Zamano Share Discussion Threads

[aleman] 09/8/2015 11:57

Speaking after Zamano's annual general meeting in Dublin yesterday, chairman John Rockett said that even though it is currently in takeover talks the firm is still pursuing a number of possible acquisitions.

"We are looking to expand our activities, that hasn't changed because of this approach, we don't want this to become a distraction in any way from the core business," he said.

"We have cash on our balance sheet, we have borrowing capabilities, we have virtually no net debt. We have a war chest and we have the currency of our shares but we just have to see what happens."

Chief executive Ross Conlon added: "We have about €5m on our balance sheet so there's a bit of firepower there, [we are looking] mainly in Ireland and the UK, in a similar space to where we operate in mobile billing."

[the millipede] 07/8/2015 09:59

FWIW - and I hesitate to comment on a stock I have just sold out of - I think we are getting to the point where the cash balance is becoming a problem. For starters plenty of small AIM firms fritter cash away when they have it and I think it is becoming clear that ZAMANO can see no business opportunities to invest it in.

My feeling is that the best thing the company could do with this cash is buy back its shares. This has the potential to enhance liquidity but also will give investors who remain a higher share of the earnings pie and any future dividend payouts. The next best thing would be to return cash directly to shareholders in the form of a special dividend, although because of the tax implications for investors, a buy back is preferable IMVHO.

Sure this might be academic if the offer is accepted. But if not, and if I were invested, or if I buy back my shares, I think this is the sort of thing investors should be pushing for.

BWTFDIK

[geraldton1] 06/8/2015 11:22

Is anyone going to the AGM? This does look very interesting. I remember when this thing listed and then lost touch with its progress tbh. Agree with battlebus - limited downside for a niche company which looks to be trading well/lots of cash etc.

[battlebus2] 06/8/2015 10:09

Janeann the good thing about the 20% upside is if the bid is rejected downside is limited.

[aleman] 06/8/2015 08:39

I've just reread the first RNS in light of the AGM statement of still seeking acquisitions and the newspaper report of several expressions of interest. I'm sensing some schizophrenia and wondering if the executive directors want to keep growing the business by adapting to business rather than consumer markets and using the cash pile on acquisition while the majority shareholders would rather use the interest stirred up get out now - but at at a higher price than the illiquid quote has been prepared to provide.

[janeann] 06/8/2015 08:23

Also puzzled here - could buy this am at 11.75p - which gives a 20% upside to the possible 14 p bid?

[aleman] 06/8/2015 08:09

Anybody see anything clearer after the AGM announcement?

Didn't think so.

I'm trying to work out if there is any cryptic message in a bland repetition of strategy from results but it's going over my head if there is anything new there. There does seem something odd in reiterating your search for acquisitions after you have just announced you are in discussion following an approach for the company and it has been reported in a newspaper that the company "has been the subject of several expressions of interest in recent months from a range of potential buyers".

Updated comment:

[lord gnome] 06/8/2015 07:27

Absolutely, Tom. The mere announcement that Zamano is 'in play' could attract other interested parties. I live in hope.

[tom111] 05/8/2015 19:39

But we know the offer price so a another bidder could come in with a higher bid surely

[aleman] 05/8/2015 18:58

No. Since the UK adopted EU rules in 2006, we rarely get old fashioned transparent offers where the hopeful acquirer buys shares in the market up to the level it pitches its bid at, whereupon it has to release details to the market, and where, quite often for sizeable bids, both sets of shareholders got a say. We now get Schemes of Arrangement which is more a form of merger where both sets of directors hoersetrade for weeks or months without releasing details and shareholders hardly have clue what is going on.

It's another case of the EU screwing stuff up to benefit the rich at the expense of the poor. Directors arguably gain while small shareholders lose. The 75% vote threshold for a Scheme of Arrangment is lower than the old 90% that bidders used to try gain to compulsorily buy the remaining 10% so the price can be a bit lower and the directors will have a slightly greater influence so they get more sweeteners like payoffs or jobs in the new entity. With an old fashioned offer, there was a timetable. With Schemes of Arrangement, things can drag on for ages with shareholders in the dark. I tend to think the old fashioned offer was more likely to see open bidding wars on price, rather than behind the scenes discussions on what information directors should pass on to shareholders before presenting them with a final "merger" to vote on. Quite frankly, I'm starting to think Schemes of Arragement stink, a bit like prepack administrations. They seem almost designed to encourage insider deals and freeze out competitive bids. Well done, fascist undemocratic EU, slowly but surely removing the democratic rights of the its citizens through the back door.

I don't know which we have here but the lack of detail and timetable leans strongly towards a Scheme of Arrangement, as is now the norm.

[qut] 05/8/2015 18:34

Do we have any idea on the potential identity of the suitor?

[the millipede] 05/8/2015 10:47

Aleman, I hope you are right (and I am inclined to agree that investors should not want the takeover). But my feeling is that the highly conditional nature of the offer is not around ZAMANO being able to command a higher price but around the buyer's due diligence. This might turn up something unexpected (ly bad) or the buyer might just walk away anyway.

Or to put it another way, I think suddenly people see 14p (€20) as a reasonable floor in the share price based on the offer and on the conclusions of their research which leads them to see the current price as an anomaly. I see things differently. To me 14p now represents the ceiling for the time being and on that basis, coupled with the risk of the buyer walking away, I have taken the opportunity provided by the increased liquidity, to sell out here.

Nonetheless I hope this stock does re rate to the valuation it deserves. All the best, TM

[aleman] 05/8/2015 10:26

If the results for H1 are anything like they were for H2, NO, we do not want it. This company is probably well undervalued. That's why there have been "several expressions of interest". The shares would be higher if liquidity was better (we know investors avoid it from time to time due to the high spread and low number of trades and the shares could be much higher if we had broker coverage that highlighted how much better H2 was and came out with a suitably optimistic forecast for H1 results. Also since then, they have announced strategically important carrier billing contracts. The could well be an opportunistic bid, timed to get in ahead of H1 results.

[the millipede] 05/8/2015 09:24

Good luck guys. I hope this takeover works out, if that is what investors want.

[doodlebug4] 04/8/2015 08:40

Unfortunately their quoted prices are often unreliable and not just for ZMNO. I certainly wouldn't pay for that 'service'.

[lord gnome] 03/8/2015 17:13

doodlebug4 - Their L2 is axactly the same. I've complained to MAM on their bugs thread and they are looking at it. The fault seems intermittent, as just occasionally I get the right prices, trades and news. Five minutes later it vanishes again and the spread is back to 3-5p. Most frustrating.

[doodlebug4] 03/8/2015 16:16

MAM stockwatch for this share is all over the place again and it has been for months.

[aleman] 03/8/2015 15:37

I was going to compliment the directors for keeping the news from leaking into the market before official announcement - but it seems the news was broken by an Irish newspaper yesterday.

[aleman] 03/8/2015 15:29

Wexboy ‏@Wexboy_Value 23 hrs23 hours ago

Zamano 'has been the subject of several expressions of interest in recent months from a range of potential buyers.'

Wexboy ‏@Wexboy_Value 23 hrs23 hours ago

At tht point (and Zamano's progressed nicely since then), I pegged ZMNO's intrinsic fair value somewhere between €0.225 and €0.302 per share

Same as me in previous posts. I've previously stated these should be north of 20p, although admitted it might take them a few more sets of results to get there.

[aleman] 03/8/2015 13:59

Completed cup and handle in the chart suggests 18p target? That would still be quite cheap on free cashflow.

[aleman] 03/8/2015 13:56

Confusing. Irish market seems open.

[aleman] 03/8/2015 13:48

Sounds like it's a bank holiday for the Irish listing, and somebody else has bought in the hope of a higher bid.

[shaunstar] 03/8/2015 13:37

Normally id sell on any bid rumour but i consider zamano still undervalued by a stretch.
Ex cash still arounf 5x fcf. Over £10 mkt cap now so interest and liquidity may pick up. Looking forward to next trading statement.

[aleman] 03/8/2015 13:24

The P/E does not reflect the company's value. It has cash on the balance sheet that was approaching half the market cap before the bid. (I was looking forward to hearing more about cash at the interims in 6 weeks, if not in the business update we were expecting for Thursday). It has higher cashflow and much higher free cashflow than companies with similar P/Es. It has skilled staff that are hard to acquire quickly enough in rapidly growing industries. It has a customer base and important carrier billing contracts that, albeit small on a global scale, would still be of strategic interest to a larger mobile software company. The reason it was so cheap is it was well under the radar without broker coverage. The bid now puts it on the radar. 14p is an opportunistic sighting shot. I expect it will only be countenanced by the board if they end up with some generous subsequent arrangements with the bidder. Could anybody else consider bidding? Of course! It's very cheap.

[tom111] 03/8/2015 10:24

Could another bid come in here?Looks a good target p/e still very low