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Real-Time news about Abbey Protect. (London Stock Exchange): 0 recent articles
|masurenguy: A rather odd fall in the share price this morning based on a number of small transactions. As far as I'm concerned the Markel offer @115p is effectively a done deal and if by remote chance it should fall out of bed then I imagine the shareprice would go up based on current fundamentals.
I'm holding my shares until the deal is completed but in the meantime I could not resist taking an arbitrage opportunity on the lower offer price earlier by opening a spread bet.|
|cnx: from the daily mail.................
"The share price fall said it all, the company is being sold on the cheap.
Abbey Protection, the AIM-listed supplier of legal and professional fees and insurance to SMEs, lost 4.75p or 4 per cent to 115p following news of a recommended £116.5million or 115p-a-share cash offer from Markel.
The US insurer said that it had obtained irrevocable acceptances from directors and management in favour of the offer, totalling 57 per cent of the share capital, while Canadian investor and 10 per cent shareholder Mawer had also signed a letter of intent to accept the bid.
Share price fall: AIM-listed Abbey Protection is being sold on the cheap
Share price fall: AIM-listed Abbey Protection is being sold on the cheap
Sid Lall, lead fund manager at Hargreave Hale which owns 6 per cent of Abbey Protection, is livid.
'It is highly unusual to have management agreeing to a bid that is at a discount to the prevailing share price. It is selling a profitable company short and in doing so is showing a total disregard to other shareholders whose aim as always is to maximise shareholder value,' he insisted.
Abbey chairman Tony Shearer said: 'The board believes the acquisition by Markel gives Abbey an exciting opportunity to build a platform for further growth through Markel's scale and financial strength.' Maybe, but not at 115p.
The deal is still subject to shareholder approval and Hargreave Hale will be canvassing support to try to get Markel to bid the right price. That would be at least 15 per cent higher than the current offer but Markel has stated 115p is its full and final offer........................."|
|masurenguy: 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 ?|
|masurenguy: 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 !|
|masurenguy: The Tempus coverage in todays issue of The Times focuses upon the future potential expansion of Abbeys legal services that should result from the acquisition of Lewis Hymanson Small and mentions that there were some additional one-off costs in H1 relating to this acquisition and its integration into the Group.
They also refer to a reduction in contribution from Ibex, the internal Group reinsurance underwriter, resulting from claims that emanated from earlier years. This raised the combined operating ratio above
70% but this is still below the level of most other insurance companies. They also refer to the fall in investment income resulting from the ultra low interest rate environment.
They highlight the 14% increase in the interim dividend and point out that, at the current share price,
the annual yield is "approaching 5%".
|masurenguy: A little bit of momentum over the past 3 weeks with the average daily share volume more than doubling during this period and the share price gradually creeping back up toward it's closing ATH of 115p.|
|grahamburn: Well done, Masurenguy. The niggling doubts which I expressed a few weeks back about the granting of this licence have now been erased from my brain. There's every chance now that this will lead to further exponential growth in the business - and the share price!|
|masurenguy: Well it looks like the share price has now taken a breather and has got a second wind. :-).
We could see £1 very soon !|
|masurenguy: Hi Mayn - I'm sure that the recent price rally has further vindicated your investment here in addition to the consistent increase in yield over the past 3 years. In my own case that yield now constitutes circa 7%
Masurenguy - 28 Nov'11 96: Very interesting to see that ABB is the largest individual stock holding (@13%) within TMF Deputy Editors (Maynard Paton) own personal portfolio......Abbey Protection representing almost one third of his investment in individual shares.
I think that despite this recent rally, the share price still has considerable further potential to grow. With a likely eps in the region of 8p this year the current PER @94p is circa 11.7 and when you deduct free cash of circa £16m from the equation the EV/ER drops below 10. This is still quite a modest valuation when you consider that it also produces a yield at the current shareprice of circa 5.2%, if the year end dividend increases on a pro rata basis to the interim payment.
In addition to the current free cash position, the company has no debt or pension deficit and the strength and resilence of its business model has clearly been demonstrated throughout the market volatility over the past 4 years. Even the loss of a major client like Southern Cross, who went into administration last year, was quickly absorbed with the only material consequence being that it diluted the increase in profits. As the company stated at the interims: " Renewal rates for our existing scheme and affinity clients were strong and £0.75m of new business in the first half of the year has demonstrated that the pipeline remains healthy." Furthermore, as fund manager Gervais Williams stated some six months ago the price to book ratio is three, which is the second highest in the insurance sector and return on equity is nearly 27%.
Grahamburn - 19 Sep'12 138: My only niggle and concern is that the licence for new legal work seems to be taking too long and the directors comments are somewhat repetitive. Have a nagging doubt that it will materialise (ie the delays don't quite add up to usual bureaucratic rede tape). If it doesn't happen then some of the forward-looking positivity in the share price may evapourate.
I see no reason whatsoever to doubt that the company will obtain their ABS license. That will facilitate an expansion of their range of legal services, which should enable them to quickly exploit the synergies that can be utilized with their existing client base. As also stated in the interims: " we remain hopeful that the technical issues delaying the process will be resolved shortly." Having spoken to a member of their BoD recently, he reaffirmed that the delays are due to technicalities and are not related to any issues of principle.
The company has plenty of further growth potential, a very strong balance sheet and a new growth area for incremental revenue and income streams next year once the ABS license is finally granted. They have never come to market for any additional funds since the IPO and have enough free net cash available to fund any likely acquisition that may present itself in order to accelerate their legal services opportunities.
The increase in the share price continues to be restrained by relaticely low liquidity - the total annual volume of shares traded is circa 17m or 17% of the shares in issue - which is a very low ratio for a quoted business but this primarily reflects the fact that insiders and their nomad Numis collectively still hold two -thirds of the shares in issue. That of course tends to inhibit volatility both to the upside aswell as the downside.
However there is plenty of future growth potential in the share price with their existing insurance, financial and consultancy business in addition to the prospects that will materialize in legal services once the ABS license is obtained. They must also remain a potential acquisition target for a larger financial services company at some point in the future. This share remains a core stock in my portfolio and I make no apologies for my confidence and enthusiasm for it as a quality investment, now and for the future.|
Recognise your genuine enthusiasm and excitement at the relentless climb in the share price, but feel you are not only stating the obvious but also speaking to yourself. Out of the last 24 posts, only two have been by people other than yourself - and one them was me!(OK, I admit I am listening as I call in whenever there's a new post, but I too can see what is happening, and read RNS's, without being prompted.)
Perhaps there are other lurkers, but suspect you are possibly suffering from a well-known and common investor characteristic: confirmation bias.
However, having said that, all your comments are valid and long may the share price continue on its upward trajectory. This company has been ignored for far too long and deserves its day in the sun.
My only niggle and concern is that the licence for new legal work seems to be taking too long and the directors comments are somewhat repetitive. Have a nagging doubt that it will materialise (ie the delays don't quite add up to usual bureaucratic rede tape). If it doesn't happen then some of the forward-looking positivity in the share price may evapourate.
Keep up the good work, though, but perhaps moderate the number of postings about "ATH" because if the price stalls or drops back on less-than-positive news you may feel a little embarassed.|
Abbey Protection share price data is direct from the London Stock Exchange