It appears to be proceeding because the majority of the owners of IVO do not seem to care that much about the IVO exit share price. Indeed, they, through IPO and as additional holders/owners in that company, have built an upper ceiling to the IVO share price exit price proposals at 330p, yet there is no downside limit protection on IVO. With no downside limit, they seem indifferent to a low and potentially lower exit price. Theoretically, underlying investment holdings within IVO could double overnight, materially boost the NAV, and it would make no difference to the merger terms the shareholders are supporting.

So why is this?

It’s because the owners of IPO and IVO are basically the same owners. So any low IVO exit price is offset by a favourable purchase price of IVO by IPO. Those owners are looking at the aggregate position of IPO and IVO. (6 + 4 is the same as 5 + 5.)

But this is pretty shameful behaviour for 2 possible reasons:

1. Minority shareholders in IVO with no holdings in IPO are forced to give up their ownership for a material discount to NAV, and this also ignores the more mature nature of many of the holdings in IVO (compared to IPO)

2. Some of the big owners in IVO (many the same owners in IPO) participated in the last placing in IVO at a price of 425p. Is this the clue? They can presumably obtain tax relief on the IVO capital loss. If so, whilst technically not illegal I presume, would this not be morally unattractive behaviour?

I wonder whether:

A) the big owners of IPO and IVO (with reputations at stake) could be vulnerable to “aggressive tax avoidance” publicity. This seems the only possible avenue to try and address the bullying confiscation angle suffered by minority IVO holders. Remember, IVO management agree the proposals undervalue IVO

B) legislation is required to protect minorities and HMRC in a situation where merger proposals across 2 or more companies are advanced by essentially the same owners in all companies

Just thinking out loud after what seems like a dollop of unethical behaviour.

[p1nkfish] 24/8/2017 21:59

Agreed luafc but I would expect an IPO bounce after completion as Ox Nano will be less of an influence and the combined company will be impressive. There are bound to be some cost savings to garner too.

Very annoying.

[luafc] 24/8/2017 12:10

If IPO continues to fall, it seems IVO and its management are totally powerless in turn to stop the IVO share price falling away in sympathy - with the same big investors in both companies continuing to support the "merger" at roughly 2.21 IPO for 1 IVO.

Interestingly, the deal puts a cap on the upside with terms adjusted should 330p on IVO be hit, but AFAIK, there's no downside protection on IVO. One of those City skews...

The IVO NAV is currently rendered redundant and irrelevant in buttressing the share price Unsatisfactory and (surely) unfair to IVO holders.

[p1nkfish] 14/7/2017 07:43

Ivo NAV now higher than current offer and further events might straddle year end but not massive impact. Something has to move or offer could fail. Snapping up ivo below NAV would be a coup but what chance?

Big holders won't suffer (they hold both) but ipo smaller holders will be diluted further in enlarged group with higher % going to ivo. Just mht.

[p1nkfish] 12/7/2017 06:42

Big shareholders banging ivo/ipo bod heads together might help.

[luafc] 04/7/2017 12:29

AB:
SP movement is currently more outside IVO's control than ever. The same big investors in both IP Group and IVO seem largely supportive of a takeover by IP Group of IVO at 2.1575 shares in IPO for each IVO - which pretty well sets today's price (IPO currently at about 128.) Management of IVO are not supportive advising shareholders to take no action at this time citing undervaluation as one reason of concern - but their power/sway seems limited by the big investors. The way (perhaps) to protect yourself from this arguably low ball offer is to consider buying IP shares. Personally, I think IVO shareholders without compensating holdings in IPO are being taken for a journey.

[andrewbaker] 06/6/2017 15:48

This is not a short term holding, and the way things have been going, not a long term one either! If one's interested in start-ups, new businesses, technology or otherwise, I'm thinking a VCT, or an EIS portfolio would be better. At least you get tax relief on buying in, and other tax benefits whilst holding and disposing (eventually). Touchstone doesn't seem to be touching any stones of value right now. It appears more of a bet where your stake may or may not come back in full at some future date, whilst you wait for a win. I'm holding, and not folding immediately because I'm giving it more time, but my patience is not boundless.

[p1nkfish] 01/6/2017 22:54

Good companies are usually proud of their people and processes so that's understandable but the statement is weak given 3 large shareholders support IPO'S move. It reads that it comes down to money and ego no matter what they say about the portfolio.

A) What merits? He doesn't state them clearly. Alluding to them and not stating what they are is not cricket. Nil points for that. "........and because the proposal had certain merits, the Board agreed to engage." What merits? Being clear helps.

B) They want more money and keep positions at same level or higher in terms of job description and/or corporate level and same processes. "Meetings were held, but no real progress was made on two very important issues: first, on the valuation of Touchstone, and second, on the need to retain and build on the best of both companies and to establish a clear understanding of joint strategy, corporate governance and management."

I hold IPO and IVO and will vote FOR.
IPO, IVO, WPCT are all on the receiving end of less than positive market sentiment hence the valuation. IPO are being opportunistic but that's always a risk when the market has a downer on a market segment.

[pugugly] 01/6/2017 07:49

Take over rejected -

Question - Will IP group go hostile and would major shareholder support them?

[p1nkfish] 27/5/2017 01:28

Buyout in the offing and Pbb still dead.
A good sign.

[safman] 10/10/2016 13:07

Today : Monday 10 October 2016
Click Here for more Imperial Innov Charts.
TIDMIVO

RNS Number : 1365M

Imperial Innovations Group plc

10 October 2016

10 October 2016

Imperial Innovations Group plc

Portfolio company Crescendo Biologics signs collaboration and licence agreement with Takeda worth up to $790m


IVO owns around 22% of Crescendo..

saffy..

[elgordo] 19/1/2016 16:32

Covered in The Times' Tempus column today, on the back of yesterday's investment in UCL Fund. Final paragraph:

"The shares, up 10p at 370p, have taken a bit of a battering of late, for no obvious reason. I have highlighted Imperial before as an attractive long-term investment and I would do so again, although you may need to be patient."