Quadrise Share Discussion Threads

[maddox] 31/7/2015 20:13

Hi badtime, one would have expected that the Lone Star cowboys, might have also approached substantial holders..."er do you mind if I rob you?".

We'll see!?!

Regards, Maddox

[badtime] 31/7/2015 19:45

QP..whats your view (sorry if i have missed it)re a counter offer...with the directors not having substantial holdings...surely the bidder would have sounded out the larger shareholders first?

[quepassa] 31/7/2015 18:07

Excellent post.

Good concrete reasons to further substantiate why the opening offer is far too low.

I am sure that those reasons will be picked up by institutional and big-ticket holders, as well as the smaller guy, who monitor the bulletin boards.

Any further valuation insights on Quintain would be most welcome from you and everyone else.


ALL IMO. DYOR.
QP

[maddox] 31/7/2015 17:29

Hi QP,

Agreed, there is huge hidden value in QED.

Specifically, the current NAV valuation does not include the potential uplift in the Wembley development land bank. In the March 2014 B/S the Wembley development land constituted 28.3% of QEDs assets valued at £334.9m. This is clearly a non-performing asset - not currently generating any return to the business but needing to be financed. However, on receipt of planning permission this can be expected to, what do you reckon, double or treble in value?

Whereas, we are being offered a 7% premium to an already out of date NAV.

Hmmm...

Regards, Maddox

[quepassa] 31/7/2015 15:58

911 and others


Tell your friends in the industry.

Contact the Company. Write them a letter.

Vote against the Offer.

Twitter.

Digital media.



Do you think that Texas-based Lone Star have any intrinsic interest in the Wembley Estate in terms of it being a truly important large-scale Urban Regeneration project for London and the UK?

Or do you think they view it more as an opportunistic and cheap financial/real-estate asset which they can make money out of quickly?

Additionally, if you break up Quintain, you get some nice things:-

1. Grafton Advisors

2. Wembley

3. Curzon Street Birmingham with HS2 potential

4. Salfords Surrey large scale resi development.

5. The London portfolio.

6. Other regional interests.


The sum of the parts is worth a lot more than the whole in my view.


In my view, a lot of the parts of Quintain would just be flipped for a quick profit.

The current offer is a truly lousy offer for the Company and for shareholders in my opinion.

The offer needs to be rebased to a reasonable premium over the NAV of the Company.

ALL IMO. DYOR.
QP

[bscuit] 31/7/2015 15:40

You start a Shareholder action group [look at what's happening in VLK]and after recovering an AR from C [cost£1] you contact holders with a view to getting 50%+ holding out for a higher price and that will keep LS away!. Fair amount of work.

[jaws6] 31/7/2015 15:39

david
Why big investor not asking for more ,can not understand or do we have to remind them ?

[davidosh] 31/7/2015 15:36

The acid test here would be.....Will these very well paid directors recommend an offer to buy the assets at barely above NAV if they are told that there will be no job for them on the other side and they just get minimum termination pay offs at the end of their contracts ?

That is why highly paid and incentivised directors that have never bought shares are always inclined to look after themselves and no need to worry about shareholders.

In my view any deal to be agreed to sell a company with huge assets that can be independently valued ie. property should be done with a couple of the leading shareholders or an independent shareholder actually in the negotiation committee so that all future employment terms can be seen within the deal !

Investors who put in hundreds of millions to buy the original QED assets are being sold short here IMO. The capital providers are losing out to the incentivised negotiators. Just my honest view.

[911man] 31/7/2015 15:09

AGREED... where do we sign up!

:-)

[quepassa] 31/7/2015 14:49

That's why shareholders need to see the offer for what it is and make their voices heard that the offer is opportunistic and undervalues Quintain.

The offer is nothing other than a play on the Discount-to-NAV of the share price because there is no dividend.

The deal needs to be priced on an reasonable PREMIUM to NAV not a cosmetically attractive PREMIUM to recent share price.

In my view, you are getting nothing than you would get anyway when Quintain start paying a dividend.

If Quintain declare a 5% dividend policy today, shareholders effectively have the same value as the Offer, without the Company being sold.


ALL IMO. DYOR.
QP

[911man] 31/7/2015 14:34

I think the problem here is that Management have little shareholding and the incentives that Lone Star will put in place will greatly reward them.. they will become very rich on this!!

[jaws6] 31/7/2015 14:12

QP
Agree on both post above. They selling QED on cheap at 131

[quepassa] 31/7/2015 14:06

Put another way, Quintain could create the same shareholder value/market value as the Lone Star offer just by declaring a 5% dividend policy immediately.

If they did so, the share price would undoubtedly in my view quickly rise to NAV, closing the large discount-to-NAV, and investors would start to receive a 5% dividend over the course of a year.

That is effectively the same value to shareholders as the Lone Star offer without the Company being sold.

The Lone Star offer is undervaluing the Company significantly in my view.

ALL IMO. DYOR.
QP

[quepassa] 31/7/2015 11:26

Lone Star have a strong track-record and good/aggressive reputation in hunting out distressed assets or assets which have suffered price dislocation.

When I read carefully the Investment Approach on the Lone Star public web-site which is to seek investments where they can capitalise on dislocation in asset pricing and value opportunities, it makes me wonder whether another type of "trade" buyer wouldn't be a more suitable counterparty for Quintain which is not in a distressed situation. Far from it.

This is a link to Lone Star's investment approach:-



Does Quintain as a fully rehabilitated propco with particularly low gearing naturally fall into these investment parameters? I don't think so.

So just what is the attraction to distressed buyer Lone Star? -I'll tell you. They know a bargain when they see one.

In my opinion, there is great value in Quintain but the share price has been held back by the on-going lack of dividend. That is why there is such a difference/disparity in my view between the share price premium of 22% and the NAV premium of 7%.

One could expect the bid premium to NAV and the bid premium to share price to be roughly the same in a property company takeover situation. Here it is far apart. That is a great value in the Company to a potential buyer.

For a normal propco paying a dividend, the market cap and share price will fluctuate around NAV in a positive market such as now. There would be no large discount to NAV.

From Lone Star's point of view, the historic lack of dividend is highly beneficial- and they are seeking to purchase the Company at a mere 7% premium to NAV because of the very fact that Quintain trades at a such large discount as it pays no dividend.

Lone Star are capitalising in my view not just on Quintain but on the big 15%discount to NAV of the recent share price.

Quintain, according to the words of their recently departed FD at the 2014 AGM when questioned on the topic of timing for resumption of dividend, said perhaps in three years or so.

It seems to me that Quintain would soon in my view be able to throw off a dividend of some 5%pa or so within the next couple of years.

Lone Star will in effect be able to earn back the 7% premium on any purchase of Quintain in dividends rapidly.

This is a highly unsatisfactory deal for shareholders in my opinion.

A 7% premium to NAV is selling the Company far too cheaply in my view.


The question which every shareholder must ask himself is what is a reasonable premium on any offer over NAV of The Company - and not premium over the recent share price which was held back by lack of dividend which was however expected to be resumed in the not too distant future.


ALL IMO> DYOR.
QP

[hisnameisolllie] 31/7/2015 10:17

There has been rumours of a potential takeover bid for Quintain for some time now, and rightly so considering the value there is to be unlocked from the assets held. I believe there will a number of firm who have been watching closely and already done there due diligence over the past year. It may not take too much extradition for another bid to follow.. Also Millennium Partners (further to - Maiken) and Sand Grove Capital Management (£8m I have been told, but I haven't looked into it) buying in, low risk trade for the potential 15-20% upside that may be realised from a further bid..

[r ball] 30/7/2015 21:34

I think there is a good chance of a counter offer. level of acceptances is low and QED now in play.

[maiken] 30/7/2015 16:35

Very interesting to see Millennium Partners declare a stake.If memory serves they are Arbs and have put in nearly £7million at 131.1p so it would appear they think there is something more to go for.

[shaf200] 30/7/2015 16:17

I hope there is higher offer... in my experience the only what the current bidders will increase the offer is if someone else shows any interest... and as pointed it takes time for a company to put together an offer.... they will try and push through the robbery asap...

[quepassa] 30/7/2015 15:39

Excellent response.

The wheels begin to turn slowly.

It would not surprise if certain important investors may already be expressing their displeasure and potential lack of support for the offer to The Board at the low price of the opening salvo.

The Board needs to serve its shareholders better and produce a higher, more convincing offer to win support.



ALL IMO. DYOR.
QP

[maddox] 30/7/2015 15:03

Hi shaf,

There may or not be a counter offer for QED but far too early to say. It is difficult to imagine many FIs being in a position to launch a fully funded counter offer in 24 hours from scratch. Assessing QEDs value, price to pitch, internal governance etc. Also, I doubt that we'd be first to know about it anyway, an informal approach to QED wouldn't require an RNS.

In view of the paltry price it is more likely that some of QEDs investors are suggesting to QED's Board that they look for alternative offers.

QED is effectively 'in-play' with a 131p offer on the table - hardly a knock-out bid IMHO. If there is no counter offer then the Lone Star Cowboys will have bush wacked us.

Regards Maddox

[shaf200] 30/7/2015 13:03

counter offer for QED from potentially where? lack of movement today suggests all done and completed.....

[quepassa] 30/7/2015 07:13

It is clear that the Quintain Board must have been in discussion with Lone Star for some time prior to yesterday's announcement.

Yet no RNS was ever issued to the effect of such discussions and a potential takeover which would have allowed shareholders to make their views known - and which would have allowed the market to form its own views about the true value of Quintain.

Never keen on takeover negotiations which go on behind closed doors which effectively shut shareholders out.

There is no way that big ticket and institutional shareholders should in my view roll over at the first shot and accept the low initial offer which has been tabled by deep-pocketed Lone Star.

A 7% premium over NAV is just too low.

It is interesting to look to the long drawn out and protracted battle by Songbird with the Qataris to increase the initial offer.

Shareholders would , in my view only, be well advised to push hard for a better offer.


ALL IMO> DYOR.
QP

[bscuit] 30/7/2015 00:45

I entered this party over a year ago and am up 85%. However I do think this is a lowball offer and it shouldn't take too much pushing by instis to get the price to 150. Let's hope they see it that way.

[r ball] 29/7/2015 21:53

Acceptance level low. the institutions may push for a higher price or just happy to get out. counteroffer likely

[r ball] 29/7/2015 21:33

how much will the FD who joined in May get?deal cheap. counter offer?