Abbey Protection Share Discussion Threads

[masurenguy] 09/10/2013 10:22

DD - this bears absolutely no comparison whatsoever with the situation at Lees Food. That was a lo-ball management buyout via a third party entity that they owned. The directors paid roughly a net price of £4m, at a PER of around 6, which in my view grossly undervalued the business that was valued at about the same as it was at their IPO 5 years earlier. That was a deal for their own benefit as the new private owners.



The Abbey deal is totally different. The directors are selling to an unconnected third party and totally exiting as owners/investors. The price paid of £116.5m is more than double the valuation of £55m at the the IPO some 6 years ago. The dissatisfaction in relation to the acquisition price relates to a range of 5% - 10% - if it had been 120p/125p there would have been no complaints and even recent investors - probably less than 1% of the shareholders - would not have made a small loss.

Get real !
1. It is a slightly disappointing exit price but nobody has been "shafted" at this price !
2. Institutional shareholders - who own circa one-third of the shares, seem prepared to accept the deal.
3. There is no discounted value equation relating to some dubious MBO deal.

The exit price is marginally disappointing but to suggest that the management have behaved badly, or even in some way immorally, is totally absurd. There are quite a few examples of shareholders being ripped off by management elsewhere but this is very clearly not one of them ! To even suggest that it is will only serve to undermine credibility in addressing other situations where this is definitely the case.

[davidosh] 09/10/2013 09:48

Maz....I do not hold here. I think it only fair that shareholders are aware of other situations from the past that have not been seen as a satisfactory outcome for the independent investors.

I also note that Shore Capital were recently appointed so maybe that is the point where awareness was key. Large dominant director holdings and Shore as the advisors damaged my investment at Lees Foods IMHO and there are many others that can be found by doing a search.

[greenroom78] 09/10/2013 09:40

Mas, I don't believe it would've cost that much as they own a good chunk already. I understand that the offerer is going to want the best deal possible but it is up to management to look after shareholders. In this case I don't believe they have.

That larger volume buyer may only lose 5% but that is 5% of a large lump of cash when IMO the 115p would've been known.

I'm frustrated at losing a good investment as much as he price but no amount of justifying makes a discount acceptable IMO.

[topvest] 09/10/2013 09:35

Yes, looks like a very poor offer for a good company.

[masurenguy] 09/10/2013 09:15

DD - I already stated that only those who bought in for the very first time over the past month will make a small loss and that would probably be less than 5% for some after the dividend is taken into account.

Greenroom - the offer of a "small premium" is down to Markel, not Abbey, and at 123p the gesture would have cost them another £8m or 7%. This is the real world and an acquiror is not going to be concerned about whether investors who bought at a slightly higher price over the past month might make a very small loss. ABB could not have done anything over the past month to surpress the price without compromising the confidentiality of the proposed deal. If they had announced that they had received an undisclosed approach then the share price could quite easily have shot up to 130p/140p in anticipation resulting in a bigger loss for bandwagon traders.

I'm also disappointed with the price, which I would have liked to have seen at least 10% higher, but I don't blame management for taking the deal on the table and cashing in their chips. What would you have done in their position ?

[greenroom78] 09/10/2013 09:06

Davidosh - indeed.

And tell me the 115p wasn't being discussed on the 2nd.

[greenroom78] 09/10/2013 09:05

I'm at around breakeven. The 'shafted' part was in reference to this price being known for a while. It wouldn't have taken much to offer a small premium, even 123p so as to cover the recent buying.

I fully understand management needing an exit but to suggest 115p is best for shareholders is wrong IMO, as is the 6yr price reference you refer to and as is the mention of us keeping the dividend which is ours anyway.

Management have looked after themselves.

[davidosh] 09/10/2013 09:05

I am not so sure whoever bought these will be happy !


Masurenguy
2 Oct'13 - 15:18 - 209 of 224 0 0


Another new ATH @123.0p this afternoon. Some significant share activity today with 1.589m shares changing hands at the earlier midpoint price of 120.5p. Interim dividend of 2.4p also due next week.

[masurenguy] 09/10/2013 08:59

Shareholders have not been "shafted" here ! I doubt that Mawer take that view having only invested in January this year ! It is a rather disappointing price at a 4% discount to last nights close but probably 99% of shareholders will come out well ahead, apart from a very small loss by a few new investors who bought in for the very first time over the past month.

[davidosh] 09/10/2013 08:54

Checkout the treatment that independent and non board shareholders got at Lees Foods a couple of years ago and spot the common denominator.

Shore Capital and Corporate Ltd (Nominated adviser and broker to Abbey Protection)

[masurenguy] 09/10/2013 08:52

What an unsatisfactory deal - why are management prepared to accept an offer at a 4% discount to the average share price over the past month? With the insiders holding 57%, and the largest external shareholder Mawer holding 10%, all committed to accept this offer it looks like a done deal since one must assume that they will also have obtained an indicative agreement from a couple of the other institutional shareholders for the balance of 8% in order to gain the necessry shareholder approval.

In terms of validating the offer price, the statement in the Scheme Document that the price of 115p represents a " premium of approximately 43.8 per cent. to the average Closing Price of 80.0 pence per Abbey Protection Share between the date of admission of Abbey Protection Shares to trading on AIM ("Admission") on 29 November 2007 and 8 October 2013, being the last practicable day prior to the date of this announcement" is just crass - since when does any meaningful acquisition price reflect a comparison with an average price over a 6 year period since an original IPO ?

These would appear to be the three main motivations for the BoD accepting this offer at this point in time.

1. "after more than 20 years successfully running Abbey Protection, the team are keen to realise their investment in the business in a timely and appropriate manner

2. Markel has made it clear to the Board of Abbey Protection that it will not increase the Acquisition Price above 115 pence per Abbey Protection Share and the Board of Abbey Protection has not received any offer from any other party

3. Following the Acquisition becoming Effective, it is Markel International's intention that Chris Ward, Abbey Protection Group Managing Director, and Colin Davison, Abbey Protection Group Chief Executive, will continue to lead the Abbey Protection management team"

I don't blame management for wanting to cash in their chips and had always assumed that a takeover would be the final exit route but the price represents a rather disappointing deal given its recent level.
It would seem that no other deal was on the table at this time and therefore they were happy with 'the
bird in hand' which will net both Ward and Davison £18m each before tax. I guess that Mawer were also happy to make an 20% turn on their investment (including 9.4p in dividends) in just 9 months.

Personally I will have doubled my money (a capital gain of 67% plus a further 35% in dividends) since I first invested here some four and a half years ago so it has still been a very positive outcome. I would have looked for an exit price of perhaps 125p - 130p at this point in time but, given the inside shareholders desire to sell the company over the past year, it just boils down to the old adage that the business is worth what anyone else is prepared to pay for it at a particular moment in time !

[4wingrove] 09/10/2013 08:42

Bit of a swine isn't it usually get a bit of a premium. Shame as well as this was a good company

[4wingrove] 09/10/2013 08:42

Bit of a swine isn't it usually get a bit of a premium. Shame as well as this was a good company

[4wingrove] 09/10/2013 08:42

Bit of a swine isn't it usually get a bit of a premium. Shame as well as this was a good company

[5310carraroe] 09/10/2013 08:23

What price were you expecting

[greenroom78] 09/10/2013 07:37

Management are a bunch of c#nts then. Not the first time I've been on the back of a stitch up but usually they at least try and make out your getting a premium. Is there not a code they have to follow in doing this. People that bought yesterday are out of pocket, and as they knew about this yesterday then surely there should've been a halt?

[tmfmayn] 09/10/2013 07:33

yes you have got that right :-(

[soundbuy] 09/10/2013 07:32

Not a holder here (WAS on watchlist)but just had a gander - seems that way G78

[greenroom78] 09/10/2013 07:30

Have I got this right. We are being offered less than current market price and a price lower than the average price from recent weeks and a the promise of a dividend that by rights is already ours as it went XD weeks ago in exchange for our shares and that we are being told that it is best for shareholders?

[greenroom78] 03/10/2013 09:54

Who said it did have anything to do with it?

Yes, payment is next week not XD.

[deadly] 03/10/2013 09:51

The dividend has nothing to do with it, it went XD long ago and so has no influence on today's price.

[greenroom78] 02/10/2013 17:17

Nice breakout today ahead of the dividend. More to come hopefully.

[masurenguy] 02/10/2013 15:18

Another new ATH @123.0p this afternoon. Some significant share activity today with 1.589m shares changing hands at the earlier midpoint price of 120.5p. Interim dividend of 2.4p also due next week.

[masurenguy] 13/9/2013 17:02

Some changes in the institutional shareholding over the past 8 months. Invesco and Numis have reduced their stake below the reporting threshold and three new institutional shareholders - Murray Fairclough (6.7%), Hargreaves Hale (4.5%) and Milton Capital (4.2%) - have increased their stake above the reporting threshold. Twelve shareholders now hold 87% of the shares - see updated header.