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|lbo: Bad news from MME and share price falling.|
|gagarin: LBO - did you go to the EGM?If so can you tell Hindsight and I what is the story of the litigation against which the indemnity is being held and what grounds for optimism with regard to that litigation the board of IVM provided?
30m retention limited at 53m total downside is, I think you will concur, a fairly hefty amount of comfort for TWT to demand, and the vendors to agree.To balance this it is of course possible that cccl will win, and that, under the terms of the agreement the proceeds will be enjoyed not by TWT but the vendors.
Should this be the case then IVM's share price will look deeply discounted: by contrast TWT and their lawyers dont appear to be too optimistic as the deal has been constructed to keep them out of it.
I note that you now quote the figure from my post 102 of 73.5 m. - however you and I differ on how this figure is arrived at.To paraphrase the quote from the original disposal statement " The inclusion of the creator companies diluted IVM's stake to 34% of the aggregate sale consideration" - resulting in the figure of £36m (106 X 34%) stated as achieved for IVM's stake in that statement
for the 49% of the COMMERCIAL rights to cccl.By contrast you appear to arrive at the 36m by the following calculation: 106m less 30m retention, less allow for expenses say 2.5m = 73.5m X 495 = 36m.
If you did go to the EGM can you categorically confirm that the figure of 36m to IVM is AFTER holding back the retention,as you suggest, and that their stake in that retention is 49% (not 34%), since the litigation is presumably deemed to be an issue of commercial rights exploitation rather than copyright ( and therefore the liability of the creator companies as well).
I am not intending to be annoying here but merely pointing out that the worst case scenario that you detail above could actually read:
36m ( for 34% of the total aggregate consideration, and BEFORE retention) - 2m paid for TWT shares= 34m cash.
Less 49% of the limited liability of 50% of 106m = £26m. Cash received = 8M.
Even at 34% this would be 18m, leaving cash received at 16M.
I hope you can see why I would be grateful for your clarifying this issue if you did go to the EGM as it does make a difference, although perhaps I should take your advice and ring the company direct.
For the sake of argument however lets take your own worst case figures:
22.73m cash + 2m in TWT shares, plus the Medal stake at say 2m, and cash before the fountain purchase, of say 1.5m gives a total of approx. 28m , or not very different to the share price today, and very reasonable given that most investment trusts ( a similar business model on the whole),trade at a discount to NAV.
At the end of the day even your own figures leave only the following issues remaining:
1) this is a punt on a successful outcome of the litigation.(Hindsight 106 agrees)
2) How much cash will they actually end up with, and what will they do with it?
3) What will their stake of the earn out be? (49% of 1.5 - 5.5m)
To sum up I waited 5-6 months for a finite value on IVM's stake in cccl as result of this deal, and I still dont have it.|
|gagarin: LBO - I know the indemnity is in the statement, that's where I found it. I merely flagged it up because your posts made no reference to it and it leaves a rather large question mark.What it doesnt say is what IVM's share of the 30m retention is though it suggests that it is coming from the shareholders of CCCL - of which IVM had 49%, and is presumably by rata.It also says that the indemnity is limited to 50% of the total aggregate consideration which I read as being the full 106m - i.e 53million,although IVM only received 34% of this.
Worst case IVM's liability could therefore be 49% of 53 million (£ 26m), having received 34% (36m).I hope that IVM are as confident that this will not be drawn on as you, given that you are keen to brush over it.Since I am so confused perhaps you can explain to me exactly what they are indemnifying TWT against..
is it the possibility of the litigation in the US being unsuccessful and a counter claim being launched.It wouldnt be there if there wasnt a need for it.
As for the price tag from my earlier post it was not £76m, but rather more specific, with the calculation shown: the value IVM received for its 49% of complete was £36m: giving a value for the entire company of £73.47m.The retention was outside this calculation, as was any future share of the further 1.5 - 5.5 million, or of the possible litigation proceeds.The balance of the 106m I attribute to the "creator companies" the inclusion of which in the deal diluted IVM's stake to 34%. Did you anticipate this dilution at the outset?What share of the indemnity attaches to them?
re your attachments: the first three seem to back up my contention that it was never originally intended to sell Complete, or the rump of Celador as part of this deal, and they were therefore never included in the valuations bandied about in those articles. The last from the BBC clearly shows the declining revenues to which you refer, which as we know prompted the sale in the first place: neither of which I take issue with.I freely concede that articles like the first three, and others posted by you previously, may well have led me to have had an inflated view of the value of IVM's asset in Complete.In saying that I should also add that any conclusions I drew were entirely my own.
You may be right that 106M is an excellent price for the total package: all I am saying is there is more to this than the headline figure, with much remaining unresolved, on which I would like more detail, and all that matters to IVM is the 36m and the scale of its indemnities/possible upsides.If as you say anyone will tell you what a good deal this is, why has the share price done so little since?Certainly by comparison with what I, and I believe you, were hoping for.
The fact remains that we are both hoping for the same thing - a significant rise in the IVM share price: youre clearly a glass half full kind of guy, and as you can see I'm a half empty type. Though I'm certainly not selling yet.|
|hindsight: Sounds like they have no plans to return the sale proceeds, so may explain some of the share price discount
Hopefully they will invest the family silver well
"This acquisition is planned to be the first of a series of investments, which
while in some cases representing minority stakes, will in others involve 100%
acquisitions where this is considered by the board to be appropriate."
06 September 2006
6 September 2006
("IVM" or "the Company")
Purchase of Fountain Television Limited
The Company today completed the purchase of Fountain Television Limited
("Fountain"), owner and operator of the 13,000 sq. ft television studios in
Wembley, from Medal Entertainment & Media plc ("MEM") for a cash consideration
of # 1.5 million and repayment to MEM of # 5.3 million of inter-company loans.
This purchase represents a Substantial Transaction under Rule 12 of the AIM
The principal activity of Fountain is the ownership and operation of the
Fountain Television Studios in Wembley. In the year ended 31 March 2006,
Fountain achieved a turnover of approximately #3.2 million and a loss on
ordinary activities before tax of #0.4 million. At 31 March 2006, the net
assets of Fountain stood at #1,654,000.
The Directors know the business well and consider that in the near future
Fountain can be restored to profitability. Over the longer term the Directors
believe Fountain will prove a successful investment.
The funding for the Fountain acquisition was provided by secured bank borrowing
and was satisfied in full in cash at completion.
This acquisition is planned to be the first of a series of investments, which
while in some cases representing minority stakes, will in others involve 100%
acquisitions where this is considered by the board to be appropriate.
For further information, please contact:
Richard Murray, Chairman
Cameron Maxwell, Chief Executive
Tel: 0207 588 7352
E-mail: [email protected]om|
|qs9: Thanks LBO...I continue to hold a small holding....just in case I have missed something. I think there will be a timelag on the day of any announcement of a sale still between full recognition of impact of sale and share price move, lets see.....|
|gagarin: QS9 - like you I have been baffled by this one. Add in also that celador has other shows, and will also dissolve on sale of Millionaire, IVM has cash and MME stake etc.etc.and it gets stranger still.
1) Selling golden goose doesnt help future visibility.
2) Celador or complete have debts to settle from millionaire payout.Has
anyone seen their accounts?
3) IVM is seen as pet company of Richard Murray.( and Jan de MOl...without whom
the price might be lower still since he has used IVM share buying as a
hedge against a losing bid for millionaire.|
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