Constellation Healthcare Share Discussion Threads

[maiken] 25/11/2016 11:19

Have I read this correctly? If shareholders do not vote in favour then we have to pay $14million to CC Capital,$4million of their expenses plus a break fee of $10m.

[alphabeta4] 25/11/2016 10:00

I'm not sure this is a done deal, which seems to be reflected in the price discount so far to the £2.70. For what it's worth here's my thinking..

The cash element of the offer is around c£2.34, being a c9.3% premium to the peak price of £2.15. The other $0.43 is from the promissory notes:

-- The Promissory Notes shall accrue payment-in-kind (PIK) interest at an annual rate of 5 per cent., be payable by CHT or Parent (or an intermediary holding company between the Surviving Corporation or Parent) on or prior to the date that is the seventh anniversary of the issuance date, will be unsecured, will not be registered for listing or trading and will be subject to typical transfer restrictions. If any CHT Shareholder does not sign a Voting Agreement which contains a release of claims under the laws of the State of Delaware, the value of its Promissory Notes may reduce in certain circumstances as described in this announcement.

IMO (and I would welcome others as I don't profess to be an expert in these) I take this to mean that from not being listed for trading the selling shareholder will be stuck with these for up to 7 years. They will be unsecured, i.e. purely based on the new co's ability to pay and the holders will have no control of the new co's decisions.

If I have read this right then this doesn't look a particularly great deal for a company that has been doing an excellent job of growing it's earnings. From reading through I also didn't see City Financial or Legal and General mentioned which would seem significant in getting 35.5% of the remaining 46.5% to agree. This compares to AVS where other parties had already signed up.

I'm not a holder here but had it at second in my shortlist to look at hence my interest. I may also be suffering unconscious bias in that I may have just missed it, but then I only held AVS for 9 days so I really can't complain if I'm too late!

Good luck to holders, I hope you get the deal you want (especially seeing as I recognise some of the names here), personally for now I will watch from the sidelines as I can see an opportunity for a better deal than this and am interested in how it pans out.

[deltrotter] 25/11/2016 09:45

I am guessing the hedgies will take this over 235p as we move closer to the takeover, ie. they will be buying the chance that they actually do get the promissory notes 35p (+ 5% pa interest) for a few pence....

[panic investor] 25/11/2016 09:36

Well done Rivaldo !

[eezymunny] 25/11/2016 08:47

Yes, congrats to holders. I made a few bob on CHT but it was always too scary for a worthwhile amount. I see the promissary note is payable in 7 years time with accrued interest. The sort of thing that led me to only own a very small number for a very short time :)

[deltrotter] 25/11/2016 08:40

They'll price it in riv.

[rivaldo] 25/11/2016 08:38

Good spot - it certainly allows flexibility for CHT, although there's still a hefty termination fee to pay to the acquiror if it happens.

Let the bidding war commence :o))

[deltrotter] 25/11/2016 08:21

Noticing the go-shop clause, I wonder if they are pushing for a superior bid from a third party?

[adamb1978] 25/11/2016 08:08

Another one bites the dust! LVD a few days ago, now CHT! I'll be 100% in cash soon!!

Price seems ok - still think that longer-term they could have got to a higher price than this but its not quite in the territory where you feel the company has been stolen from you

[pj 1] 25/11/2016 07:55

edit- on reflection I would have bought in yesterday afternoon!!!!

[wjccghcc] 25/11/2016 07:53

Well done all. It always smelt a bit too much for me but a good MBO exit is a good MBO exit.

[pj 1] 25/11/2016 07:50

Congrats People. I obviously missed out, on reflection I wouldn't do anything differently, Parmar is never to be trusted.

Please re-invest in my holdings!!!

[rivaldo] 25/11/2016 07:12

270p will do me :o))

The timing given the dollar's strength couldn't be better for us shareholders!

Almost a one-bagger. Nice.

[gary1966] 25/11/2016 07:09

Take out at £2.70 approx. Didn't see that one coming but a profit is a profit.

Well done all.

Gary

[battlebus2] 25/11/2016 07:08

At this rate I'll have no stocks left :)) Takeout at £2.70 :))

[rivaldo] 23/11/2016 16:13

5k just bought at 190p, 2p above the 188p published offer price...

[rivaldo] 22/11/2016 11:02

A bit of buying interest today. CHT issued a very positive trading update last year on 19th November (a Thursday) - hopefully a similar update will be issued at the end of this week, or at least before the end of December.

[deltrotter] 18/11/2016 07:48

Tx Rivaldo

[rivaldo] 17/11/2016 23:16

Finncap reiterate their 310p target price today:

[adamb1978] 17/10/2016 23:29

Dixies - suggest you call Selftrade and ask them - I did similarly a month or two ago and maybe if there are multiple people asking then they'll make it happen. I honestly cant remember what the reason was - it was a technicality. If other brokers can get around it though I cant see why Selftrade cannot

[deltrotter] 17/10/2016 15:17

Also remember that this company is built for scale. Every bit of business they add (buy) should flow to the bottom line in a very healthy manner...

[rivaldo] 17/10/2016 15:13

New highs now.

Run your winners is my philosophy. CHT remains barely on a double-figure P/E for the year starting soon. If the markets fully cotton on to the recurring and long-term revenue model then there's no reason why the share price shouldn't re-rate further assuming no slip-ups, which there haven't been to date.

It was undervalued before and is now simply making up for lost time.

[loobrush] 17/10/2016 13:31

Trading in CHT can be difficult at times as stock is controlled by market makers and although generally you can buy easily selling often can be a problem and has to be done through a dealer.
Whilst CHT are going very well ,the price has risen already by at least 40% from low this year and at todays price my view is to wait for a while as the attention put on it by ST may mean a bit of profit taking is being done as the price is pushed up.

I also noted that the recent acquisition they made was in shares plus a large loan from the CEO @7.5% interest. Now whether this was because they couldn't raise the cash or another reason time will tell. However I think it will take some time for this acquisition to bed in. We will see.

[rivaldo] 17/10/2016 10:58

A poster elsewhere has noted re Simon Thompson's article as follows:

"I see in Friday's actual Investors Chronicle, he strongly recommends CHT for the reasons you show. He highlights the recurring nature of the business with two thirds of last years revenue on two to five year contracts "

I suspect that once the City latches on to this CHT should continue to re-rate and achieve a premium rating in due course - anything up to double the present P/E of only 10 or so if all goes well.

Welcome flirtashia.