Acorn Growth Share Discussion Threads

[kvt123] 09/10/2016 16:49

Good find Hh100, I notice that Jason Peterson, also CPS Capital Pty, has a rather chunky 20m shares (about 8.4% iirc) in NHO. Wheels within wheels...

[hedgehog 100] 09/10/2016 16:21

Interesting to see that Paul Conboy, who owns 500,000 shares in ACO, is an associate director of CPS:

"Paul Conboy
Associate Director & Representative
Phone: [phone]"



And that CPS is looking to invest in "growth" assets:

"Recently we have established a team of Wealth Management Professionals, Ashok Desai, Dale Raynes and William Philogene. This is an exciting service allowing clients to have stable capital management along with a small percentage of their funds in “growth” assets."



"CPS Capital Group Pty Ltd is arguably Australia’s most active mid tier broker.

Established in Perth, Western Australia, in 2001, our boutique corporate advisory and stockbroking firm specialises in providing strategic advice to both retail and wholesale investors.

CPS Capital Group Pty Ltd (CPS) was formed in 2001.

We have acquired and developed a diverse and highly trained team, specialising in servicing the resource sector. Our representatives are all qualified, experienced investment professionals each with multiple years’ experience leading local and international corporate advisory and broking firms.

CPS holds an Australian Financial Services License, is a member of the National Stock Exchange of Australia (NSX) and has implemented technological solutions with the aim of exceeding industry standards in compliance. CPS is regulated by the Australian Securities and Investments Commission (ASIC).

CPS is responsible for over 100 corporate deals each year, including various Initial Public Offerings (IPO) and placements.

We pride ourselves on building thriving relationships with our clients and engaging with trusted projects in the junior and micro-cap sized, technology, mining and resources sector."

[kvt123] 08/10/2016 21:28

I was looking for links between CPS Capital Pty and the SAA when I found the charity page for the SAA here- hxxp://www.stockbrokers.org.au/About-Us/Charity if this is the same Heartwell that have become a majority shareholder in ACO then you have to imagine that Heartwell have been given the green light from potentislly very well-funded and well-connected members within the SAA.

[hedgehog 100] 08/10/2016 18:51

As with ACO, NHO is also looking beyond the resources sector:

"The board has continued to focus on new projects and has been evaluating new projects in all business sectors.
Due diligence has been undertaken and presentations reviewed for projects in the technology sector, finance sector and advance stage mining projects."

[kvt123] 07/10/2016 21:41

The 13/10/2016 is the anniversary of the suspension of NHO on the ASX. In the half yearly report (09/03) it was mentioned that a transaction would likely be consummated in the near future, I'm hoping that TB has identified a Company who is interested in using both shells to provide a cross listing. However, NHO haven't had a news release pertaining to anything imminent, so I would imagine my humch is probably wrong..either way, all will be revealed shortly.

[kvt123] 07/10/2016 06:02

Beats me Polly. I keep coming back to NHO...

[polly65] 06/10/2016 22:47

What seems to be happening with the resignations? We thought something could be on the cards this week but it has been pretty quiet. Begs the question, what is this deal?

[nextlink] 06/10/2016 10:36

Well I've added in two trades, one ISA

[yogaboy] 06/10/2016 10:22

Interesting time to be topping up. 30,000 on T+20 @ 15.47 was just too good to resist. There appears to be very little downside from here.Come on guys, tell us what you're doing...

[nextlink] 05/10/2016 20:21

Acorn Growth appear to have made no effort to
cultivate private investors, which is always
the sign of a rewarding investment.
Hoping we can repeat with Highway which is even
more mysterious.

[hedgehog 100] 05/10/2016 18:24

Nextlink,

And expenses of only about £60K. to raise about £12.5M., which is under half of one per cent, supports your thesis.

As does the expected imminent replacement of the directors ... are they waiting until the offer closes?

Because the placing completed on Monday (3rd. October), and at that point the directors were supposed to resign:
"Completion is scheduled to take place on or before 30 September 2016 or such later date as the parties may agree. On completion the existing directors will resign and be replaced by directors nominated by the investors."

And then there's the September rise and volume.

ACO figures for number of trades per month:

August 2015: 13
September 2015: 5
October 2015: 3
November 2015: 16
December 2015: 6
January 2016: 2
February 2016: 3
March 2016: 5
April 2016: 3
May 2016: 5
June 2016: 281
July 2016: 84
August 2016: 126
September 2016: 298



The big increase in volume in June was a precursor to good news, so the similar story in September should be sending a similar signal.

Retail investors might be able to participate in the offer, if they're quick, but probably not via their ISAs or SIPPs as this isn't an open offer or rights issue.

[nextlink] 05/10/2016 17:26

No Underwriters, no financial intermediaries.
Strikes me that this is a done deal, with institutional
investors in the wings.
May let a few private investors their full allotment.
Rather than risk it I just added to my holding at
the small premium to offer price.
Suspect offer will close very soon.

[yogaboy] 05/10/2016 12:31

Now that the Initial Issue has been completed, 66,666,667 Offer shares await a response from investors willing to subscribe £10,000,000 @15p. Investors, on the other hand, await news from the company that might entice them to subscribe.

Meanwhile the market has squeezed the offer down to 15.25 and the bid remains steady at 15.00.

This £10,000,000 Offer has to be all-or-nothing. Who would subscribe for a part when the market price is capped by the remaining overhang?

[joerani] 04/10/2016 16:16

You're not the only one mate! As I recall reading in the prospectus, dealings on the offer would commence within 2 business days of the allotment. But there is no indication of when the allotment will commence / complete.

[kvt123] 04/10/2016 15:27

Hmmm, not wishing to appear impatient, but I'm itching to know what is going on behind the scenes here..shouldn't be long now.

[hedgehog 100] 02/10/2016 16:15

Thanks Kvt.

A charity would certainly be expected to target lower risk investments, which fits with ACO's extending of its remit into real estate from mining-energy.

And I note that DPFI Property 1 Limited are subscribing for 3,686,063 shares in the placing.

[kvt123] 01/10/2016 21:57

Evening all,
It's interesting you guys mention the calming influence that the sequence of events here have had on the SP, as it adds a much needed layer of plausibility to the scenario I am about to outline.
Once a year, the SAA (The Stockbrokers Association of Australia is the peak industry body for institutional and retail stockbroking firms and investment banks in Australasia. Formed in 1999, the Stockbrokers Association of Australia, formerly known as the Securities and Derivatives Industry Association (SDIA), promotes the highest standard and knowledge of securities and derivatives professionals) hosts a golf event to raise funds for the Heartwell Foundation and has done so for the last 13 years.

The Heartwell Foundation is an Australian not-for-profit charitable organisation that enriches the lifes of special needs children hxxp://www.heartwell.org.au/about.aspx

Stockbroker news event - hxxp://www.heartwell.org.au/news_details.aspx?id=23

When Tony Brennan (whom is Australian) thanks the other Directors for their "continued dedication to the cause" could it be that he alludes to the Heartwell Foundation which will be a beneficiary of all their years of due dilligence.

Nigel Fitzpatrick also has a MBE for outstanding services to education.

If other like-minded members of the SAA assisted with this endeavour (surely discussed at the 19th hole) it could explain the unusual complexity and level of caution wanting to create a super low risk investment.

I love speculation...gla

[hedgehog 100] 01/10/2016 21:01

YB,

The important thing to remember is that a deal looks very close here, and that deals tend to create value for shells.

There are numerous examples of that.

There are no worries about a deeply-discounted share issue as a 15p floor has been set, but there is a great deal of potential upside.

ACO's cash of £3.6M. as of Monday reminds me of the £3M that shell CTP (Castleton Technology, formerly Redstone) started out with in late 2013.

And within two years CTP had more than 8-bagged from its low of 10p to over 80p, on a series of acquisitions.

"Small-cap rockets: Double or quits?
By Andrew Hore | Fri, 26th June 2015 - 15:58
... Shells surge
There are identifiable groupings in the list. For example, eight of the companies could be classed as having been shells, or about to become one, at the beginning of the period. Technology adviser MXC (MXCP) reversed into a former technology shell and is also adviser to another shell, Castleton Technology (CTP), as well as owning 24.3% of the latter. ..."
[...]

31/12/2013 07:00 UK Regulatory (RNS & others) Castleton Technology PLC Unaudited Interim Results to 30 September 2013
" ... Group net borrowings of GBP4.2 million (2012 GBP1.6 million). All borrowings repaid subsequent to the period end following the disposal of Comunica, returning the Group to a net cash position of approximately GBP3.0 million immediately on disposal
-- Group now set to seek new opportunities in the technology sector
David Payne, Chairman of Castleton commented:
"The disposal of Comunica presents a good opportunity for the Company, led by an experienced management team, to seek opportunities to maximize the value of the remaining trading businesses in order to generate higher returns for investors, which may include strategic acquisitions within the technology sector. The net cash position will be invested for these purposes." "

[yogaboy] 01/10/2016 16:37

I share your optimism Hedgehog, I really do, notwithstanding my annoyance at being unable to fathom the reasoning behind the sequence. The 15p placing of the Subscription Shares was a clear indication that the investors (i.e. the new effective owners for the time being, Heartwell, Tahir, Walters and DPFI, holding 53.62%) have a definite purpose in mind.

The current directors will resign by close of play on Monday, but of course they will retain their shareholdings and participate in whatever gains are on the way. Decisions will be made by the new BOD, nominated by the investors.

The new BOD will disclose the deal and the Offer shares will be subscribed to the full, releasing the share price from its ceiling. Assuming the investors don't participate in the Offer, their combined shareholdings will be diluted to 16.17%.

It does make some sense when looked at in those terms, to calm the share price for the Offer shares, if only for the time it takes to put the deal on the table. I think it will happen very quickly - maybe all by close of play Monday.

[hedgehog 100] 01/10/2016 15:46

YB,

It's certainly an unusual way of going about it. But then again, a placing at a 71% premium is also unusual. So hopefully there will be unusually good results!

Your theory of a 'share price calming mechanism' isn't implausible: if the company has a good idea already of the funds it wants and the share price for new shares it expects for its strategy, then setting that out now can avoid the sort of discounted fundraising later that can leave some investors disappointed.

Things seem to be move ahead quickly though, so everything should become clearer before too long.

The placing completes on Monday (3rd. October), and ACO will then have about £3.6M. cash to play with, far more already than most shells.
Certainly enough to fund a very nice acquisition, even without a shares for shares exchange.
Or maybe it will hang on for one really big one. Time will tell.

The directors here could be replaced at any time, and I would think that the company has some impressive people lined up as the new board.
These newcomers could give an indication of the roadmap here.

But offers are not generally open for longer than a month, and I'm not aware of any that have been open for longer than a few months.
And this is a quality opportunity, at an attractive valuation, at a good time of the year for fundraising.

So all in all I'm optimistic that the offer will be taken up within the short-term.

[yogaboy] 30/9/2016 16:37

I'm still trying to unpick the logic and the reasoning behind the sequence of events here. The cart seems to be ahead of the horse for no reason that I can see.

The "norm" is to identify a deal, value it, announce it and issue shares to raise the funds (open offer, subscription, rights, whatever). Note the issue price depends on the prevailing share price at the time.

In this case, the company invites investment of £10million in the Offer shares with no deal announced. Until a deal is announced, no-one will buy those Offer shares (unless they already know about it). Given that £10million of shares are for sale at 15p, the share price is now effectively capped at 15p.

Once a deal is announced, it will be funded (up to £10million) by issuing Offer shares at 15p. Perhaps it is just that - a share price calming mechanism. Whose interest does that serve?

There must be a good explanation, but it eludes me.

[hedgehog 100] 30/9/2016 16:06

Polly,

The figure of £13.6M. is including existing cash, not in addition to it.

That sum could be geared, yes, and a main-listed company should be able to borrow more cheaply than one on AIM.

Plus of course if appropriate the company could issue its own shares in exchange for the shares of a RTO target - it would be a simple matter to get the necessary EGM resolutions.

I'm not expecting the offer to still be open in eleven months, or even eleven weeks. But £10M. is a lot of money, so it's wise to give themselves the flexibility of not specifying an early closing date which they then wish to extend. With the right news, we could find that the offer is fully taken up very quickly indeed.

[cufes2] 29/9/2016 20:11

So the new shareholders decided to pay a huge premium of 15p per share and tie their cash up for 12 months without doing a deal . . . That makes sense . . . Not . . . They will need to announce a deal of significant value enhancement in order to make the open offer attractive and/or they are expecting some new shareholders to buy in size IMHO . . .

[polly65] 29/9/2016 19:14

Yogaboy, I think that may be why one of the resolutions is to be able to call a meeting with a 14 days notice period. Maybe they intend to do so after receipt of the additional funds??