Acorn Growth Share Discussion Threads

[polly65] 05/9/2016 16:48

Yogaboy,

Very insightful! Hats off to you.

Based on this information do you think there is something big brewing or do you think the placing of the 2m nominal shares would hit the price considering we are trading at 20p+?

[yogaboy] 05/9/2016 10:52

Well the market’s getting quite excited about the AGM announcement so I thought I’d take a closer look at the detail of the figures in the AGM notice. We already have good reason to believe that there’s a deal on the table, and it’s imminent. We know that the company has conditionally agreed to a subscription raising £2.48m, restated in the AGM letter.

Easy to miss on a casual reading of the AGM announcement is the reference to £2m “nominal value” shares - not £2m value - and given the nominal value of a share is 2p, that’s 100million shares. 100million shares would represent 100/114.288 or 87.5% of the issued share capital. The current 14.288million would be only 12.5% of the enlarged capital.

At the subscription price of 15p, the new shares, which would include the 16.518million announced earlier, would raise £15m rather than £2.48m.

The share price has already reacted to 20p+ so is there reason to suspect that a much bigger deal is in the mix?

[hedgehog 100] 04/9/2016 18:23

Another inpressive property example, and one from the shell-RTO realm, is 65-bagger ROE-MAR.

From the RTO (reverse takeover) of Roeford Properties (ROE) by housebuilder Mar City (MAR) in late 2010.

ROE: from the mid 2010 low of 0.235p (equivalent to 2.35p, post-consolidation) rose to 2p in late 2010 (equivalent to 20p, post-consolidation): 8.51-bagger



Notice the huge rise at the time of the RTO.

MAR: rose from 20p in late 2010 to 154p in spring 2014: 7.7-bagger



= A combined 65.53 bagger.


A large rise at the time of a RTO is commonplace, because it is the RTO which adds the real value to a shell.

Which is why the best time to buy such a share is often shortly before a RTO, or at least shortly afterwards, as the timing of the former can be difficult to determine.

But in ACO's case, there are clearly very strong indications that a RTO is about to happen here.

Not least ACO's statement in its July final results:
"Whilst we have not concluded a transaction during the year we are very hopeful of doing so in the near future."

Combined with the imminent resignation of ACO's existing directors.

[hedgehog 100] 04/9/2016 17:49

"Acorn Minerals plc was admitted to the Standard List of the LSE in October 2012, the Directors of the Company intend to pursue investment opportunities in the mining, minerals & energy sectors, with consideration given to both conventional and alternative energy projects as well as mining & energy infrastructure projects."

"The profile of the proposed target of the Company for its first acquisition has, to date, been a company, business or project in, but not limited to, the mining and minerals sectors. The board now considers it appropriate for the Company to broaden its focus to include targets in energy, infrastructure and real estate in addition to the mining and minerals sectors."


Looking at the above two statements from ACO, it's apparent that despite its name of Acorn Minerals, its remit already included the energy sector, and mining-energy infrastructure.

So the only real addition is the real estate sector.

Which raises the question, why add this sector only, and not others such as retail and technology?

The probability is that they have a specific real estate target lined up (or property as we call it in England).


Property sector shares can certainly be very good investments, and don't suffer from the mixed sentiment towards the resources sector at the moment.

NTA (Northacre) for example 70-bagged in five years, from 2p to £1.40:

[hedgehog 100] 03/9/2016 15:51

57 ACO trades yesterday, volume of 836,765 shares traded, and fifth on the top risers board (up 22.73% to 16.875p).

ACO's letter and AGM notice has clearly gone done well with investors.

"LETTER TO SHAREHOLDERS
AND NOTICE OF ANNUAL GENERAL MEETING"

"... Date: 1 September 2016

To: holders of Ordinary Shares

Dear Shareholder

I am pleased to invite you to this year’s annual general meeting (AGM). The AGM will be held at 1.00p.m. on Monday 26 September 2016 at the offices of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG. Full details of the resolutions of the meeting and how to attend are set out in the attached Notice of AGM.

This year, in addition to the resolutions that have been proposed to approve the accounts and the directors’ remuneration report; re-elect a director retiring by rotation; and reappoint the Company’s auditors and authorise the directors to fix their remuneration, the Company proposes a number of additional resolutions designed to allow the Company to broaden its strategy, as follows:

1. Sector focus and change of name

The profile of the proposed target of the Company for its first acquisition has, to date, been a company, business or project in, but not limited to, the mining and minerals sectors. The board now considers it appropriate for the Company to broaden its focus to include targets in energy, infrastructure and real estate in addition to the mining and minerals sectors. Accordingly, pursuant to Resolution 6 as set out in the Notice of AGM, it is proposed that the Company now adopt a wider sector focus, and pursuant to Resolution 7, change its name to a name that more fully and accurately reflects such broader strategy, namely “Acorn Growth plc.”

2. Share authorities

As announced by the Company on 3 August 2016, the Company has entered into subscription agreements with a number of investors pursuant to which it is proposed that 16,517,778 ordinary shares of 2p each in the capital of the Company (Ordinary Shares) be issued to such investors at 15p per share (Subscription Agreements).

The Subscription Agreements contain a number of conditions, including the passing of the necessary authorities for the issue of the Ordinary Shares to the subscribers. Accordingly, the Company proposes to obtain authority from shareholders for the directors to allot and issue the relevant Ordinary Shares pursuant to the Subscription Agreements.

In addition, it is proposed that the directors now be granted greater flexibility to allot and issue Ordinary Shares whether for working capital purposes, as consideration for any acquisition made by the Company, or otherwise.

Accordingly, pursuant to Resolutions 5 and 8 as set out in the Notice of AGM, it is proposed that the directors of the Company be given authority to allot and issue a total of £2,000,000 in nominal value of Ordinary Shares, including the Ordinary Shares to be issued pursuant to the Subscription Agreements, and pre-emption be disapplied in respect of the same amount in nominal value of Ordinary Shares, representing, assuming all such shares are issued, and taking into account the 14,288,005 Ordinary Shares in the capital of the Company currently in issue, 87.5% of the issued share capital of the Company.

Your Directors are of the opinion that all resolutions which are to be proposed at the AGM are in the best interests of the Company and its shareholders as a whole and therefore unanimously recommend that you vote in favour of the resolutions, as they intend to do in respect of their own holdings in the Company, representing approximately 11.2% of the existing issued share capital.

Yours faithfully

Anthony Brennan
Executive Chairman ..."




The passing of the AGM resolutions will fulfil the first of the conditions for the subscription, as per the 3rd. August RNS, but remember that there are also two others:

"Completion is scheduled to take place on or before 30 September 2016 or such later date as the parties may agree. On completion the existing directors will resign and be replaced by directors nominated by the investors.

Completion of the Subscriptions is conditional upon:

-- evidence satisfactory to the investors as to the passage of resolutions at a general meeting of the Company to authorise the allotment and issue of the Subscription Shares;

-- evidence satisfactory to the investors of a prospectus relating to the issue of the Subscription Shares having been approved by the FCA; and

-- aggregate subscription monies being received by of not less than GBP2,477,666.70 (such sum having been deposited prior to exchange of the subscription agreements).

Further details will be provided in due course in a shareholder circular and in the prospectus."




The prospectus and circular are still awaited, but should be imminent if the 30th. September target date is to be met.

[kemche] 02/9/2016 15:07

Over 10 times average daily volume.........

[apfindley] 02/9/2016 14:36

They're quietly buying here now They will pump this over the weekend and into next week.

[kemche] 02/9/2016 13:09

Moreover an 11.81p cash cushion should at least provide a base.

[yogaboy] 02/9/2016 13:07

It is difficult kemche, I guess we've all kicked ourselves for failing to take profits on realising with hindsight that a dramatic rise was a spike, or that lack of news allows a share price to drift back down from a position of gain.The question of tightly-held shares is interesting, because lack of liquidity can make a share less attractive for the PI. Medium to long term gains might be a good idea for the major shareholders (who might also be better informed), but the PI might wish to seek a more active investment in the shorter term. While funds are languishing in an investment promising steady gains a few years down the line, other opportunities can be missed.I guess that this isn't a spike, or at the very least it's a spike from a new base, and there is some significant upside in the next few weeks.

[kemche] 02/9/2016 12:50

yoga, that is a difficult one to call as the incumbents hold tightly and presumably so will the new arrivals. With the bulk of the 30 odd million shares tightly held there will be precious little to be had out there. Then of course it also depends on what the RTO is going to be. Those that are subscribing at 15p are presumably not chumps. That is all IMHO etc but let's see. Not long to wait in the greater scheme of things.

[yogaboy] 02/9/2016 12:40

Indeed, and that's without news of the deal itself.Decisions, decisions...Time to start focusing on the exit strategy. It's relatively easy to pick a share that's going to leap, but deciding how and when to sell is the hard part. Temptation and the lure of higher gains can get in the way of rational decision-making.The gain for PIs here might be entirely in the market reaction to news, rather than the long term fortunes of the company as an investment fund ("Acorn Growth PLC"). Once the news subsides, the share price might just drift south again. I find the "sell half when the price doubles" approach very appealing, and with an entry price barely in double figures, that might not be far off for me.Any other comments on exit strategy from those who spend more time with RTOs / shells?

[kemche] 02/9/2016 12:31

Post fundraising cash should be £3.64m with 30.806m shares in issue giving circa 11.81p cash per share. So circa 3.5p premium for any RTO plan.

[kemche] 02/9/2016 11:22

Not much stock around.......

[yogaboy] 02/9/2016 10:11

Interesting, the target will not be in ACO's sector - that's not surprising as after all it's just a shell to be RTO'd by the "unconnected investors".

The new investors only get half ACO so it's not really an RTO, more a repositioning as a portfolio company.

Still pleased to be in and awaiting news.

[hedgehog 100] 01/9/2016 21:04

Thanks Polly.

The share trading activity I see as positive, and I'm confident that things are progressing positively behind the scenes.

I was expecting the AGM notice because I believe it has to be held by 30th. September with three weeks notice.

But I await the AGM resolutions.

[polly65] 01/9/2016 19:25

Hedgehog 100,

You seem to have hit the nail on the head with both the timings. What is your take on todays activity and the RNS?

[hedgehog 100] 01/9/2016 18:32

01/09/2016 16:55 UKREG Acorn Minerals PLC Notice of AGM

"Copies of the Annual Report and Accounts for the year ended 31 March 2016 and the Notice of Annual General Meeting ("AGM") were posted to shareholders today.

The AGM is to be held at 16 Great Queen Street, London WC2B 5DG at 1.00pm on Monday, 26 September 2016.

A copy of the Annual Report and Accounts together with the AGM notice will be submitted to the National Storage Mechanism and made available from the Company's website at hxxp://www.acornminerals.com

For further information, please contact:

Acorn Minerals Plc Registered office number: 01274 962560

Nigel Brent Fitzpatrick, Director hxxp://www.acornminerals.com"




I think that the AGM had to be held by 30th. September (i.e. within 6 months of the company's year end).

But is this the GM referred to in ACO's 3rd. August RNS, or will that be later?

There's no further mention so far of the shareholder circular and prospectus that are awaited, but I haven't yet seen the AGM notice - there's nothing yet on ACO's website.

[yogaboy] 01/9/2016 17:36

...and 20 minutes later, the AGM date is announced! All coming together nicely here.

[hedgehog 100] 01/9/2016 16:35

ACO figures for number of trades per month:

August 2015: 13
September 2015: 5
October 2015: 3
November 2015: 16
December 2015: 6
January 2016: 2
February 2016: 3
March 2016: 5
April 2016: 3
May 2016: 5
June 2016: 281
July 2016: 84
August 2016: 126



And a busy start to September, with 18 trades today, on a rising s.p.

ACO's rise to its new base level of 13.5 - 14p has now been maintained for a few weeks, which is very different from previous short and spark spikes.

This all bodes well for positive newsflow this month, and I would anticipate news in the next week or so.

[hedgehog 100] 22/8/2016 14:13

Suspension of trading isn't necessary if announcement of the RTO is accompanied by an admission document.

EVRH & CPT for example recently followed this approach.

This seems to be the approach that ACO are following.

[polly65] 22/8/2016 10:13

kvt123,

Thank you for the response.

Supposing the timeline you suggested pans out accurately, how long do you think the BoD will give for the suspension considering that the RNS regarding the new 52% allocation was three weeks ago?

[polly65] 20/8/2016 21:41

Apologies for the repetition

[polly65] 20/8/2016 21:39

Any idea when the AGM would be? According to investors chronicle it was due last was due to be held on Tuesday.