Healthcare Locums Share Discussion Threads

[jojo_jo] 11/4/2013 11:05

Dusseldorf,
per my earlier post I will be mentioning this in my complaint to the FSA/SFO, as Jupiter is the company I originally thought collapsed the share price. However I had to revise this thought after seeing their holding had not changed. They could have done something via a 'put' or short though. That would stink somewhat.

Needs to be thoroughly investigated. It certainly pongs a bit.

IMPO/DYOR/NAI
Jo

[jojo_jo] 11/4/2013 10:59

No. Jupiter still hold according to the HLO website...

Shareholders Information

Share in issure: 847,799,742 10p Ords

Significant Shareholders:

Name Amount % Holding

Toscafund Concert Party 357,906,352 42.22%
Ares Capital Europe Limited 131,625,000 15.53%
Ares Capital Europe (Luxembourg) S.a.r.l. 125,000,000 14.74%
Jupiter Asset Management Limited 42,973,120 5.07%
Craig Tibbles 25,358,637 3.01%

Directors' Shareholdings Information:

Name Amount % Holding

Peter Sullivan, Chairman 200,000 0.02%
Stephen Burke, Chief Executive Officer 1,824,087 0.22%
Andrew McRae, Executive Director 900,000 0.11%
David Henderson, Non-executive Director 200,000 0.02%
Mark Andrews 618,055 0.07%
Sue Bygrave 0 0

The Company is aware that the number of shares not in public hands (as defined in the AIM Rules for Companies) as at 13 September 2011 is 72.73%.

[dusseldorf] 11/4/2013 10:57

xow98 - No. I did raise this to the company email address stating either they were withholding information or Jupiter has broken the legal requirement - no response.

[xow98] 11/4/2013 10:08

Did we ever get to see a Form 8 RNS from Jupiter?

[jojo_jo] 11/4/2013 09:30

The banks need HLO to trade their way through this, as do Tosca&Co. It is in all stakeholders interests. Tosca&Co have already volunteered a cash injection, and relatively little is required (perhaps £5m) to satisfy covenants. HLO have more cash than that (c.£9m at the last count). The banks would like a warrant 'sweetener', and one exercisable at 4p/5p shouldn't be a problem.

I don't know how many banks are involved, but that could be half the problem (... just one of them holding out for more).
Perhaps some would prefer the transparency/governance of a Stockmarket listing? I would if I were a bank. I wouldn't want to revert to the secret world of private ownership if I was a lender. Retaining a public listing may well be a condition for some of the loans.
HLO have a very experienced banker at the helm here, so they have the know how.

Tosca&Co have to keep control and ensure survival and recovery to get their money back. They should over time get all of it, and more. They haven't much choice, but would like full or very near to full control of the company. Minimum 85% I'd say, ideally 100%. The BOD have seen Tosca&Co's proposal, so given the time they've had the deal must be done. I can only assume this final little delay is little bits of legal smallprint the solicitors are ironing out. We all know how finnicky some of them can be, just buying a house.

We'll know soon enough.

IMPO/DYOR/NAI
Jo

[graham1ty] 11/4/2013 08:09

"Get their money back first".....if it is worth more than the debt. If it is, then there would be more than a few £m quid attributed to shareholders ( ie in the share price).

The problem is that it is almost certain;y worth LESS than the debt. If the banks want all their money back there has to be a further cash injection. Without that the banks can pull the plug.....and just see what they can get out of it, less than their loan

[xow98] 11/4/2013 08:03

Given the bank have no equity and get their money back first I would have thought there wasn't really any bargaining chip to play. Perhaps banks are looking for warrants which will give them some equity going forward in return for waiving covenants.

The update given by HLO only mentioned 2 possible periods of covenant breach.

[graham1ty] 11/4/2013 07:26

xow, think is more than just a short term funding requirement. BUT who will carry the cost ? More debt ? write off of some debt ? debt for equity swap ? or equity injection.

The banks are saying "we have put in c£60m" you do it; Tosca are saying " we have put in over £60m, you do it"

Who will blink first ? And they have been staring at each other for over three months; a record for the blinking game

[xow98] 11/4/2013 05:52

Difficult to see what the problem is. The funding requirement cannot be that great unless trading has completely tanked in the last couple of months. The company should by now know whether they have met the March covenant test that they were concerned about, so that only leaves June as a possible breach. The trading statement did not mention any other periods as potential breaches.

The net impact therefore is a short term funding requirement, to cover the period to June, which could easily have been covered by the concert party should they have wished to, failing which the banks could have agreed to a covenant waiver for the 6 month period, along with Concert Party guarantees.

[begorrah88] 11/4/2013 05:39

Gotta laugh really.I think it also rules out any offer
in excess of .54 as it appears they have struggled to
get the backing at that price.

I think we are well past brinksmanship & well into
desperation now.

[graham1ty] 10/4/2013 18:08

If negotiating with Oz banks, they will want to be tucked up in bed by 8am BST !! And will just be getting to work later this evening. It will be a long night !!

[jojo_jo] 10/4/2013 17:24

They could well be burning the midnight oil tonight. There won't be anymore extensions. That's one certainty at least.

I may complain to the take-over panel myself.

Jo.

PS. They should at least make amends by getting it out before 8am. Then again pigs could learn to fly.

[jojo_jo] 10/4/2013 17:11

I imagine they got a good rocket off the panel. Completely unprofessional!

They do effectively guarantee an offer. I can only assume they're formalising it and running it past all their solicitors, and possibly the Nomad.

Still ridiculous. They should be trying to befriend PIs, not alienating them.

IMPO/DYOR/NAI
Jo

[dusseldorf] 10/4/2013 17:08

Agree the whole deadline extension is not particularly professional, however, it does indicate to me there is 'alot' of meat to the bones of whatever is being announced tomorrow.

I would assume we are now at a stage where the RNS content exists, and it's being proof read by legal etc.. hence delay

frustrating nontheless

[graham1ty] 10/4/2013 17:02

The advisers will be getting caned by the panel for failing to keep their clients under control......

[jojo_jo] 10/4/2013 16:58

So, they're going to keep us waiting a few more hours.

I feel sorry for the directors if this is what they will have to put up with in the future. Amateur nonsense.

Jo

[graham1ty] 10/4/2013 16:47

Another extension......hope the Panel has given them a bolloc*ing.....hence extended only until tomorrow

[graham1ty] 10/4/2013 16:30

Nothing by 4.30pm......think begorrah above going to be correct. Will be statement that no firm offer has been agreed and the company will shortly issue its results, battle on and seek other funding sources. The statement could say what the current cash position is, where the framework agreements have got to, that all is not lost ....

Cannot remember by Takeover Code rules. If Tosca fail to come up with the goods today, how long before thy can make another approach ? it is something like six months if I recall....

[jojo_jo] 10/4/2013 12:10

The lack of interest is surprising. Unfashionable, specialist sector and different shareholder demographic is the explanation I suppose.

I'm increasingly concerned all this may have been stage managed from the start. There is no indication who the seller was who collapsed the share price in those first two days. Only four investors held enough stock to do the two relevant huge sells over those two days. It could however, possibly, be explained by one/two large put option transactions (which would of necessity require hedging in the 'real' market).

Of course I can't say if any existing shareholders were involved or whether it was pure speculation on the part of a trading house/broker/bank, but I'll be sending a letter to the FSA/SFO for investigation once this is all over. It was all a bit 'too convenient' for my liking.

IMPO/DYOR/NAI
Jo

[jojo_jo] 10/4/2013 11:31

Quite possible, if only to justify/recommend the offer. I bet there's a sudden, miraculous improvement in a couple of months.

We won't get the prelims until afterwards I guess. It's unlikely they'll put two such major things together in one RNS, unless they intend recommending the offer in which case they might. Alternatively we may get two RNSs today; one with the prelims the other with the offer, which could then possibly be recommended by the BOD. All very cosy and pre-arranged to the detriment of long-term PIs. However they still need to get 90% of the votes, so, to avoid a shareholder fight and the possibility of a 'white knight' charge, need to make a decent bid. A 'white knight' would probably fail, but it would serve to nullify any BOD recommendation of the Tosca&Co offer and force them into a higher bid (providing the 'white knight' was a credible, well funded buyer, ideally with experience in the sector).

All should be known by 5pm today.

IMPO/DYOR/NAI
Jo

[dusseldorf] 10/4/2013 10:01

I'm not convinced the results are going to look good - the announcement in Feb constituted a negative trading update, I guess we'll see shortly

I suspect it may be used as a "due to current negative trading, and the impact of delay in framework and in the absence of further funding the board recommends the offer of xx by Tosca et al which will ensure the future of the company etc..."

[jojo_jo] 10/4/2013 09:37

The fact that the preliminary results are due for announcement now would explain why they only had until around today to make the offer. They have clearly been able to hold the BOD off on presenting them until after the offer/bid. I doubt the Nomad would permit much further delay in presenting the prelims, so the offer deadline really must be today.

I for one would not be willing to make a decision until seeing the preliminary results and CEO/Chairman's outlook statements, etc. I'm guessing those could be quite positive, as a negative outlook would help Tosca&Co's cause.

IMPO/DYOR/NAI
Jo

[jojo_jo] 10/4/2013 09:16

Dusseldorf.
Major stakeholders (insiders) whether they be individuals or parties in concert can I understand hold up to 90% of a company at the moment. Apparently they have to conform to the 25% minimum free-float threshold by January 2014 (although there is likely to be several months 'play' in that deadline). I imagine Tosca&Co would not have much trouble getting the green light from the Nomad to increase their stake to 90% on the understanding it was temporary and would be reduced back to 75% in early 2014.
The LSE rule specifies 'free-float'. How the remaining, closely held shares are distributed amongst insiders is irrelevant.
It was just a thought/theory - and a fairly unlikely one at that.

IMPO/DYOR/NAI
Jo

PS. It looks like this is going to the wire. Announcement could be intra-day or after the close, at 4.45pm. Pointless brinkmanship - or just need the day to draft the RNS and run it past the Nomad.

[xow98] 10/4/2013 08:21

They have until 5pm

[dusseldorf] 10/4/2013 08:15

On the basis the company hasn't announced an extension, I presume we're getting something of substance today