Brixton Share Discussion Threads

[quepassa] 20/6/2009 13:36

Steady on everyone.........the final sentence of the above-referenced article in The FT has for some reason been omitted but ends with the following:-

"The two sides are still negotiating, however, so terms could change."



For avoidance of doubt the full text is as follows:-




"Segro could conclude an agreement with Brixton as early as next week, although no announcement is expected until after full due diligence has been completed. Segro has completed much of the work for the takeover and is thought to have arrived at a value for the company that will be much less than its closing share price on Friday. The two sides are still negotiating, however, so terms could change."


the article also carries on:-




"Brixton will convene an annual meeting on Monday, although there is not expected to be any material announcements on its refinancing talks or takeover approaches. It continues to explore options, including a restructuring of its debt arrangements, a potential equity raising and further asset disposals.

Segro has always been seen as the frontrunner for the deal.

Neither company would comment when contacted Friday."



In my opinion, it may be premature to conclude that everything is already buttoned up. We still await to hear news about the other approaches , apart from Segro, which were received by Brixton.

ALL IMO. DYOR.

QP

[lomax99] 20/6/2009 11:12

Glad I sold, unfortunately I suspect this will be marked down on Monday before you get a chance to deal.

[billthebank] 20/6/2009 09:27

Not good news. Could be time to exit stage right

[fireplace22] 20/6/2009 07:12

From the FT:

SEGRO FINALISES LOWER TAKEOVER BID FOR BRIXTON


The industrial property group Segro could conclude a takeover agreement for its rival Brixton as early as next week, although an official announcement is not expected until full due diligence of the company has been completed. Segro is said to be considering whether to launch a rights issue to fund the acquisition or whether to use an all-share offer utilising the company's existing balance sheet. Brixton shares closed at 62.5 pence yesterday, valuing the company at around 170 million pounds, Segro's proposed offer is expected to be much less than this.

[scburbs] 19/6/2009 07:54

Yawn. Another week asleep at the wheel for the BXTN board. Wakey wakey!

[sommet2] 18/6/2009 19:43

WW,
Yes I agree. This is a once in a lifetime opportunity for SGRO.If BXTN went into bankruptcy SGRO would have to compete with numerous other parties just waiting to get their hands on BXTN portfolio.It's only the BXTN debt that gives SGRO an obvious advantage over the others.However I am less optimistic about the take out price. I hope for about 80p but think it will be all shares.SGRO need to conserve cash which will reduce the impact of another RI.

[willyworm2] 18/6/2009 15:51

I think the percentage answer is an agreed takeover by SGRO, with little premium to current share price. All share offering, followed by underwritten rights issue tp pay down some of Brixton's debt. Then a combined, less debt-ridden company that continues to drift higher as recovery gains momentum.

any other ideas??

[liyangnano] 18/6/2009 15:38

BXTN still have a deal or bankcrupt?
near the end of June!

[hamsterape] 18/6/2009 03:51

We don't know if the 950k was a buy - it's more likely
to have been a late-reported sell from earlier in the day.

[madasafishman] 17/6/2009 19:44

950,000 buy after the bell today @ 4.38pm
someone thinks these are cheap........
why buy after the bell ?? if i was going to
buy that amount of shares its not something
i would do on the spur of the moment he could
have got same price or cheaper on a few occasions
in last 2 weeks if he had put an order in with broker
so why buy now........whats changed...nothing we know of...

unless he heard something maybe bid or covenant news is coming sooner
rather than later

[scburbs] 16/6/2009 20:31

The accounts (note 19) disclose a 0.5% increase in interest rates as having a £42m positive impact on net assets so rather less than implied by the above! Perhaps the December rate was below 3.7% (which is the mid December rate per the table) as the £78.3m increase in net assets from 31 December to end February seems rather high.

Either way a large gain should be reported in next results.

[warmsun] 16/6/2009 17:21

Makes me feel good :-)

If you are partly right, then it should have a positive impact on any take-out price... fingers crossed.

[scburbs] 16/6/2009 17:16

Taking my argument to its extreme. It is possible that the derivates liability that was £50m when interest rates were around 4.01%, £173m liability at around 3.7% could actually be an asset when interest rates are 4.37%.

I don't exactly know how to price these things, but if you do the movements based on an extrapolation of the June to December 2008 move you get:

3.7% - £173m liability
4.01% - £50m liability (£123m shift for 0.31% movement in rates)
4.37% - £93m asset (£143m extrapolated shift for a 0.36% movement in rates)

This unrealised derivative gain wouldn't solve their problem, but they could actually close the swap and crystallise the gain and pay down the debt. This could well solve the problem together with the disposals.

I am perhaps having a flight of fantasy here as to how sensitive the swaps are to interest rate movements (it does seem a bit excessive), but its a nice thought anyway!

[scburbs] 16/6/2009 16:57

One area in which BXTN's 30 June NAV will be flying is in respect of their derivative position. They had a gain of £78.3m between 1 Jan and end of Feb and further gains will have been made since then.

"Since the beginning of 2009 long term rates have increased from the low point of December 2008 and as at the end of February 2009 the fair value provision of derivative financial instruments had reduced by £78.3m to £94.9m. On a pro forma basis this reduces the net debt/equity ratio based on IFRS net assets to 123% from 142% at the end of 2008. Increases in short and long term rates from current levels will further reduce the fair value of these instruments."



The graph on the link below shows the movement of interest swap rates. I believe the swaps creating the large liability of £173.2m at 31 December 2008 were 10-15 year swaps. If you look at the graph long term interest rates are now way above where they were 1 year ago. For instance the 12 year has gone from 4.01% a year ago to 4.37% now (having been as low as 3.70% at or around 31 December). This increase in long term interest swap rates makes BXTN's swaps much more valuable (or much less of a liability).



It is difficult to know what to do with this information exactly, but I believe the swap liability should be significantly less than it was at 30 June 2008 when the liability was £50m. Therefore, BXTN should be reporting a gain of £120+m in respect of movements on derivatives in the period to 30 June 2008. This will help the covenant position for the 2010 bonds, although it doesn't help on the other covenant tests.

I wouldn't be surprised if the shift in interest swap rates is sufficient to eliminate the liability in its entirety. If it did then BXTN's NAV would increase by 64p/share (or broadly by the current share price!). The adjusted NAV would not be impacted.

[warmsun] 16/6/2009 13:53

25k man would still seem to be there but at a slightly higher price

edit,
Hamster, stop editing your post :-)

25k man gone again!

edit 2, (in response to your post above)
Hamster, it was just my humour, no offence intended.

[hamsterape] 16/6/2009 13:20

That tree-shake theory seems plausible now, even allowing for the
intraday turnaround in the general market.

There seems to be a big seller at 66p re-loading in 25k chunks.

Edit: Now moved up to 66.75p.

Edit2: (answering the post below) It saves cluttering up the boards
with minor updates that quickly become out of date.
25k man moved back up at 66.75p and getting filled rapidly at times.

[scburbs] 16/6/2009 11:01

It would normally take more than 4 weeks to do due diligence. However, SGRO will know all of BXTN's assets inside out and BXTN is tax exempt as a REIT. This should substantially cut down the due diligence work.

However, BXTN don't seem to understand that inaction is highly inappropriate and action at the last minute is to be strongly discouraged given the lack of confidence in the board that it creates in shareholders. The board has certainly created in me a sense that they have been the slowest to react and the worst performing board of all of the major REITs. They missed the opportunity to raise equity and then they missed the opportunity to take advantage of very distressed conditions in the bond markets. Time for SGRO to have a go at running the group IMV.

[sportbilly1976] 16/6/2009 10:49

well this friday it will be 4 weeks since the first rns....

how long do people genuinely think it will be, especially since the 30th is looming fast?

[hamsterape] 16/6/2009 10:30

Citigroup seem to be the active market-maker.

Due to the stock being the subject of a takeover you
can track their sales annd purchases daily.

Yesterday they somehow managed to sell nearly 45k at
66.75p to 68p and also bought in 30k at 65p to 66.75p
So they made between £900 and zilch on 30k and they were
15k short on the day (ignoring carry-overs from previous
days).

They are offering at 65p today and seem to want to be filled
but they may well have picked up a shedload at 63.5 or lower
earlier today and are simply making a turn.

[warmsun] 16/6/2009 10:16

Summarised very well and could be any of those you mention! But, I feel we have to get some form of news very soon - here's hoping its positive.

Good luck

[dodopoo] 16/6/2009 09:54

Tree shake,general market sentiment or deal about to go through ?Any thoughts?

[gatdecor] 15/6/2009 15:39

now gone blue is there going to be any news?

[gatdecor] 15/6/2009 14:33

lots of small trades just gone through?

[madasafishman] 15/6/2009 13:50

hamster
still feel news must come soon from bxtn
either bid rns or covenant rns
but this has prob all be done and dusted
behind closed doors already..its just when they decide
to tell us