MWB Group Share Discussion Threads

[sabre6] 09/2/2012 19:08

MWB
This looks like it has bottomed and is about to take off.

[targatarga] 04/2/2012 08:27

Markt - to be honest I was in probus from the premierland/southend days. Think I even brought some through a bucket shop[park equity]. I added a few more in the days when Aviemore was the next big thing. After that I basically wrote them off. My loss here is relatively small [4k]. Maybe if action was taken earlier regarding legal proceedings you may have got somewhere. Personal view on chasing directors is they will counter claim/pass the buck e.g powerhouse resources/meldex and polly peck. My history with property is patchy with a six figure gain on minerva and a equally large loss on quintain [mostly t trading].
MWB I look at but have never owned. They appear to be run for the managements benefit similar to saf. All imho
have a nice weekend tt

[markt] 03/2/2012 17:33

targatarga
have you tried valuing MWB recently ?

Any opinion on whether it has enough cash to survive...and enough income to pay its outgoings ?

[markt] 03/2/2012 17:23

Probus
....can I interest you in submitting a complaint to FSA and/or police ?

FSA
[e-mail]

LSE
[e-mail]

If a few of use do it, then perhaps they will investigate.

To pay 35M for land to build on....and then say that it has no permission for building and that the council will not give....imho looks like intentional theft/fraud. And they could not afford the loan, 12%. And Company Act requires prudent decisions...and to safeguard shareholders assetts.

And there should be a paper record of where the money went....so if shareholder money ended up going to the directors or connected persons....then it could be seen perhaps.

(If shareholders let directors do dodgy deals and don't say anything....then humans being humans they will probably do it)

Probus cost me maybe 12k....not very happy about it since it looks so blatantly dodgy/illegal...but I've been stung by dubious directors' deals of other cos. as well....as I am sure anyone has who has been around LSE/AIM/Plus for over a decade. ...there was one massive one for me, luckily I got out in advance of directors selling themselves probably the best bit of the company for peanuts...

[targatarga] 30/1/2012 17:00

Probus - caught me out also.. That was a long slow death...

[markt] 23/1/2012 15:27

but share price down 8% in response...as continues downward slide

Directors claimed policy is same as in 2002-2005...to return assetts to shareholders...and reduce gearing...

But imho they haven't fully followed that policy.....various new ventures started..

should they be taking on new hotels/ventures ??

Massive assetts, massive debt....tiny share price....I thought the plan was to reduce the assetts and hence the debt....so that some NAV would be produced...to increase the share price...and cheer up shareholders...

Share price has gone from 50p to 11-12p in last few months.....and down slope is quite steep !

[scburbs] 23/1/2012 09:06

It does look like positive news, although all they have done is agree to sign a lease when the development is finished. It doesn't provide any real insight on the company's finances.

[bonio10000] 23/1/2012 07:24

Interesting - the news of a new hotel does not appear to agree with the doom and gloom over the company's finances and the share price.

[markt] 14/12/2011 16:56

"The acrimonious exchanges at the AGM came to a head over questioning about high levels of interest, up 27pc, on debt refinanced earlier this year.

After initially talking about raising money to repay the most costly debt, Mr Singh admitted it was unlikely happen before January when the 27pc rate starts".


....if MWB have much debt at 27% interest rate....then they may not last long if got much of it !!
27% !...I almost can't believe it....
if it is more than say 500 pounds of debt...then it infers that the lender thinks that MWB is a terrible risk....that virtually bust.....which may be why MWB was trying to buy MBE to then make use of its assetts...

Interesting idea.
One assumes that MWB can not take MBE cash to pay its own debts since rules would I assume prohibit it (as not fair to MBE shareholders)...
but if MWB were to fold then I assume that creditors would also receive the MWB shares in MBE, ie. would control MBE. ..they could then sell control of MBE if they wanted....they would have a majority of the votes...

or maybe MWB creditors would accept the MBE shares as having some value and hence reduce the MWB debt...and maybe let MWB keep running a bit longer.

[goliard] 14/12/2011 15:50

Read the telegraph article. It is good. Note they have now withdrawn their offer.

[markt] 14/12/2011 15:08

...looking at the voting numbers
- strange to see that approx. 40% of the votes chose to abstain on a lot of items instead of voting in favour or against...seems strange (while they voted against on some items, like increasing directors pay)

- directors put forward a resolution to change the articles of assoc. to allow their renumeration to be increased...
AMAZING !
considering how much money they have lost investors that they put a resolution to allow to increase their own pay !!

---

I don't understand why the 40% ..instead of abstaining...did not choose to vote to remove a director or 2....to try to get some changes made, if not happy..

[markt] 13/12/2011 15:22

....the value in MBE for each 1 MWB share has fallen over last 3 years from 29p/share to 3p now !!

Wow, these directors sure know how to destroy value/assetts !!

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imo I doubt that Pyrro Investments will accept any MWB shares as part of any payment/offer for their MBE shares....

---

MWB
180M of debt facility now (280-100 in Nov) (previously it had around 280M and around the same in property...ie. negligible or small difference between debt and assetts)
and cap. value is ...well perhaps 5M if remove the value of the part ownership of MBE) ...peanuts compared with the debt facility...
infers imo that the market sees the risk of MWB going bust as very high.

cash needed to pay for non-owned part of MBE ...quite small relative to debt facility of 180M....but if bank sees nett assetts position as not so good then it may not be keen to increase the lending...

[scburbs] 13/12/2011 15:13

Remove cap, place in hand, add downtrodden look and then head off to see Regus.

Endure their smug looks before they tell you how much they will give you for MBE (unlikely to be 95p!). Meekly accept their revised offer, place tail between legs and depart.

Cheer yourself up with some crazy new incentive scheme to strip any residual value from MWB shareholders.

[markt] 13/12/2011 15:01

the MWB offer thing is still going on....since June !!

...perhaps now any MWB shareholders would not want to accept any MWB shares as part of the payment...due to the falling MWB price...and MWB debt levels...
..in that case, has MWB got enough cash to buy the remaining MBE shares ?...perhaps not since its cash/debt position is not so good, been doing sale and leaseback deals to raise cash...


would it make sense for MBE to be sold for cash to AN Other.....and MWB can use that cash to reduce its own debt levels and improve its own financial position...?

[paddyloyd] 05/12/2011 16:32

I think we have the answer to that now - unfortunately

[markt] 02/12/2011 17:24

...the graph is looking very desperate....

but Pyrro have bought a few more recently...

Any opinions on whether MWB shares will continue heading down or could rise again ?

[markt] 18/11/2011 14:49

If MWB goes bust does it have to use its "MBE" shares to pay MWB creditors ?

[markt] 12/11/2011 16:35

Background info
If anyone is interested in info relating to one of the board members....and controller of the votes of large investor in MWB....and their investing performance over the last 20 years....you'll find all the info over on the LFI msg brd....

includes compounding etc..since 1990 !
Conclusion. LFI performance over last 20 years under the control of David Marshall (and with a son as director of subsidiary for at last 10 years) has been a disaster !
(the LFI subsidiary is the co. secretary I believe for MWB ...and I think also does the MWB accounts).

(I'm keen to get some shareholder action at LFI...perhaps make some strategy and/or investment mgr changes so that next 20 years are different from the last 20 or a winding up of LFI and distribution of assetts .....but no interest from other LFI shareholders, ...so far)

[markt] 09/11/2011 15:44

Stephen Wilmot

"The whole sorry saga remains a vivid reminder of the foolishness of the property boom and the unfortunate link between real estate and the banking crisis."

but

I thought that the MWB problems all happened years before the property boom....
boom ended around 2007-2008....and MWB already had announced a plan, "ending" in 2005, to sell off assetts and return cash to shareholders...ie. years before the property boom..I think they claimed at least 2 pounds per share as expected return...indicates that the directors' words should be treated with caution !

[markt] 09/11/2011 15:41

BTW....if I recall correctly ...MWB had an end date to liquidate assetts and pay out to shareholders of....2005.....and extended...and extended again recently to 2016....

or am I wrong ?

if correct, then it indicates perhaps the the MWB are stretching things out as long as they can...and that their word is very rubbery/flexible....

and they did one pay out at 300p per share, share cancellation/buy-in.....but a few years later did a share issue at 30p....indicates imo that they really don't know what they are doing, or where doing...

and despite the plan to liquidate assetts and return to shareholders...over the years they have continued to take on new hotel projects !!....ie. say one thing and then do the opposite....

the past high cost of the service function for the HQ function was also doubtful imo......subsequently stopped when short of cash later on...

and the operation of the directors own business from the same offices....conferences....again dubious related business imo...

the negative responses from Pyhro to many of the proposals also creates doubts about the MWB board imo....

-------

Will there be anything left for shareholders after any debt is paid off or reduced to managable levels ?

The gearing is so high and the clouds so thick that it is very difficult to know with any confidence....
could easily produce a sudden large gain, or sudden collapse imo if break any of the bank covenents ...

[williamgtheobald] 30/10/2011 15:02

MWB: a Mess Without Bounds?

By Stephen Wilmot, 28 October 2011

The boardroom saga at MWB never seems to end. The property company got in a tangle this spring when it tried to buy out the minority shareholders in its Business Exchange subsidiary. Now the storm has moved to its other subsidiary, hotels group Malmaison, due to a controversial refinancing. But the Malmaison affair also has the potential to derail the bid for Business Exchange.

It's a convoluted tale, so let's start with the basics. MWB Group is a property holding company, which like many of its peers emerged from the property crash with too much debt. It used to have three subsidiaries, but sold one - the iconic Liberty department store - for £42m last year to satisfy the banks.

That left it with a 72 per cent stake in Business Exchange, a listed provider of serviced offices, and an 82.5 per cent stake in the Malmaison and Hotel du Vin hotel chains. And still loads of debt.

It is this messy corporate structure that has proved so problematic. We reported on its attempts to buy the rest of Business Exchange on the cheap here. The short version is that MWB was eventually forced by Pyrrho, an activist private equity fund with an 8 per cent stake in Business Exchange, to raise its offer from 50p per share to 80p per share.

That seemed like a victory for small shareholders at the time, and Business Exchange's shares jumped to near 80p on the news. But MWB never actually formalised the offer, which was mainly made in stock, and its own share price has since plummeted. So the deal will have to be renegotiated yet again - if, that is, a formal offer is tabled at all. MWB has until 14 November to make clear its intentions under the new Takeover Code. Given the rumpus that has since erupted over at Malmaison, not to mention in the stock market, we wouldn't pin any hopes on it.

Malmaison (including Hotel du Vin) basically consisted of a £437m portfolio of hotels and a £283m RBS loan held against it. That loan was due to expire at the end of 2011, and so on 29 September MWB announced a refinancing deal. It has agreed to pay back £100m by selling off (and leasing back) five of its most valuable hotels, in return for which the bank has agreed to extend the remaining £180m or so of the loan by three years.

Richard Balfour-Lynn, MWB's chief executive, claims this puts the group on a robust financial footing, leaving it free to pursue long-term strategic ambitions such as international expansion.

But Pyrrho, which owns 24 per cent of MWB as well as its stake in Business Exchange, disagrees. In a long open letter to MWB's board on 17 October, it took strident objection to just about all the terms of the refinancing. Above all, it objected to the treatment of Malmaison's minority shareholder, RBSM Investments, a private equity arm of RBS, whose annual return on its stake will more than triple from 5 per cent to 16.25 per cent. Pyrrho's director, Paul Cummins, thinks RBS used its nepotistic position as lender to extract a disproportionately generous return for RBSM.

Actually, it's not just the details Pyrrho objects to – it's the whole strategy. Mr Cummins, who is based in the Far East, thinks the debt should have been reduced not by a fire-sale of the best assets in a weak market, but by asking shareholders for more equity.

Mr Balfour-Lynn dismisses Pyrrho's concerns as the hobby horse of a lone shareholder that "doesn't recognise how difficult the banking world has become". He points out that the deal secured the necessary vote of approval at this month's EGM – and even before that he had to get irrevocable commitments of support from 51 per cent of shareholders.

Against the background of this spat, it's clear that even without the refinancing problems Malmaison – effectively a play on UK business and consumer spending – is in a tricky spot. Occupancy fell from 79 per cent on average in 2009 to 77 per cent in the 18 months to 30 June. Cash profits were down 6.8 per cent to £25.9m for the year to 30 June. The company even resorted to blaming bad winter weather, the ash cloud and the Royal Wedding.

The value of the hotel portfolio was consequently marked down 9.6 per cent. But the recent sale-and-leaseback deals suggest even those valuations may be optimistic: Malmaison received £103m for five hotels with a book value at 30 June of £151m.

True, the 70-year leases MWB negotiated with the buyers hold some value, which will not be quantified in the books until the year-end. But even if the leases do make up for the apparent £48m discount to book value at which the hotels were sold, they are an intangible asset. Malmaison claims it has retained asset backing of 77 per cent of the portfolio, by number. But counting the number of hotels this is pretty disingenuous – actually it has sold off 34 per cent by value (which is what counts). Little wonder RBS could still call the shots in the refinancing, despite the £100m reduction in debt.

Is it coincidence that Malmaison's long-standing chief executive, Robert Cook, announced his departure a fortnight ago? Mr Balfour-Lynn vigorously denies acrimony - he even penned a denial to the stock exchange this month in response to a piece in . The two may well not have "fallen out", but the more pertinent question is whether Mr Cook would now be looking for a "fresh challenge", as Mr Balfour-Lynn puts it, if his company's strategy had not been overwhelmed by debt issues.

So what are shareholders to do? Business Exchange shares are now worth 61.5p – below MWB's 80p offer back in July, but still well above the 45.5p level before the initial bid. It's always tough calling takeover situations, but we would suggest shareholders get out while they still can. At MWB's current share price, the July bid is now only worth 58p, and there's a good chance it won't be made formally at all.

After all, MWB's shares have lost a quarter of their value this month and 41 per cent since August. They're now trading at 26p, a level not seen since early 2009, when they bottomed out at 21.5p. That reflects both the debt mess and pretty gloomy operating figures published a week ago. MWB announced a £44.9m pre-tax loss for the 18-month period to 30 June, with shareholders' equity down 21 per cent to £81.2m, or 49.5p a share.

That's almost double the share price, so the valuation discount is wide. Existing shareholders, poor souls, may want to wait for a trading bounce before selling out. But they should sell out when they can: with exposure to fairly cyclical sectors in the UK economy, and only three years until the debts are again due, MWB will struggle to turn the page. The whole sorry saga remains a vivid reminder of the foolishness of the property boom and the unfortunate link between real estate and the banking crisis.