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|cyberpost: Offer for Vigilant Technology
RNS Number : 5109Y
BATM Advanced Communications Ld
08 July 2008
BATM Advanced Communications Limited
("BATM" or the "Company")
Recommended Offer for Vigilant Technology Limited
The boards of BATM and Vigilant Technology Limited ("Vigilant") are pleased to announce that they have reached agreement on the terms of a recommended offer to be made by BATM for the entire issued and to be issued share capital of Vigilant (the "Offer"), to be effected by way of a merger of a BATM subsidiary and Vigilant (the "Merger").
Vigilant, which was admitted to trading on AIM on 20 December 2005, is a developer and manufacturer of intelligent video recording and surveillance solutions for mission-critical applications. Vigilant has a worldwide customer base supporting cameras in airports, government sites, financial institutions,
correction facilities, casinos and city centres amongst others. Vigilant reported a loss before tax of $7.36m and had gross assets of $6.82m for the year ended 31 December 2007.
Dr Zvi Marom, CEO of BATM commented:
"The acquisition is in line with our stated strategy of extending our intellectual
property and technological expertise into new, niche areas of opportunity in vertical markets, through modest investments. Vigilant's expected new IP releases fit with BATM's expertise in dealing with triple play traffic."
Under the terms of the Offer, Vigilant Shareholders will receive 1.3 pence per Ordinary Share (the "Cash Offer") or, if they elect before 13 August 2008, approximately 1.6 pence per share payable in new BATM Shares (the "Share Offer").
The terms of the Cash Offer value the existing issued share capital of Vigilant at
approximately £845,000 assuming that all Vigilant Shareholders accept the Cash Offer or, up to approximately £1,040,000 if all Vigilant Shareholders elect to receive the Share Offer, based on a BATM share price of approximately 46.4 pence, being the average share price of BATM between 4 April 2008 and 4 July
2008. BATM will fund the cash element of the Offer from its existing cash resources.|
Think I'd prefer a quick trade sale, rather than a dilutive fund-raising. With the mkt cap this low, they should be able to sell the company quickly for a premium to the current share price.
|paulypilot: Hi gogo,
Well at least we know what's going on now anyway - we suspected they needed to raise more cash, and now they've confirmed that.
I agree that the flurry of sells just before the announcement look highly suspicious. Insider dealing is alive & well, by the looks of it. I'm tempted to flag it up to the FSA, but what's the point ? Nothing will be done.
Let's hope Shore Capital are able to raise the fresh funding, it's not exactly a lot of money - they probably have plenty of discretionary clients that they could put into it. So there is hope yet. But significant dilution of course.
New funding likely to be at or around 1p/share I would say, as anyone putting in new funds would be justified in asking for a discount to current share price.
Very disappointing overall, but it's not over yet.
It's still astonishing how management here managed to burn their way so rapidly through a cash pile that should have been more than adequate. That said, they can't be far off cashflow breakeven by now, but as you say, would have been nice to get some info on that.
|gogoneko: Another dilution but to raise just £50k.
Again, the three +ves that oppose the -ve are that: 1) more than two funding groups consider the company to have a future, and 2) 3p is a respectable amount to invest at - implies that they consider downside is limited, and 3) it hasn't (yet! ;) ) been one of value-destruction dilution exercises that some companies resort to - although in the context of such a large decline in share price from 50p this probably doesn't count!|
|gogoneko: My assumptions are that Syntek wouldn't have invested now if they were likely to have their holding diluted in another fundraising which didn't involve them. Similarly it wouldn't make much sense if another fundraising were required and Syntek were invited to take part, i.e. why two requests to the same party?
I therefore, in light of the encouraging trading statement, think that the company is having to watch the costs very closely but only requires short-term capital to tide them over. I certainly think that the statement indicates that the company has a future whereas the share price dive seemed to imply otherwise. In fact the last sentence could be seen as an indication that sales have improved to such an extent that they need money to increase production. It's a possibility as there's certainly no mention of activity being scaled back in any form - which is what would be expected of a company experiencing hard times! Actually I think I've just convinced myself to buy some more ;)|
Reassuring to get some news from the company, and this trading statement is most encouraging;
"Sir Trevor Chinn, Chairman, commented: "We have continued to grow our market
presence in our existing markets, and have made great progress in breaking into
new markets. This funding will provide additional working capital to fund
further marketing and sales achievements."
That said, £200k doesn't go very far, and one imagines the cash position must be pretty precarious. So a bit of a binary bet really.
If the company does need to raise more cash (very likely IMO) then I'd much rather see them put out good figures & let the share price rise somewhat before diluting existing holders any more. Though I can live with 10% dilution at 3p.
Fingers crossed !
I'm intrigued by the flurry of buys in Vigilant over recent couple of weeks. I wonder who is buying, and why, given that there has been no news from the company for ages ???
Anyway, at least the share price is beginning to move in the right direction.
Well I've tried to make contact with the company, but not got anywhere so far, as follows;
1) I rang the CEO in Israel, but got through to voicemail & my request for a call back has not been met.
2) Rang the financial PR people mentioned at the end of an RNS, and they very kindly called me back to say they no longer work for Vigilant (presumably part of the cost-cutting, which is fine)
3) Rang the NOMAD, Shore Capital, who didn't even want to talk to me at all !!!
This reminds me why I don't normally invest in non-UK companies !!!
Mind you, the share price continues to edge up, and the website contains dates & venues for trade shows where Vigilant is appearing, so clearly business is ongoing.
Would be nice if the company could at some point remember that they have shareholders & are a Listed company !!!
I will try calling Israel again next week. Bit busy today.
|gogoneko: With a 4% shareholding I'd be putting myself in touch with the directors asking what the hell they're playing at watching the share price slide 80% and saying nothing - they should be answering to you!|
The long silence from the company does make me fear the worst (the cash position must be pretty precarious by now), but as people have pointed out, there have been new contract wins & the opening of a new UK HQ, which are hardly the actions of a company that is about to go bust !
To a certain extent the share price is irrelevant anyway, as there are hardly any shares actually traded, so the MMs just mark it down on tiny volume.
Will be interesting to see how it progresses. I still hold (indirectly) 4% of the company, so would be nice if it does multi-bag ! But I've also effectively written the shares off, and they're so low now anyway, it won't make much difference to me even if they do go under.
But let's hope a huge rebound is in the offing !
Would be nice if the company bothered to update shareholders occasionally, their reporting is absolutely awful - infrequent & very late !
Vigilant share price data is direct from the London Stock Exchange