Brixton Share Discussion Threads

[osorkon] 02/6/2009 14:26

no problem :)

[sportbilly1976] 02/6/2009 14:23

Osorkon,

just my interpretation of the "reserves the right to vary the form of consideration" element in their rns...

apols for any confusion.

[osorkon] 02/6/2009 12:17

sportbilly1976 - 2 Jun'09 - 10:35 - 840 of 847


cheers scburbs,

well we know that SGRO are thinking about a cash + shares offer......so 3 shares + xp I'd guess....with the total around 100p.

4 shares + cash could be seen as generous.

100-110p my target

---------------------

Did I miss something? Where do you get "we know that SGRO are thinking about a cash + shares offer"?
From what I read in the RNS's, "SEGRO currently envisages that the consideration for any offer will be in the form of SEGRO shares".
Although they do state "reserves the right to vary the form of consideration", I'd suggest that they are "thinking about" a shares only offer. Hopefully we will know soon enough.

[madasafishman] 02/6/2009 11:56

all
im at work so cant really look at present
but seem to remember something deadline etc to do with covenants
in june/july that could be an issue.....could be wrong

[scburbs] 02/6/2009 11:31

Willyworm2,

There are undoubted synergies to the deal and SGRO/BXTN will be the market leader for industrial property (especially in the SE) by a long way. Due to the operational leverage and cost cutting I would expect earnings to be enhanced materially and should produce an excellent yield against the current share price.

The main question for the future of the combination is the takeout price. At a price of 4 SGRO shares for 1 BXTN shares then I think it will be a good deal for the combination.

If SGRO is forced to pay a significant element in cash or end up paying a premium then the prospects for the combination are less positive.

[willyworm2] 02/6/2009 11:20

scburbs

what are your thoughts on a combined BXTN/SGRO over the medium/longer term?

[lomax99] 02/6/2009 10:51

Thanks. I bought some more recently at c. 60p - looking for between 80p & £1.

[sportbilly1976] 02/6/2009 10:41

just a waiting game now then....??

[scburbs] 02/6/2009 10:38

Lomax99,

I think a takeout at about 4 Segro shares for 1 BXTN with no cash is about right. This is currently worth just over £1.

As I posted previously the BXTN price on a comparable rating is around £1.45. However, SGRO will be looking for a good discount to this to make the acquisition NAV accretive.

Against this I suspect SGRO will be very keen to do the deal as this is a once in a lifetime opportunity for SGRO to catapult themselves into a different league. Any company looking to make such an acquisition would normally be looking to pay a significant premium, however, SGRO have a chance to do this at a discount.

EDIT: i.e broadly similar to what Sportbilly just posted only I think SGRO will be keen to minimise cash consideration.

[sportbilly1976] 02/6/2009 10:35

cheers scburbs,

well we know that SGRO are thinking about a cash + shares offer......so 3 shares + xp I'd guess....with the total around 100p.

4 shares + cash could be seen as generous.

100-110p my target

[lomax99] 02/6/2009 10:28

thanks scburbs, that limits the upside - do you have a target on these?

[scburbs] 02/6/2009 10:24

Some detailed commentary from Property Week

"One of the key issues is Brixton's bonds, which account for £629m of its £862m of net debt. There are £275m of bonds that have to be repaid next year plus £144m in 2015 and £210m in 2019.

Any sale of Brixton would have to meet certain covenant and credit rating criteria.

A change of control is a 'restructuring event', which triggers a 'ratings downgrade test'. Getting rating agency support will be a challenge.

To avoid paying back this additional £354m, the new owner would either have to convince the credit rating agencies, such as Moody's and Fitch, to give it a rating of A- at worst or to persuade the bondholders not to ask for their money back.

Segro is in the best position to achieve both of those results – however, a private equity firm would struggle."

[lomax99] 02/6/2009 09:16

Probably both - although the piece I read did not make your 2nd point clear, or indeed what specific action they could take if the covenant strength deteriorated.

[scburbs] 02/6/2009 08:56

Lomax99, Is that just a change of control or a change of control and a ratings downgrade which was the commentary I had seen (and would be in line with market practice)?

[lomax99] 02/6/2009 08:48

The EG this week reports that the bondholders have the right to press for full repayment of all debt should there be a change in control.

[billthebank] 01/6/2009 23:24

Who bought them?

[sportbilly1976] 01/6/2009 15:27

UBS - sold 3 million shares in BXTN...

[sportbilly1976] 01/6/2009 09:28

I'd go for 120p during this week....

please.

[hectorp] 01/6/2009 09:05

I'll have my 107 or 122p next week please!

[warmsun] 01/6/2009 08:52

my guesstimate a couple of weeks ago was £1.23 :-) But I would be happy with £1.22.

[madasafishman] 01/6/2009 08:45

all
whats your views on timescales on a deal....as you all know these can get drawn out to say the least....do you think they will(rush)get this done before covenants dates or do you think an official offer on the company would placate the banks (the banks are being very un-helpfull in the businesses im involved in at present)

exp88- more champagne on offer count me in.......£1.07 cash offer or shares + cash to total of £1.22

[hectorp] 01/6/2009 08:18

We've completed a 3-day consolidation during which recent T10 buyers mostly left.
Adding here.