Dowgate Capital Share Discussion Threads

[mentoruk] 30/6/2009 22:00

For your information,the FSA Register notes that Neil Badger assumed responsiblity earlier this month for Compliance Oversight and as Money Laundering Officer at Dowgate Capital Stockbrokers. His predecessor (Catherine Barratt), who was listed as the Compliance Director for DCS in the plc's 2007 Accounts, no longer appears to be there.

Also, what strategy do the plc Board have if the Astaire Offer(s) do not go through? They need 4 Qualifying Executives for DCA to be an AIM Nomad - they will only have one when they part company with the 'gang of 3' (who I suspect were the same people involved in the aborted MBO discussions).

What a way to destroy the value of a business - I will be accepting the Alternative Offer unless something better comes up which looks highly unlikely
given these developments.

[lr4850] 30/6/2009 17:42

That does it! The FSA have been informed formally.

[mentoruk] 30/6/2009 17:07

I note that hidden away in the just published accounts, that Messrs Murray and Caithie are no longer Directors of Dowgate Capital Advisers and that Rawlinson had been replaced by Clive Mattock as Chairman of Dowgate Capital Stockbrokers
(all pre-dating the above Announcement).The 'Emperor with no clothes' would now appear to be friendless at Dowgate as he appears to be elsewhere in the City.

[lr4850] 30/6/2009 16:34

And there goes Rawlinson . Good RIDDANCE and to the other two going as well. All made sure they topped up their pensions and bonuses first?

[gengulphus] 29/6/2009 14:36

ranoszek,

Averaging down doesn't reduce losses. It reduces the percentage lost, but only at the cost of increasing the amount that it's a percentage of - and it really doesn't matter much whether you lose say 75% of £4k invested or 50% of £6k invested: it's a £3k loss whichever way you look at it...

It might be that a purchase now is a reasonable bargain - in particular, shares purchased now at the offer price of 6.75p would be worth about 10% more if the takeover goes through. If that were to work out, "averaging down" now would turn out to be a good idea - but if so, it's a good idea because the shares were a reasonable bargain and the resulting profit offset your loss, not because the averaging down somehow reduced your existing loss.

And just to be clear, I'm not saying that the shares are a good bargain right now. Personally, I don't reckon they are - in my view, the potential profit is too small compared with the potential loss if the takeover doesn't go through, and there is too much that might go wrong with the takeover. On the other hand, I might be biased by my experiences with this share... :-(

Gengulphus

[ranoszek] 29/6/2009 12:40

Would they do that? They wouldnt be able to help themselves to the monies thay have been so far, if they took it private?

[saddembinladen] 29/6/2009 12:28

Unless of course, DGT may tempt you with a higher offer and at the same time make the company private away from AIM.

[ranoszek] 29/6/2009 12:17

Gengulplus

Yet again, being so unselfish and clear. Thanks very much. I've had similar thoughts, but i'm in at the 20's so a lot higher than you, so i am considering averaging down to minimise my loss a bit more. In at 20's but could get to half that with averaging. It's a tough one.

Your thoughts are very clear and very helpful to me.

Thanks.

[gengulphus] 29/6/2009 09:11

lr4850,

From the RNS you quoted:

"For clarification, as stated the above figures are taken from the accounts in the case of DCS and from a proposed MBO in the case of DCA. These valuations are not connected with Blue Oar's approach and are not prepared in accordance with Rule 29 of the Code and should not be relied upon as such. Hence these valuations should not be treated as indicative of any price at which the Dowgate Board might recommend acceptance of an offer by Blue Oar, if made."

That's basically just saying that the way they prepared the valuations was not how the Takeover Code says they should be done, and that the reason for that is that they weren't done in connection with the Blue Oar/Astaire takeover approach. Also, I believe the "proposed MBO" that it mentions was superseded by Blue Oar/Astaire's approach.

It doesn't say anything about what is included in the Blue Oar/Astaire takeover approach, and as I said, it's a standard takeover approach for the entire company.

What are other shareholders contemplating??/thoughts/feelings??

I'm personally about 50% down on my purchase price at the current market price, and obviously would like to recover that and go into profit. BUT: the important question is how to go about that? Stay in and hope that (depending on the outcome of the takeover) either Dowgate or Astaire can make the money back for me? Or pull out and try to find an investment better able to do the job?

I'm pretty certain the answer is the latter - except that the takeover gives me a good chance of a quick move to only about 40% down, plus (by accepting the Alternative Offer) allowing me to effectively dispose of about 80% of my holding without any danger of moving the market price.

But while I'm definitely thinking of accepting the Alternative Offer, I don't want to do so too soon. In particular, I want to give the Dowgate board and anyone else who might be interested a chance to come up with a better offer, and if I do, I want still to be in a position to accept it (though actually, if that happens, I'll then wait and see whether Astaire improve their offer in response, etc).

Wanting to give the Dowgate board a chance to come up with a better offer is not an act of charity on my part, by the way. I'm really looking for any better offer - it's just that the Dowgate board strike me as one of the more likely candidates to come up with one...

Gengulphus

[davidosh] 28/6/2009 20:09

serratia....It may be a small holding but you will learn far more from these meetings and situations than you will from having passive investments that follow the same route without you realising and learning along the way.

[serratia] 28/6/2009 19:24

davidosh,

I am now also a small holder and live a long way from London so it would be a costly trip.I would like to know the justification for the large pension grab prior to being taken over!!

[davidosh] 28/6/2009 18:52

I do hope some of you are attending the AGM to put your questions personally. There were only four private investors at the Agm last year and one was certainly me. The drain on cash has been staggering here and this really is an example of a business where the directors and key staff have not visibly suffered but shareholders have seen their investment destroyed.

I shall be at the Agm on the 20th. The directors already know my views as I gave them clearly and honestly at the meeting last year and for those who do not think Agms are worth attending ....they certainly reduced my considerable losses as I sold 95% of my holding with weeks. They dropped almost 70% from that point at the low.

[serratia] 28/6/2009 15:53

A quick run through the annual report re salaries/bonuses/pension contributions.
In 2008 directors costs including a £125k compensation for loss of office were £1217k,this is more than double 2007 costs even if the compensation is excluded.This is due in part to a large payment (£428k) into their pension pots with the highest paid director (Rawlinson I assume) getting £396k !!!! Other emoluments and fees went up by 24% !!!!This is when Dowgate made an operating loss of £1277k !
Looking at the 5 year cumulative figures Dowgate burnt a total of £3290k at the cash flow level.In this time the directors accumulated an income of £3272k.Bonuses paid to directors were £748k and staff bonuses were £1909k over this period.
How can it be right to take out large bonuses when losing such large sums at the cash level and how can the highest paid bump up his pension fund by almost £400k last year?
As of today the market cap is around £2.5m and they have used £3.29m of cash in the last 5 years.
I think readers should watch where Rawlinson ends up and if it's a quoted company point out his performance at Dowgate.

[whitewestie] 28/6/2009 11:40

davidosh,

At last i received my hard copy of the annual report yesterday better late than never, and it states that the AGM will be on Monday 20th July at 11.30am at 46 Worship Street, London.

Gengulplus,

Thanks also for your summary of the offer from Astaire.

I received the offer documents from Astaire on Thursday and have been reading through them but i am not sure of the best avenue to take so for the moment i will sit and wait and do nothing.

Like Ir4850 i am way down on my investment but i cannot see DGT pulling me out of it but not sure about this other crowd either, article in the mail today about their £225,000 fine and fraud office still investigating the case.
That does not inspire my confidence in them, i will wait and see.

Had a quick look through the accounts but could not see any mention of bonuses being paid , but wages and salaries went up so did pension costs.
Losses after tax were 2.542m against a profit same time last year of £636m
they blame the losses on setting up the DCS broking team.
They also say the first quarter of 2009 saw a further decline in total income but since March private client trading volume has increased and they have completed a couple of broking transactions but activity and profitability levels are very depressed at present.

So not looking very good for the interim figures for the last 6 months at the end of June next week, more losses i expect.

WW

[lr4850] 28/6/2009 11:36

I am very surprised that more debate has not been generated about ASTAIRE hostile takeover. Gengulplus has produced a very informative and thought provoking post and after reading the offer document I am inclined to accept either one of the Astaire offers; especially if it ousts the DGT board rawlinson et al-

I expect that DGT will try something underhand to scupper this takeover. On initial reading the case is more convincing to go with Astaire and i am even contemplating using this opportunity to average down with the further purchase of DGT shares initially and then more astaire shares with the cash received. Things here could get very interesting, but it seems like most shareholders here have been beaten down by the poor performance and antics of DGT (where is the cash from those warrants and options in firms they act/acted for?????)

What are other shareholders contemplating??/thoughts/feelings??

[davidosh] 27/6/2009 20:30

When is the AGM ....It should have been by 3rd July as needs to be within 15 months of the last one by law I thought ?? DGT are nomads and advisors so surely they would know and abide by rules ? Shareholders must want the chance to ask a few questions ?

Why have certain key staff members and shareholders gone with Blue Oar (oooops Astaire !) if the true value is suggested by the board as follows...

"Based on the current carrying value of DCS ("Dowgate Capital Stockbrokers
Ltd") of £2.9m and the proposed buy out price of DCA ("Dowgate Capital Advisers
Ltd") of £1.5m, the value of the Group's subsidiaries, ignoring any sale
premium in the case of DCS, is £4.4m equating to just over 11p per share. This
compares with the Company's share price of 6p.

Why can the company not be broken up and bid for to extract value that way ? Look how much was paid out for DCS ? The business is not worth only a million now surely ??

[lr4850] 27/6/2009 17:46

I think this is what I had read:


22 April 2009

Dowgate Capital plc (the "Group", the "Company" or "Dowgate")

On 21 April 2009, Dowgate published its preliminary statement of results for
the year ended 31 December 2008 in which was contained the following statement:

"Based on the current carrying value of DCS ("Dowgate Capital Stockbrokers
Ltd") of £2.9m and the proposed buy out price of DCA ("Dowgate Capital Advisers
Ltd") of £1.5m, the value of the Group's subsidiaries, ignoring any sale
premium in the case of DCS, is £4.4m equating to just over 11p per share. This
compares with the Company's share price of 6p at the close of business on 20
April 2009 and following the announcement of Blue Oar's approach."

For clarification, as stated the above figures are taken from the accounts in
the case of DCS and from a proposed MBO in the case of DCA. These valuations
are not connected with Blue Oar's approach and are not prepared in accordance
with Rule 29 of the Code and should not be relied upon as such. Hence these
valuations should not be treated as indicative of any price at which the
Dowgate Board might recommend acceptance of an offer by Blue Oar, if made.

Dowgate Shareholders should take no action in relation to Blue Oar's approach
until appropriate advice is given by the Board.

[gengulphus] 27/6/2009 12:56

Looksalike Astaire going hostile and pleading to DGT pi's in their offer document. Will rawlinson survive this? What do holders think? Is it worth going with a different bunch of shiezters? ...

If that's your view of them, you presumably just want to get out and it's just a matter of which route out is better - accepting the Basic Offer and then selling the Astaire shares, accepting the Alternative Offer and then selling the Astaire shares it produces, or just selling the Dowgate shares.

Accepting the Basic Offer and selling the Astaire shares is currently worth a bit under 7.5p per share, with 3p of that subject to uncertainty about whether the offer succeeds and the rest subject to that uncertainty and also quite a lot of uncertainty about what the Astaire share price will be by the time you get them.

Accepting the Alternative Offer and selling the Astaire shares is currently worth a smaller amount under 7.5p per share, with 6p of that subject to uncertainty about whether the offer succeeds and the rest subject to that uncertainty and also quite a lot of uncertainty about what the Astaire share price will be by the time you get them (but with only 1/3rd as much of the return subject to that extra uncertainty compared with the Basic Offer).

Just selling the Dowgate shares is worth about 5.75p at present, but has the benefit of certainty about it going through once the sale has been agreed.

Personally, I reckon that accepting the Alternative Offer and selling the Astaire shares is the best of those three routes - but that decision does depend on how highly you rate certainty about getting out.

If you do decide to accept one of the offers, there is also the question of when you accept it. In general, individual shareholders probably want to wait until the offer goes unconditional or at least gets up to more than 50% acceptances, the reason being that when you accept, your shares go into escrow and you're likely to have problems about withdrawing your acceptance, as you might wish to if e.g. a better offer came along. The main exceptions to that general rule are:

* If you want to accept to increase the number of acceptances and so increase the chances of the offer going through. This is not usually at all significant for individual shareholders, as their shareholdings are such small percentages of the shares - but in this case the company is small enough that it might be an important consideration for some of the larger individual shareholders.

* Cases where waiting and watching is too much hassle and you value getting the acceptance out of the way more highly than the risk of missing out on a better offer. E.g. with the first closing date of this offer being July 15th, someone who was going on holiday for the second half of July might well reckon it was better just to accept now.

... DGT in one RNS were saying offer excluded the private broking arm. Is this correct?

No. The offer document describes a standard takeover offer, which if it succeeds fully and ends up with Astaire acquiring the remaining shares by compulsory acquisition will mean that Astaire owns all the shares and so owns the entire company.

I don't remember the RNS you describe and haven't found it in a quick look - which doesn't mean that I'm saying it doesn't exist (I haven't looked for it very hard), just that I can't confirm its existence or comment on exactly what it said. But I'm pretty certain that if it does exist, it must be about a different possible offer or be about a tentative idea that got expanded into an offer for the entire company.

Gengulphus

[lr4850] 27/6/2009 11:25

Looksalike Astaire going hostile and pleading to DGT pi's in their offer document. Will rawlinson survive this? What do holders think? Is it worth going with a different bunch of shiezters? DGT in one RNS were saying offer excluded the private broking arm. Is this correct?

[propane] 24/6/2009 22:54

no comment on this?

RNS Number : 4668U
Astaire Group Plc
24 June 2009



24 June 2009

Astaire Group PLC




Offer for Dowgate Capital PLC




Posting of Offer Document




The board of Astaire Group PLC ('Astaire') announced on 22 June 2009 an offer (the 'Offer') for the whole of the issued and to be issued share capital of Dowgate Capital PLC ('Dowgate'). The Offer Document and Form of Acceptance, which set out the full details and terms of the Offer, are today being posted to the shareholders of Dowgate.




The first closing of the Offer is at 1.00 p.m. (London time) on 15 July 2009.




If you hold your Dowgate Shares in certificated form (that is, not in CREST), to accept the Offer you should complete, sign and return the Form of Acceptance (together with your share certificate(s) and any other documents of title) as soon as possible and, in any event, so as to be received by no later than 1.00 p.m. (London time) on 15 July 2009 by Neville Registrars, Neville House, 18 Laurel Lane, Halesowen, B63 3DA. Additional Forms of Acceptance are available from Neville Registrars by telephoning 0121 585 1131.




If you hold your Dowgate Shares in uncertificated form (that is, in CREST), to accept the Offer you should follow the procedure for Electronic Acceptance through CREST so that the TTE Instruction settles as soon as possible and, in any event, no later than 1.00 p.m. (London time) on 15 July 2009. If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action as only your CREST sponsor will be able to send the necessary TTE Instructions to Euroclear in relation to your Dowgate Shares.



Copies of the Offer Document, the Form of Acceptance and other documents on display for the purposes of the Offer are available for inspection during normal business hours on any business day at the offices of Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 1AP throughout the period during which the Offer remains open for acceptance.




A copy of the Offer Document and the announcement on 22 June 2009 are available on Astaire's website at www.astairegroup.co.uk.




If the Offer is unconditional in all respects on the first closing date, being 15 July 2009, it is expected that the New Astaire Shares being issued pursuant to the Offer will be admitted to trading on AIM within 14 days thereafter and not later than 29 July 2009.




Terms used in this announcement have the same meaning given to them in the Offer Document.

[lr4850] 23/6/2009 13:32

df

My thoughts as well, but by far more eloquently put by yourself. I think DGT "management" also stinks and I would also like to question their financial honesty as its there doesn't seem to be any trace or reference to the exercising of vasts amounts of warrants in several companies theact/acted for. can we get the FSA involved?

PS Are their results also overdue?

[donaferentes] 23/6/2009 13:26

My best hope is that the DGT mgt manage to up the price a notch more, then I can sell out at a small loss - lost faith in DGT mgt (what a shambles giving their ex-so-called-mates so much of the company to walk away with for free!) and not interested in BO/Astaire who seem to me a bunch of wide boys, long on the marketing, short on the shareholder care.