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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Fortune Oil | FTO | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 10.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 10.50 |
| Top Posts |
|---|
Posted at 10/4/2015 07:39 by del44 I wouldn't get too carried away exel...the whole gas sector shot up the other day with investment controls from Beijing been relaxed. Mainland investors can now invest directly in Hong Kong market.....But glad this bb is still open....nice to drop by and keep an eye on things...:-) GLA!! |
Posted at 04/3/2015 15:25 by del44 From the iii board...Many thanks for this... I was at the court case this morning. It was adjourned for lunch and was due to start again at 2.05 but sadly I cannot be there for the afternoon. Representation from FD seem professional and accommodating to the minority shareholder group who are being treated generously by the judge. At the time I left the following seemed clear. The judge whilst recognised that that Fortune did achieve the necessary vote seemed surprised as to how few minority shareholders actually voted. I believe that only 14% of minority shareholders (representing 48% of the contested shares (not the consortium shares) actually voted. Fortune Oil representatives referred to the CVR as an "embarrassment clause" , which led to a few sharp intakes of breath. The judge seemed to be suggesting that the offer of 10p was a premium to the previously traded share price. I think ultimately this is how it may end up however; • The judge seemed to be suggesting at one point that Fortune Oil were valuing the business at 10p a share and their stake in CGH at between 0 and 5p a share • She seems to be warming to the idea the CVR element was presented in a way that many shareholders may have felt that there was a realistic opportunity that they would receive 15p • She actually agreed with the investors chronicle document that 10p a share seems cheap. When I left Fortune Oil representation had not had the opportunity to reply although they seemed to be taken a back a little. I suspect in the end that the judge will allow Fortune Oil to proceed BUT she appears to be warming to the idea that all is not correct. .... .... in the end you may not agree with the action of the minority group but fair play to them for sticking up from proper values. If they succeed today and are like minded then you should join the group, you know how. By Nickname1973 |
Posted at 07/2/2015 16:58 by neptune_tad Copied from Pete44 on Interactive Investor ForumSIMON THOMPSON INVESTORS CHRONICLE THIS WEEK Quote:- The main attraction when I advised buying FTO shares was FTO's investment in China Gas. FTO owns197m shares outright & has beneficial interest in744m shares thro' a jt. venture in China Gas Group Ltd. Combined this means that FTO has an interest in 18.8% of China Gas equity. CG currently has a market value of HK$60bn or £5.1bn at current exchange rates based in stock price of HK$11.96. This means that FTO's direct investment in the company is worth £200m and its 50% share of CG Group's stake is worth a further £379m. Combined that equates to £579m or more than double FTO's market value of £259m. The book value of the investment in CG is £402m in FTO accounts or 30% less than its current open market value.. Glaring valuation anomaly, a fact that a consortium owning almost 57% of FTO issued share capital is attempting to capitalise on by launching a cash bid of 10p a share for the company. FTO's shareholders are also being given a contingent value right ( CVR ) worth 5p a share to benefit from a material share in any value realised from FTO's valuable share holding in CG within 12 months after the completion of the takeover. The CVR is payable if at least 35% of FTO's holding in CG is sold for a price in excess of HK$ 11 per share. If there was any certainty that a sell down of the CG stake would happen, then an exit price of 15p a share seems fair right now. However the minimum cash offer of 10p would be a bargain buy for the acquirer and having had a close look at the offer doc. I feel that an outright bid of 15p a share is more than reasonable, given that FTO's NAV is closer to 20p a share if the stake in CG is marked at market value ( SIT TIGHT ) |
Posted at 06/2/2015 20:55 by del44 Well this day next week we should know a little more as to the direction of FTO......If you are unsure...then selling in to the market may be the best decision...If you are holding then vote, one way or another....If the board get the 75% they need, then we will get our 10p cash and move on. The cvr, in my view, looks highly unlikely (Page 15 note 4....."the Independent Fortune Oil Directors believe that a sale of some or all of the China Gas Holdings shares is unlikely.") So the offer is 10p cash in my view. If they don't get the 75% needed, then we are in a different game and who knows where the share price will go.....so if you are nervous of this out come...then sell...The way in which the offer document is presented, allows for an offer only without the scheme, if the consortium so wish....but weather they will or not, is a gamble that may not be to many investor's liking... I remember a few years back when Sinopec/ENN made their opportunistic HK$3.50 a share bid for CGH and refused to increase their bid in the face of a group of investors holding out against their terms......They lost face as well as the bid target by not increasing the bid......and what happened to the share price of CGH after the failed attempted bid? They are currently sitting at HK$12.50 per share after a near 25% correction since late November 2014!!! |
Posted at 04/2/2015 16:43 by jacks13 alan, try Scott Harris (Investor Relations), he may be able to tell you or try the Company's registrar. |
Posted at 23/12/2014 20:24 by del44 China was promoted as a growth story but making money has been fraught with woe. Fidelity fund manager Anthony Bolton tarnished his reputation launching an investment trust that ran into losses, and China-related shares aimed at Western investors have often disappointed - ending up acquired at low points. Even Warren Buffett is getting his fingers burnt as a Chinese electrical car maker he holds - BYD Co. - has plunged 40% amid a worsening outlook for the Chinese car market.Fortune Oil (FTO) is one such example in the London market I have followed for maybe 15 years; now in its end-game. The company is UK-incorporated but operates from Hong Kong, nowadays an investment holding company with interests in oil products and urban gas supply to China. It has always appeared a good growth prospect yet the stock has traded volatile-sideways. Board members are predominantly Chinese and the two founding brothers own a controlling 51% stake. Despite there being "independent directors" such a structure has likely deterred institutional investors and broker coverage, another reason the shares have languished. The nagging worry is that while this kind of company ticks certain rules of cricket, you never know when it might throw a googly. A well-timed, if oddly-structured, buyout offer Fortune Oil - financial summary Year ended 31 Mar (no forecasts available) 2009 2010 2011 2012 2014 (15 months) Turnover (£m) 192 276 139 123 262 IFRS3 pre-tax proft (£m) 18.1 26.1 12.2 7.7 49.4 Normalised pre-tax profit (£m) 17.4 23 6.7 6.2 -16.8 Normalised earnings/share (p) 0.4 0.5 0.1 0.2 -0/6 Cash flow per share (p) 1.5 1.3 1.4 1.3 -0.2 Capital expenditure per share 1 0.7 1.6 1.1 0.4 Dividend per share (p) 0 0 0.1 0.2 2.4 Net tangible assets per share (p) 3.9 4.9 4.6 7.5 13.2 Source: Company REFS. After the non-index shares more than halved this year from 14p to a five-year low of 6.3p, a cash offer of 10p a share is proposed by Fortune Dynasty Holdings, a British Virgin Islands company owned by two Fortune directors. With 56.91% of the shares in support, only 42% of the remaining minority holders are needed to achieve the required 75% acceptance level. The news release is quite sketchy; a formal offer document is expected from 14 January, it should be possible for a potential investor to find via Google (GOOG). What raises "takeover arbitrage" interest is a potential further 50% upside to the 10p basic offer, assuming Fortune disposes of its stake in Hong Kong-listed China Gas Holdings (Fortune previously divested gas interests to). This compares with Fortune's current share price of about 9.5p. To Western eyes, the near £200 million stake is the rightful property of owners; whereas the board proposes a "contingent valuation right" to a further 5p a share assuming the volume-weighted average price achieved in CGH over a 12-month period is above HK$11. Properly, minority shareholders are entitled to whatever value is realised, hence this seems a googly. The recent chart and statistics show CGH peaking around July at $16 then falling to about $12 where they trade on a price/earnings multiple near 21 times and yield 0.9%. Such a profile may be exposed to a shift in market sentiment, say if China has problems with its soaring debt. But CGH is one of the largest city gas companies in China, well-positioned to capitalise on the trend to urbanisation and natural gas usage. Long-term it should have excellent prospects (partly why it is opportunistic to buy out Fortune Oil after the share price drop?) and at last July's prelims Fortune said: "our shareholders will continue to have good exposure to this rapidly expanding market through a company where commensurate dividend growth is anticipated." On 13 August Fortune acquired a further 13.25 million shares at HK$14.8, taking its CGH stake near 935 million or 18.6%. Note 11 to September's balance sheet cited the fair value of the stake as £201.7 million equivalent, based on the then share price of HK$12.88. Overall net assets were £360.2 million or 13.9p a share with intangibles of just £370,000. Directors changed their tune when poised to bid Then on 1 September the Chinese government hiked gas prices by 20% (effectively ending a subsidy) which has contributed to the fall in CGH's share price. The tone of Fortune's 28 November Interim Management Statement turned worrisome, saying for example that the slowdown in Chinese growth and fall in oil prices "has increased our inventory risk"... "the slowdown in the growth of China's property market will reduce the rate of gas connections and associated fees in city gas concessions"... and "as a result of the possible uneven timing of distribution of dividends received (from investee operations) Fortune Oil will require careful treasury management in order to avoid future cash shortfalls." Fair to an extent, when oil prices are plunging, but in the words of the late Mandy Rice-Davies: "They would say that, wouldn't they?" when poised to make a cash offer. What irks is seeming potential for a transfer of value in the CGH stake, to the buyout directors (if CGH shares recover). And what might happen if a conditional average share price of HK$11 is not achieved? In pricing Fortune Oil shares at about 9.5p currently, the London market ascribes no value to this proposal whereas you'd expect to see Fortune trading say at 11-12p, all-considered. The return of value from CGH is therefore a key issue which may become clearer as the shareholders' meeting approaches - on or before 28 February. Shareholders are in a hard place - but could yet exact additional value to the basic 10p/share offer Their dilemma is no rival bid being likely given the elements of corporate control; and then a de-listing in March. Yet the buyout directors must still achieve a 75% majority and minority shareholders can express their views, especially if January's offer document still begs questions. If they are left aggrieved then the buyout directors run some risk, this gets picked up online as discontent simmers, to affect their reputations longer-term. So minority shareholders are not powerless. At 9.5p, Fortune Oil is therefore a "takeover arbitrage" situation to watch, also as a test of the conduct of Chinese business (listing in London). With a low chance of the deal falling through, a 10p basic offer to conclude next March and potential further return, the risk/reward profile is interesting. |
Posted at 20/12/2014 18:16 by jacks13 Does Danny need a continuing listing for FTO? The offer RNS goes to great pains to explain why he doesn't.It gives five reasons for the Acquisition: a. '…divergence of interests among Fortune Oil Shareholders, and reduced its suitability as a listed company.' b. '...it no longer requires access to equity capital markets to sustain and grow its business. As such, there is no longer a requirement to remain listed on a public market.' c. '...a continuing downward trend in the liquidity of the Fortune Oil Shares [...], which, in addition to the reduced free-float following the disposal of the gas business [...], will continue to make it difficult for Fortune Oil to attract new institutional investors.' d. '...(the) move from a premium to a standard listing [...], it has become a less suitable investment opportunity for many of its institutional investor shareholders.' e. '...Fortune Oil's ability to realise value in the China Gas Holdings Shares it holds is therefore constrained […]. Plus this concluding remark: '...a challenging investment environment ahead for Fortune Oil Shareholders, should the Scheme not become Effective and Fortune Oil remain listed.' Points a) to d) each say either that a listing is no longer appropriate or that a listing is in some way the root cause of its languishing share price. The concluding remark seems to imply that the motivation behind the offer is to spare shareholders 'a challenging investment environment'. I find that a little hard to swallow. All in all the threat to de-list if the offer fails is implicit here to an excessive degree. Is Danny bluffing? |
Posted at 20/12/2014 13:33 by txi how many shares do institutional investors hold? for instance most of the major shareholders quoted ie Barclays and Hargreaves are holding as nominees. I therefore suspect that we small investors have the majority of the free float. How are we all going to get together to vote this proposal down. Can we get LSE involved and get a ruling of unfair practice? |
Posted at 20/12/2014 12:56 by jacks13 Alan, thanks again for your enlightening post. The institutional investors hold the whip hand here. As I see it the deterrent to a no vote is the threat that the Company is delisted leaving all shareholders with illiquid paper. The institutional holders for their part would be forced to dump their holdings as non-qualifying for next to nothing as the share would have become an over-the-counter instrument.This would however also gum up the works for Danny and prevent him making progress with his objectives, whatever they may be. It would also make him considerably poorer, at least on paper. In the circumstances I would expect the bigger investors to enter into a dialogue whereby an improved and unconditional all-cash offer is made. Pressure from private investors isn’t going to achieve much if the institutions cave in, but we should I think do what we can. |
Posted at 18/12/2014 13:14 by via con From the announcement" Developments involving Fortune Oil in recent years have resulted in a divergence of interests among Fortune Oil Shareholders, and reduced its suitability as a listed company. In particular: (a) as Fortune Oil is now primarily an investment holding company and generates its cash inflows principally from dividends from its minority equity holdings, rather than operations, it no longer requires access to equity capital markets to sustain and grow its business. As such, there is no longer a requirement to remain listed on a public market; (b) there has been a continuing downward trend in the liquidity of the Fortune Oil Shares over the past two years, which, in addition to the reduced free-float following the disposal of the gas business in October 2013, will continue to make it difficult for Fortune Oil to attract new institutional investors; (c) following the disposal of its natural gas business in October 2013, Fortune Oil has become a vehicle for a number of investments, none of which are operated or controlled by Fortune Oil; (d) since Fortune Oil's move from a premium to a standard listing on the Main Market of the London Stock Exchange in March 2013, it has become a less suitable investment opportunity for many of its institutional investor shareholders; and (e) the nature of Fortune Oil's holding of China Gas Holdings Shares is such that the ability to deal with its China Gas Holdings Shares is restricted and such dealings are only permitted in a limited number of circumstances and, in respect of a number of such shares, are subject to the consent of a third party. Fortune Oil's ability to realise value in the China Gas Holdings Shares it holds is therefore constrained. In addition, the net realisable value of the China Gas Holdings Shares held indirectly by Fortune Oil is materially impacted by the level of debt in China Gas Group. " And this bit which I feel is correct "The Independent Fortune Oil Directors believe there would be a challenging investment environment ahead for Fortune Oil Shareholders, should the Scheme not become Effective and Fortune Oil remain listed. " We may feel shafted but tbh at least most holders are or will be in profit at 10p (especially due in part to the bribe divi). So imo it could be a lot worse, and I certainly will not oppose this offer. |
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