Monsoon Share Discussion Threads

[cvolbrac] 15/10/2003 13:33

Hi,

Paul Scott brought this one to my attention and I had them on my watchlist for a few weeks. I found a rabbit's foot on the way to work on Monday morning, so decided to buy 10K at 142p.

Now that the put option shenanigans is behind us we could see a decent run up to a more reasonable rating for such a successful retailer - perhaps 200p?

Chris

[kingsize] 15/10/2003 13:13

Up 17% in a day and a half and no comment here at all. Am I the only left who hasn't sold? If anyone is still here and has an idea what is going on please share!

[jeffian] 02/10/2003 09:38

Well I'm pleased to see Peter Simon is getting a good (and well-deserved) kicking in the Press today. Trust other shareholders will tough it out and call his bluff.




Regards, Ian

[bolter] 01/10/2003 10:17

Maybe Mr Simon is really bitter about his wife(ex?) and that cad Hewitt and wants to minimise the value of her stake. Bit far fetched I know but perhaps the humiliation has finally got to him.

B.

[jeffian] 01/10/2003 09:37

I'm pleased to see that those who bought the 'put options' are applying the heat to Peter Simon - "* Founder of Monsoon, Peter Simon, makes an 11th hour appeal to shareholders to back his attempt to increase his family's stake to 92.5% ahead of Friday's deadline." - after only 1m of the required 35m options have been exercised. The deadline is Friday. Stick with it, folks!

The behaviour of the controlling shareholders has been scandalous - not only have they massively underpriced the 'offer', but they've pursued it with bullying and threats to take the company down to AIM and even, subsequently, veiled hints that they will reduce or cut the divi altogether.

Any other MSN shareholders:- ignore the options! Turn up at the AGM on 9 October and tell Peter Simon exactly what you think of him!

Regards, Ian

[jeffian] 01/8/2003 17:37

Well they may have all the 'puts' they want, but will people use 'em? In anticipation that founder Tom Singh is going to put his 28% holding 'in play', comparable retailer New Look closed tonight at a new high of 315p which represents a PER of 11.3 - still not spectacular and below sector average. If you apply this modest multiple to MSN's reported earnings of 15.2p per share, fair value is somewhere North of 170p. So if you've got a 'put', sit on your hands and make the b*ggers pay more for your shares!

Regards, Ian

P.S. There's an interesting correlation between NEW/MSN. Both have founder/ceo/main shareholder, both floated minority stake, both blotted their copybooks by missing profit forecasts and had their shares severely punished, but look what happens from there. Tom Singh, whose shares were floated at 160p and languished below 50p at one stage when he could have simply taken it back private and pocketed a nice profit, got down to some hard graft, re-structured the company, released more equity, made some of his personal equity available for management incentive schemes to avoid dilution and put in a stonking performance to bring the shares back to todays 315p. By contrast, Peter Simon, who sold 25% of Monsoon in 1998 for 198p per share shortly before announcing a dramatic fall in profits after 13 years of growth, complains that he is unappreciated by the City and takes his bat & ball home at 130p per share just as it exceeds those 1998 earnings and looks to be storming ahead! Which one's the bigger man, eh?

[jeffian] 24/7/2003 19:57

From tonight's announcement it looks as if they're pretty well there (they've got put options over nearly 19% and they close the doors at 20%). Anyone have a view as to how it develops from here? The results to be announced at the end of July are known to be good as are prospects for the current year. Is this enough to support the price of an AIM-listed stock with only 7.5% free float or is it all downhill from here?

Regards, Ian

[jeffian] 23/7/2003 00:14

Couple more critical pieces in FT today.





It will be interesting to see tomorrow how many took up the 'put option' by today's first deadline. Hopefully, not enough!

Regards, Ian

[alunmorris] 17/7/2003 11:39

Ian,

Good idea. Have sent this:

"I am a private shareholder of Monsoon and am unhappy at the recent put offer by Stoneycroft. The effect of the offer is very close to a takeover at a low premium to the previous market price by the founding family and its trusts.
The intended outcome of the offer would be a free float of only 7.5% and a transfer to AIM. In this circumstance the price may well fall considerably as institutions would be unlikely to want to hold, indeed many have reluctantly already sold. There is therefore pressure on shareholders to sell now or buy and exercise the put before the first deadline of July 22. I'm sure it's no coincidence that the deadline is a week before the results, which many expect to be good.
This is very unfair on the minority shareholders and sets a bad precedent for other companies with large single shareholders.
I hope the Takeover Panel will make a policy statement and act to protect the interests of minority shareholders, if not in this case then in future cases."

[alunmorris] 17/7/2003 11:39

PS contacts page

[jeffian] 11/7/2003 23:47

Alun (and others),
Before you worry about buying puts, are you actually happy about being forced to sell at 8.66 times last year's declared earnings with current YTD turnover up 10%? If not
a) don't accept the 'offer' and
b) kick up stink!
I've written to the Chairman expressing my view and the Takeover Panel (who,apparently, "safeguard the interests of minority shareholders" - or not, as the case may be!)

What was that line from the film (Network)? "I'm as mad as hell and I'm not going to take it any more!"

Regards, Ian

[alunmorris] 11/7/2003 15:58

Anyone know for sure if I can buy puts (outside an ISA) and deliver shares in a ISA if I excercise the put?
My broker says to contact an IFA about doing this the tax implications which seems a cop out to me. I've asked them to ask the Revenue for a ruling if they don't know.
Another (non-ISA) says 'We have not received any details from the registrars for this stock. As soon as we received the details an email will be sent out to all of the Selftrade UK customers that hold the stock in the account.'

Alun

[greenslug] 09/7/2003 17:54

Lets hope they don't make the 1% by the 22nd.

[jeffian] 09/7/2003 15:46

buoycat,
I've just had a chat with Graham Frost, one of the Independent Directors who issued a statement on RNS yesterday. Whilst he is obviously constrained in what he can say (it's not a bid, after all!!!!!), in relation to your last 2 posts he told me that the Chairman and his family trusts are legally precluded from buying more shares in the market at the moment, so whoever is 'lapping up' current trades, it ain't them (which is a good thing IMHO).

Regards, Ian

[buoycat] 09/7/2003 14:31

Over 5% of the company has gone through on the sell side today.

[buoycat] 09/7/2003 14:27

With the number of sells going through at 129 over the last few days
presumably being lapped up by the family trust they won't need the put
options soon!

[jeffian] 09/7/2003 13:54

kingsize,
We small shareholders do have a defence - don't accept the 'put option'. If they don't get enough acceptances it won't happen. I haven't had the paperwork yet but when I do I certainly intend to write to the Chairman expressing my view! The silly thing about these situations is that nobody would particularly mind the 'family' sweeping up minority shareholdings if they paid a fair/realistic price; it's the attempt to do it 'on the cheap' and by an underhand method which disenfranchises shareholders and independent directors which sticks in the craw.

Regards, Ian

[kingsize] 09/7/2003 01:36

This is clearly an attempt to acquire the company on the cheap. Sorry, "acquire" is clearly not the politically correct term to use.

Naturally, as a small shareholder, I expect to be shafted (that is what I am here for); though I will make a small profit, I was here for the long term. Given the distribution of shares, nobody can come to our rescue with an alternate bid and we are lumbered with take-it-or-leave-it (and suffer the consequences).

All this is based on the assumption that the larger shareholders will act like sheep, buy and exercise their options and hand over the company for much less than it is worth - jeffian's estimate of £2 sounds about right to me. I hope I am wrong but while I am hoping I must also dodge the dung from the low-flying pigs!

[jeffian] 07/7/2003 16:09

Actually, I've just had a look again at the various announcements and it looks even stinkier.

"As this is not a formal offer for the company, the Board of Monsoon does not
intend to make a formal recommendation on the range of options offered to
shareholders by Stoneycroft."

One might wonder why go through a convoluted process of 'put' options? Perish the thought that it might be so that
1) this is not, therefore, a 'bid'
2) therefore, neither the Board, independent Directors nor Bankers need to make any comment on it and
3) we don't have to call a meeting where uppity minority shareholders might ask us difficult questions!

The last Trading Statement said that profits for the current year would not be less than £37.5m which I calculate to be Earnings Per Share of almost 15p assuming the same tax charge as last year. So the 'offer' (sorry, 'option') is around 8.7 times current earnings against a sector-average PER of 13 at which level the shares are worth nearer 2 quid.

A good deal, or what?

Regards, Ian

[jeffian] 07/7/2003 15:42

I was surprised that there was so little (none?) comment in the weekend Press. On reflection, it doesn't look the most generous of deals and yet who is going to fight the case of the minority shareholders? So far as I can see, there are no substantial holdings outside the boardroom. It's a bit of a shotgun-to-the-head approach to say "You either accept this offer or you stay locked into an unmarketable stock on the junior market with the Directors and their families holding all the rest of the shares". Surely the more honest approach would be to pay a proper premium to the minority shareholders to take it private?

I'll wait to see the documents when they appear but it'll be interesting to see what the 'independent' Directors and the bankers say about the deal.

Regards, Ian

[goliard] 04/7/2003 00:06

Completely agree buoycat. I sold at 120p last year and I cant believe that the offer is so poor. 160-170p seems much more realistic, but the problem with this stock is that so little of it is in private hands.

[buoycat] 03/7/2003 09:33

Any dividends in the period will be factored into the price that you'll finally get. In the current retail bid frenzy this offer is pretty miserable if you
ask me!

[buoycat] 03/7/2003 09:33

Any dividends in the period will be factored into the price that you'll finally get. In the current retail bid frenzy this offer is pretty miserable if you
ask me!

[buoycat] 03/7/2003 09:33

Any dividends in the period will be factored into the price that you'll finally get. In the current retail bid frenzy this offer is pretty miserable if you
ask me!