Argo Share Discussion Threads

[stemis] 27/3/2019 17:03

I agree it's a risk but I think it's less likely with the tender taking place at 26p

[zcaprd7] 27/3/2019 14:48

I'm still lurking, bit worried they could delist this...

[stemis] 27/3/2019 07:32

Surprised its only opened at 19.5p. Surely there can't be any sellers this side of 26p now. Any sort of good news should see this at at least that sort of level?

[rhomboid] 26/3/2019 20:24

I’m here watching 🙂

[stemis] 26/3/2019 07:45

Wow. Very surprised. Company fails to spend all of £2.5m, even at 26p, as many shareholders decide that shares are worth even more. I think anyone who tendered and got 26p must be pleased. I didn't tender in the end so it'll be interesting to see where the shares open. I estimate NAV now 40.6p a share. Wouldn't surprise me at all if, in next year, the AREOF situation is resolved and NAV increases to 58.1p.

I guess from here on I really am going to be the only one on this board though...:-(

[stemis] 13/3/2019 13:53

Raskolnikow,

All fair points although I think 90% is the threshold for an enforced purchase of remaining shareholders.

I think there is some reputational risk in screwing over minority shareholders when your business is looking after people's money so maybe for a couple of million it won't be worth it. Certainly, though, they've not been averse in the past to stripping money out of the company through bonuses.

Once they've distributed the cash, ARGO will pretty much (91% of NAV) be just a 23% holding in The Argo Fund (TAF). Of the other three funds, Argo Distressed Credit Fund and Argo Special Situations Fund are closed to new investment so I guess in wind down mode (AUMs down 36% last year). Argo Real Estate Opportunities Fund (AREOF) is basically owned (83%) by the other funds and ARGO itself.

So I don't know why they don't collapse ARGO in TAF. What's the point of the quote? They could liquidate ARGO and distribute the shares in TAF to shareholders of ARGO and then allow redemption for those who want to cash in? Would save the costs of being a plc.

[raskolnikow] 13/3/2019 13:28

Same thinking here. But in that case it makes sense to tender at 26p as you either receive an okish price for your Shares or keep a stake in a potentially very valuable biz

[stemis] 13/3/2019 13:18

It's a clever tender because it's really the 'prisoners dilemma' in drag.

If we all tendered at 26p, we'd each get the same amount of cash as we would at 18p, but be left with a greater stake in the company. However as soon as one holder tenders at below 26p, everyone else loses out. So to guard against that everyone will probably tender at 18p even though we'd all be better off if we all tendered at 26p!!

Personally I'm not sure if I'm going to tender at all. If I was absolutely sure I'd be treated fairly by the Rialas brother in the future I'd not. Why sell shares at less than half NAV, especially when the result of the tender will probably be a 20+% increase in NAV as a result and, if they sort out AREOF, a further 40% increase in NAV (leaving 18p a mere 27% of NAV). The problem is I'm not...

[raskolnikow] 13/3/2019 13:12

I am just trying to understand the risk here. I see three potential issues:

1. They do a de-listing and you are traped in a private Company (75% majority required?)
2. They buyback or personally acquire more Shares and eventually make a takeover offer and squeeze remaining shareholders out (95% required?)
3. They start to pay themselves outrageous salaries / fees to take the money out of the Company without letting minority shareholders have their fair share as well.

As long as they are below the respective thresholds (75% majority for 1.? and 95% of Shares for 2.?) 1. and 2. pose relatively minor risk; 3. is probably not possibly to mitigate but inherent for such a company

[stemis] 13/3/2019 10:06

Pretty sure they'd be able to vote for a de-listing. Not sure what you mean specifically by a 'squeeze out'.

[raskolnikow] 13/3/2019 10:05

Does anyone know if the Rialas brothers (being directors or the company) would be allowed to use their shares in a vote for a squeeze out or delisting??

[westcountryboy] 13/3/2019 08:48

I'm here - I thought I would tender at 25p and see what happens...

[stemis] 13/3/2019 08:27

Anybody left in here or am I talking to myself?

[stemis] 07/3/2019 09:58

Interesting developments.

SP now 17p compared to NAV of 38.1p. This excludes the amounts due from AREOF, which are fully provided against but management continue to insist are fully recoverable. This would add another 14.5p to NAV (making it 52.6p). Interesting that AREOF now has a NAV of $15.0m (up from $0.7m), which is presumably after the accrued $8.9m to ARGO. So in a winding up they have the assets to pay the debt.

The tender offer, which could range from 18p to 26p, will increase the net asset value per share to 41.2p - 46.5p. I'm guessing they'll get enough tendered to make it 18p therefore increasing NAV to 46.5p. Add backing the AREOF receivable would make that 67.1p.

The timing here is interesting. The tender will absorb $3.25m of their $4.0m cash. I can't believe they'd do that without a lot of confidence about the 'future'. TAF was up by 2.7% in January and AUM increased by $12m to $80m during 2018. Talk of increasing it to 'well over' $100m.

Post tender ARGO will be basically an investment in TAF ($18.2m out of net assets of $20.0m) owned 74.8% by the Rialas brothers (assuming tender at 18p). That's not sustainable. The value of shares in ARGO at 17p not owned by the Rialas brothers would be a mere £1.4m. Surely the Rialas brothers could sweep them up for say £2m and take this private?

[stemis] 30/7/2018 11:25

Half year results were 1 August in 2017 so maybe tomorrow? It's not like they take much preparing...

[hugepants] 25/3/2018 18:59

That is some bonus. They are a dubious pair right enough.

[stemis] 07/3/2018 09:19

Well, there they are.



The Directors are not declaring a final dividend but intend to restart dividend payments as soon as the Group's performance provides a consistent track record of profitability.

They could, of course, have paid a special dividend of $1.75m which would have been 2.7p a share. After all, as holders of 52% of the shares the Rialas brothers would have got half. But instead they decided they'd have it all and paid it to themselves as bonuses. Clearly they struggled to get by on last years $800k. This is a company with a market cap of $11m.

Under normal circumstances a company with net assets of $25m (including $5m of cash) valued at $11m could be considered very undervalued. But tnat's before the Rialas brothers discount....

I hold. One day something is going to happen here...

[stemis] 19/2/2018 14:02

Hopefully we should get the finals in March

[zcaprd7] 05/1/2018 16:39

More signs of life?

[zcaprd7] 29/12/2017 13:07

Some activity here, hopefully they put it out of its misery next year...

[zcaprd7] 20/10/2017 15:35

Three year high I should say..

[zcaprd7] 19/10/2017 16:07

Nice bit of volume today. And a 52 week high!

[stemis] 13/10/2017 10:21

Well the next set of accounts will be interesting. Here's what they said at the interims

Continuous investor interest in the Argo Fund is expected to materialize into more sizeable subscriptions in the second half of the year.

[zcaprd7] 12/10/2017 13:28

I think they need to put it out of it's misery and mbo...

[hugepants] 27/9/2017 15:26

Not sure how liquid the investments in funds are. The Argo Fund (TAF) is their biggest investment, worth over $10M. It's performing pretty well. The website says;

"The Argo Fund Limited (“TAF”) was launched in October 2000. It is a Cayman-domiciled fund with monthly liquidity."