Themutual.Net Share Discussion Threads

[8trade] 08/6/2009 15:14

Well done bozzy !

Still cant even buy 5000 online so the mm's remain extremely short
of stock, Scap are doing their best to try and get some sellers to
show up by repeatedly dropping the offer whenever they can.

[old boy returns] 08/6/2009 14:27

marben100 - I would be on for helping put together an action group to try to get a better deal for the independant shareholders. As you say it is achievable but only if enough can be bothered to come forward with their support. Also we would need a couple of large shareholders to support the cause.

As you say the deal stinks. We have not been told enough to value what is being offered but it is clear that IBG alone is worth more.

The whole thing stinks of a complete stitch up and directors are only going along with it because they would appear to have been grossly incompetent in managing the business and the deal gives them an opportunity to disappear quietly withoyt being held accountable.

So we need shareholders to pledge their support. Post on here or you can e-mail me at [e-mail].

[niggle] 08/6/2009 14:14

I missed all the madness on Friday and still have some of my original holding. No idea what's going on.

Nathan, good to hear it, good luck! btw Sebagos selling really really well :O)

[bozzy_s] 08/6/2009 14:01

Sold for 22% profit in 1 trading day. Quite happy with that. Might go to 13p short-term but I'd rather sell out while online limits allow a fairly large trade above mid-price.

[marben100] 08/6/2009 13:42

Hi BAHEID,

"I would be much happier if the reverse takeover involved an injection of cash but it doesn't!!!". Not entirely true. The document says this:

"In addition, there will be a short term loan provided to TMN Group of £2 million which will have no covenants, bear no interest and will be repayable in full in two years' time unless otherwise agreed by the Board."

and

"Incorporated in the Acquisition Agreement set out in paragraph 14(a) above, immediately prior to Re-Admission Michael Danson will agree to transfer the benefit of an interest-free £9,000,000 unsecured loan to the Company to be used for the Company's working capital requirements; such loan is to be repaid on 5 June 2019 or at an earlier date at the option of the Company. Immediately prior to Re-Admission Michael Danson will also make an interest free £2,000,000 unsecured loan to the Company to be used for the Company's working capital requirements; such loan is to be repaid on 5 June 2011 in the absence of default or at an earlier date at the option of the Company."

Nevertheless, this is very small sum in relation to what Danson is obtaining.

I remain amazed at the supine attitude expressed here. Danson would clearly like this deal to go through. The terms do not appear equitable to independent TMN shareholders to me (despite past management failings). Those shareholders can block the deal by not approving the Whitewash resolution. There is room for negotiation.

Regards,

Mark

[8trade] 08/6/2009 12:56

I dont think bulletin board punters are behind this buying.

All these block premium buys must be people in the industry or
some people getting the nod from people in the know.

119k buy pays 12.5p when 11.5p offer, not the first time today
that has happened.

No wonder online it's 250k v 2.5k !

[baheid101] 08/6/2009 12:45

Very difficult to scupper the deal unless somebody comes in with a rival offer

My take on this is that TMN management have completely destroyed value by taking on too much debt to buy IBG/TAPPS and the terms of the reverse takeover reflect this. IBG profitability should be solid enough (although the travel exposure will not be helpful), but my instinct is that the email marketing business is now profoundly loss making as demand for their owned email databases (largely made up of mutualpoints.com users) has fallen off a cliff and they are struggling to to 'right size' the cost base to minimise losses. Is this the credit crunch or management's failure to invest in the data assets to ensure their offering remains attractive through the cycle. Mutualpoints, which has historically been the main source of email addresses, has been shrinking for at least two years in the face of competition from cashback sites yet they have done nothing. Their email database is therefore old and unresponsive and correspondingly the amount advertisers are willing to pay will have fallen. Clearly things have turned down so far that they are now in danger of breaching covenants. Also who knows if the dutch TAPPS business is still profitable?

Hardly a position of strength to fight off Danson. On the plus side, hopefully we finally could have proper management running the business. This has clearly been the main problem in the past and it may be that having a smaller stake in a well run business is the least worst option.

I would be much happier if the reverse takeover involved an injection of cash but it doesn't!!! Progressive is in debt itself so the debt problem doesn't go away unless the new earnings power of the combined group is enough to pay down the debt without having to sell assets.

Shareholders have been SO screwed over in this company. I have been an investor for over 5 years through IBG and in my view this is almost entirely down to management weakness and as an investor in over 80 listed companies for my day job I can safely say this is the worst example of needless shareholder value destruction I have come across.

[clond] 08/6/2009 12:43

could do with a few more - my IBG holding has evaporated !

Need to bring my overall price down !

[8trade] 08/6/2009 12:38

Been some chunky buying this morning, i thought there would be
a sell off but not so, must have been a mm mistake by Singer
to open at 6p offer.

I'm out of the stock but a quick check of the limits and i can
tell those still in that they are sitting very pretty at the moment.

Sell 250,000 at 10.5p, smaller gets near mid price...buy just 5000
at 11p.

[hirschnathan] 08/6/2009 11:49

May was a very very good month no real sign of recession
June has been quiter,

I am a merchant as well now, , which has been running for 2 months now I cant say its doing amazing, but maybe I need more patience

good luck

[niggle] 08/6/2009 11:09

nathan, how is your affiliate marketing stuff doing? our business is booming.

[garth] 08/6/2009 10:29

"TMN makes the majority of its revenues from affiliate marketing and email marketing, though it also has digital publishing and research divisions-in 2008 it made revenues of £22.5 million, a 40 percent year on year increase, and profits of £3.6 million (release, pdf). But according to FT.com, Danson reckons TNM could make revenues of between £65 and £70. "

[8trade] 08/6/2009 07:58

This could get volatile.

Investec opens 10p bid and S&G open just 6p offer, maybe mistake ?

[old father time] 06/6/2009 17:16

I'm puzzled as to why the TMN Group plc annual return is so seriously overdue:



In practical terms filing this document is trivial - being over a year late the company and its officers must be being bombarded by threats from Companies House.

[hashertu] 06/6/2009 17:12

Puffin. As I understand it, only Mr Harkness will stay on the board.

[puffin tickler] 06/6/2009 16:52

"...if TMN independent directors are recommending the takeover, then there must be some over arching reason". Perhaps the reason is that they retain their jobs?

[hashertu] 06/6/2009 15:54

Marben. Post 2233.

SPG turnover that you quote is 12 months to March 2008. They also provide 9 months turnover to Dec 2008, which pro-rata is down 22%, big loss and large exceptional charge. (page 85).

The Dewberry turnover is for 18 months to Dec 31 2008, not 12 months, with small post tax profit.

I agree with earlier posters that without TMN year end numbers, it is not possible to make a rational decision.

The SPG/Dewberry collection does not look very appealing but if TMN independent directors are recommending the takeover, then there must be some over arching reason.

If Danson were to bid for TMN, he would have to pay 50+p per share. This route is clearly much cheaper for him. Also, he must still see some value here (for him at least).

[the analyst] 06/6/2009 15:35

I suspect there is more in the story to come and that this is just the first of a number of acquisitions Danson has planned

It would not surprise me if, over time, the new group becomes a £200m+, profitable company, having expanded through acquisition.

Whether that will create value for investors is a different question...

[marben100] 06/6/2009 15:25

oft,

Independent s/hs have two other options, as I've indicated above:

- Negotiate with Danson
- Inject a small amount of their own cash to keep 100% of the business (obviously with replacement of the current Board)

ISTM that most that have posted so far don't understand how bad a deal this is for TMN s/hs, bamboozled by the complexity. Is TMN's situation really as bad as has been made out? Considering the acquisition of the profitable IBG business, I find it hard to believe that hatches can't be battened down to steer TMN through the recession and come out as a profitable, growing business on the other side.

Why are the up-to-date numbers being hidden from us? The answer seems obvious to me.


If, as I had originally understood, Danson were injecting some larger, profitable, businesses into the group, then the deal might make sense for independent s/hs. Based on the published figures, he is not.

[marben100] 06/6/2009 15:17

the analyst - agree totally; there needs to be up to date management figures & projections for each business for any sort of sensible judgement to be made. However, based on historical numbers, this seems like a lousy deal for independent TMN s/hs. I also agree that a Board revamp is essential & I'd be happy to see Danson in charge, in principle - but these terms seem outrageous.

AIUI Danson is lending an additional £2m to the business, as part of the deal. Do s/hs feel that's a fair price for most of the TMN business, which Danson will be acquiring through this deal (i.e. that TMN should be valued at around £4m)? Remember: existing s/hs will end up with just 21% of TMN and 21% of the other businesses with highly questionable value (they've never been as profitable as TMN). Even if it were, that should be done by equity rather than a loan, which Danson expects to be repaid in due course. And if £2m is the correct figure then the current share price is far too high, valuing the combined group @ £40m.

Per the proforma balance sheet (p179), TMN as at 31st October had a net current liability of £0.5m, whereas the enlarged group will have net current liabilities of £4.6m. The combination is making indebtedness worse, not better.

If TMN had difficulty obtaining bank finance, why would this be any better for the combined group?

This simply makes no sense to me, on the proposed terms.


If TMN s/hs feel that it is a viable business, then they'd be much better off injecting capital via a rights issue or open offer, to eliminate indebtedness, than to accept this deal, if the banks aren't willing to play ball.


There are an awful lot of unanswered question and as I suggested earlier, if Danson wants independent s/h support, a proper meeting should be arranged at which those questions are answered and an equitable deal agreed. The EGM is not the right forum for that and should be postponed pending that meeting.

[muffinhead] 06/6/2009 14:07

Oft: board needs to back up that statement as analyst suggested