Brightside Group Share Discussion Threads

[caradog] 10/9/2013 09:48

What a corporate dog's dinner. The veiled profits warning seems to have given Markerstudy's lenders cold feet. At least we can console ourselves with the thought that if they were thinking of bidding at 21/22, the company is probably worth more than that, and we only have 8 days to wait for definitive (I hope) information. After initially intending to sell today, I have decided to wait for the statement next week.

[trader_3] 10/9/2013 09:18

Brightside Group plc ("Brightside" or the "Company")100913

Response to Announcement by Markerstudy Holdings Limited ("Markerstudy")

The directors of Brightside (the "Board") notes the announcement released yesterday by Markerstudy in connection with a potential offer for the Company.

The Board believes that a proposed offer price of between 20-22p (the "Revised Offer Price Range") per share fundamentally undervalues the Company and therefore sees no need in proceeding with offer discussions with Markerstudy. The Board also notes no firm offer has actually been made for the Company. Throughout its discussions with Markerstudy about a potential offer for the Company the Board has had concerns about their ability to secure the necessary debt financing to fund an offer and believes this to be a fundamental reason behind Markerstudy reducing its valuation of the Company from 27p.

The Board is in no doubt that the commercial interests of Brightside are being increasingly damaged by the length of the current offer period. To this end and following the reduction in the proposed offer price, the Board is not willing to extend the deadline under which Markerstudy must announce a firm intention to make an offer in accordance with Rule 2.7 of the City Code on Takeovers and Mergers. The Company has co-operated in full with Markerstudy as part of its due diligence process and has reviewed and responded to its queries arising. The Company had already, reluctantly, agreed to an extension of the offer deadline on 13(th) August 2013.

The Company intends to announce its unaudited interim results for the six months ended 30 June 2013 on 18(th) September 2013. Within its interim announcement the Board intends to give full disclosure on its future strategic direction and growth initiatives.

[this_is_me] 10/9/2013 07:52

It looks like those guys expect something for nothing and want us to ignore how well the business has been doing over the last number of years.

[trytotakeiteasy] 10/9/2013 07:29

just shows how things are unpredictable.. someone was saying here a while ago that it was illogical to sell below 27p...

[masurenguy] 09/9/2013 22:46

Looks like Markerstudy are playing games here and that their proposed bid is almost turning hostile. They picked up most of their shareholding in February from Banks and Gannon at an average price of circa 22.2p and it looks as though they are now seeking to pick up the rest of the shares at around the same price.

Masurenguy - 28 Aug'13 - 371: Hmm..........well I'm out for the time being have sold my position last week and taken circa 18% profit. I previously expressed my reservations regarding transparency here in post #352 and if no deal is announced by the extended deadline we could see the price fall back to circa 20p/21p. If so I might then buy back in on a better value metric. Otherwise I have some potential alternative options for these funds.

Glad that I took profits and exited last month. It looks like the share price will now drop back toward that 20/21p range over the next day or so.

[trytotakeiteasy] 09/9/2013 22:34

I can see that underwriting would of provided them with a source of capacity... maybe in a soft market insurers feel they don't have to use a broker... still a profitable and cashflow generative business

[briangeeee] 09/9/2013 21:09

Yes, IIRC according to the current board it was because of a difference of opinion on whether to move into underwriting.

The Markerstudy statement today just seems absurd. Sure they want to get the company cheaply, but at the same time as making a ridiculously low-ball indicative offer, they're making a bunch of demands. I assume BRT will simply issue a simple statement saying that the offer is not recommended, and get on with life. This bid will have done nothing for investor sentiment however, and raises questions about the current board, strategy, and prospects.

From their recent investor video: "The team behind Brightside Group PLC heads up one of the fastest growing insurance broking and financial services operations in the UK". If truthful, the current valuation is low.

[trytotakeiteasy] 09/9/2013 19:55

BranGeeee - was that the reason Arron Banks left... this company is like a soap opera turning into a farce... Markerstudy originally said they built their position to defend the group against takeovers.. then they tried to launch a takeover.. also no reason was given for the previous CEO leaving..... he just left...

Trading statement was also a bit unclear in my view... so stock will most likely fall back tomorrow.... although interim results soon..... not sure what to make of it... was the trading statement preparing us for a profits warning?? But shares seem pretty cheap as it is....

[briangeeee] 09/9/2013 18:48

It would appear that both the current board of Brightside and Markerstudy are agreeing that Arron Banks was 100% correct with the direction in which he wanted to take the company (into underwriting), and the current board were wrong. Interesting.

[marben100] 09/9/2013 17:20

ISTM that Markerstudy is trying to strongarm the company and shareholders.

It is a key provider of underwriting capacity to BRT and is pointing out that insufficient underwriting capacity is holding the company back - implicitly threatening to constrain the company's revenues.

It is now up to the company's management to demonstrate that they can find alternative underwriting capacity and that they can grow earnings and dividends. I hope to see a robust response to Markerstudy's announcement.

I only have a small position here at present, so am happy to sit this out & see what the company comes up with. The ball is very much in Martyn Holman's court.

Cheers,

Mark
Twitter @marben100

[trytotakeiteasy] 09/9/2013 16:59

The cheeky gits... 20- 22p a share take it or leave it... am I being thick or is that a rip off deal.... reality is marker study couldn't get financing and is walking away... what am I missing??? Offer appears to have just been a waste of time....

[trytotakeiteasy] 06/9/2013 11:21

Tuesday decision time for Markerstudy.... 27p offer will almost certainly be rejected by holders... I am guessing they will delay again so we can see how the interim results are...

[trytotakeiteasy] 02/9/2013 23:48

Stegrego - I haven't sold my self.. not sure I agree with your argument that it makes no sense to sell at under 27p.... maybe Brightside trading update makes bid less likely to go through... and then stock sells off significantly due to weaker trading..... I agree with you if you think the 27p bid is rock solid at that price or above.... but why do you think it is rock solid and won't be pulled?

[masurenguy] 02/9/2013 17:47

My post on 31 July was made when the deadline for a bid was August 13th. Subsequently this deadline was extended to Sept 10th which changed the original scenario especially since Markerstudy already has plenty of existing insight here and therefore I cannot see why they need further time. I also have had some issues with management transparency here too (see posts #196 & #352) and the confluence of these factors was sufficient for me to review my position as a result.

[stegrego] 02/9/2013 16:29

Just that it makes 'no sense at all to sell under 27p', yet you did.

Things and circumstances obviously change, just like opinions.

Just made me smile that's all, I don't get out much.

[trytotakeiteasy] 02/9/2013 15:53

Stegrego - hard to call I think this one. I can't imagine shareholders would accept 27p so I agree if a bid goes through it would have to be for a higher price... however, the unknown is the recent trading update and if things are getting worse for the group...i.e. given the move to a soft insurance market..

Complicating factors in the bid are that the bidder is a provider of capacity to Brightside and already has a meaningful stake in Brightside making it hard for another bidder to come along.... so all very complex in my view...

The broad picture appears to be that the stock is inexpensive but risk is that soft insurance market leads to a profits setback...

[masurenguy] 02/9/2013 15:20

and your point is......?

[stegrego] 02/9/2013 12:29

Masurenguy 31 Jul'13 - 08:49 - 352 of 373 0 0

Stegrego - 346: I can see what they are trying to do.... And frankly it's worked. Sold.

It makes no sense at all to sell at 27p or less. If a takeover takes place - likely imho - then I can't see it being less than 30p, and if it does not they will obtain additional underwriting capacity as they indicated
they would only 9 months ago.

Masurenguy 28 Aug'13 - 10:11 - 371 of 373 0 0

Hmm..........well I'm out for the time being have sold my position last week and taken circa 18% profit.



;)

[trytotakeiteasy] 30/8/2013 07:53

well stock has really come off...11% below the bid price... company really shot themselves in the foot with the mixed and unclear trading update.. was it a profits warning or not?? Will things quickly recover? Are first half profits up or not.... left more questions than answers.... a strange trading update to do in the middle of a bid situation...

this kind of lack of transparency puts people off micro cap stocks like Brightside....we still don't know why the previous CEO left... which is pretty basic stuff..

[count chris] 28/8/2013 21:56

I know rates are falling but this is reportedly because allot of the fraudulent claims are being taken out of the system so are margins being squeezed? Are they really passing on all the savings?

[masurenguy] 28/8/2013 09:11

Hmm..........well I'm out for the time being have sold my position last week and taken circa 18% profit.
I previously expressed my reservations regarding transparency here in post #352 and if no deal is announced by the extended deadline we could see the price fall back to circa 20p/21p. If so I might then buy back in on a better value metric. Otherwise I have some potential alternative options for these funds.

[trytotakeiteasy] 28/8/2013 08:31

che7win - agree with that.... but I think premiums are only down 10-15% or so... that is after about a 40-50 increase since 2007...

Crux is whether higher customer retention rates due to falling premiums (less shopping around) offsets the lower premium rates.... Brightside's trading update appears to hint that it won't fully... but it should do partially...

But longer-term perspective is that Brightside is cash rich and could undertake acquisitions to boost prospects..not sure about this whole bid situation as 27p looks very low... need interim results in September for some more clarity...

[che7win] 28/8/2013 08:23

Remember, falling insurance rates means less percentage going to brokers, that cuts margins per policy.

[trytotakeiteasy] 28/8/2013 08:07

maybe in a soft insurance market it is harder???? Soft market means falling insurance premium rates... so less moving around by insurance customers... thus I guess maybe less need for big companies to need brokers like Brightside.. just guesswork but appeared to be what their trading update was saying..