Dx (group) Share Discussion Threads

[reallyrich] 13/6/2017 03:15

Opodia pretty stupid comments and as it is they totally contradict each other (won't come back from suspension BUT IF THEY DO) tool you are

[opodio] 12/6/2017 18:42

wont come back from suspension and if so at 5p and with a different board i think

[freddie ferret] 12/6/2017 17:33

That does not sound too serious, basically a light fingered or corrupt member of staff, not that unusual I guess. Providing it does not imperil govt contracts.

[speedsgh] 09/6/2017 11:28

A courier responsible for delivering documents for the U.K.’s organized crime fighter is under investigation by police.

DX Group Plc announced the probe into its work for the National Crime Agency in a statement Friday. The company also serves the U.K. government’s passport and visa and immigration offices, after winning a contract in November.

DX “has been notified by City of London Police of an allegation that has been made against the company which has resulted in the commencement of a preliminary investigation,” Buckinghamshire, U.K.-based DX said. The unit, called DX Exchange, provides urgent document delivery within professional services and the public sector, according to the company’s website.

On Monday, the company announced that it had agreed to pay 40 million pounds ($46 million) for John Menzies Plc’s Menzies Distribution unit. John Menzies said it is considering its position following the probe announcement in a separate statement Friday.

City of London Police said a statement would be issued in due course, while a spokesman for the NCA, dubbed “the British FBI” upon its creation in 2013, was unavailable when contacted by Bloomberg.

[fenners66] 09/6/2017 10:56

Menzies must know the nature of the investigation and their response "The Board of John Menzies is considering its position"

Suggests that there are circumstances which mean the merger may not go ahead.

As you say you cannot make this up.

Makes you wonder just how the Board of DX is investable

[reallyrich] 09/6/2017 10:30

well you could not make this up

[skinny] 09/6/2017 08:16

The Board of John Menzies plc ("John Menzies") notes the announcement made this morning by DX (Group) plc.

The Board of John Menzies is considering its position and will make a further announcement as and when appropriate.

[opodio] 09/6/2017 07:22

is this bribery and corruption i wonder? money laundering? are the mafia involved?

[effortless cool] 09/6/2017 07:06

Oh dear ....

The Board of DX announces that it has been notified by the City of London Police Economic Crime Directorate ("City of London Police") of an allegation that has been made against the Company which has resulted in the commencement of a preliminary investigation centred on the DX Exchange operations.

The investigation is at a very early stage. The Board of DX received the details of the allegation on 7 June 2017 and is co-operating fully with the City of London Police.

[gary1966] 05/6/2017 15:14

Note about dividend was good to.

[stemis] 05/6/2017 12:41

Updating my previous analysis:-

Acquisition of Menzies brings about £25m a year. Assuming a very conservative 4-6 x ebit then a value of around £100-150m.

For that we are paying £40m in cash and some shares. Implied value of shares is around £60-110m. The new shares issued are around 1.9 times existing shares (i.e. 65%/35%) so values existing DX. at around £32m - £58m. That's about 16 - 29p. On top of that is annual £10m cost savings worth about 7 - 10p a share (on a 4 - 6 x basis)

[stemis] 05/6/2017 12:21

So the cash element of acquiring John Menzies distribution division has gone down from £60m to £40m and cost synergies firmed from £8-12m to £10m. Also existing shareholders in DX. will retain 35% of the enlarged business compared to 20%.

I think the significant comment is

"In light of the revised terms, GCM Partners II, L.P., acting by its investment manager Gatemore Capital Management LLP ("Gatemore"), which is the beneficial owner of 21.3% of DX's issued share capital, has entered into an irrevocable undertaking with DX, dated 4 June 2017, to vote in favour of the resolutions implementing the Transaction at the general meeting of DX shareholders to be held to approve the Transaction in due course."

Looks like there has been some hard bargaining by Gatemore to get their support. Got to be good news.

[skinny] 05/6/2017 07:13

.

Further to the announcement made on 31 March 2017 by DX (Group) plc ("DX") and John Menzies plc ("John Menzies") regarding the potential combination of DX and John Menzies' Distribution division ("Menzies Distribution" and, together with DX, the "Enlarged Group") (the "Transaction"), the boards of DX and John Menzies today announce agreed revised terms of the Transaction.

The boards of DX and John Menzies continue to believe that the combination has strong strategic logic for all stakeholders and that the Transaction, on the agreed revised terms, represents an opportunity to deliver significant value to both companies' shareholders. The boards of DX and John Menzies believe that the combination would benefit the customers of DX and Menzies Distribution through the creation of a logistics and parcel carrier of enhanced scale and capability operating through a 24 hour logistics network across the UK and Ireland. Based on a joint assessment, the boards of DX and John Menzies estimate that the combination would generate cost synergies of around £10 million per annum.

Under the revised terms of the Transaction, it is envisaged that DX would acquire Menzies Distribution for consideration, on a cash and debt free basis, comprising £40 million in cash and the issue of new DX ordinary shares (the "New DX Shares") representing 65% of DX's issued share capital as enlarged by the Transaction. The cash consideration would be satisfied by new borrowings by the Enlarged Group.

On this basis, on completion of the Transaction, current DX shareholders would therefore own, in aggregate, 35% of DX's enlarged issued share capital. It is intended that the New DX Shares would be issued by DX to John Menzies' shareholders pro rata to their holdings of shares in John Menzies at the relevant date such that John Menzies shareholders would own, in aggregate, 60% of DX's enlarged issued share capital and 5% of DX's enlarged issued share capital would be owned directly by John Menzies' pension scheme as retained by John Menzies.

As previously announced, it is proposed that approximately 17% of John Menzies' defined benefit pension scheme would transfer to the Enlarged Group as part of the Transaction. The receipt by John Menzies' pension scheme, as retained by John Menzies, of 5% of DX's enlarged issued share capital is part of the transfer arrangements agreed with the John Menzies pension trustees.

In addition, the boards of DX and John Menzies recognise the importance of a dividend to shareholders of the Enlarged Group. It is intended that the Enlarged Group will reinstate the payment of a regular dividend on completion of the Transaction, taking into account the leverage, earnings growth and investment requirements of the business.

Alongside the Transaction, John Menzies intends to raise gross proceeds of approximately £30 million by way of a conditional cash placing of new John Menzies shares primarily to institutional investors, the proceeds of which would be retained by John Menzies post completion of the Transaction.

The boards of DX and John Menzies believe the proposed Transaction structure enables both DX and John Menzies shareholders to share in the significant potential value created by the combination of DX and Menzies Distribution, whilst increasing substantially the liquidity of DX's ordinary shares and enabling the divestment of Menzies Distribution into a separately quoted company in line with John Menzies' strategy. The boards of DX and John Menzies believe respectively that the Transaction would create strategically focussed companies, each of which would have a strong balance sheet and the financial resources to invest in the future of their respective businesses for the benefit of each company's stakeholders.

In light of the revised terms, GCM Partners II, L.P., acting by its investment manager Gatemore Capital Management LLP ("Gatemore"), which is the beneficial owner of 21.3% of DX's issued share capital, has entered into an irrevocable undertaking with DX, dated 4 June 2017, to vote in favour of the resolutions implementing the Transaction at the general meeting of DX shareholders to be held to approve the Transaction in due course.

The Transaction would be subject, inter alia, to the approvals of both DX and John Menzies shareholders at respective general meetings.

The boards of DX and John Menzies continue to anticipate the Transaction will be completed during the summer of 2017. Discussions are ongoing and there can be no certainty that a transaction will occur.

Bob Holt, Chairman of DX, and Dermot Smurfit, Chairman of John Menzies, said:

"We are pleased to have reached this agreement and believe that the revised terms of the proposed transaction represent an attractive opportunity for all stakeholders of both companies."

[tuftymatt] 27/5/2017 21:08

Gatemore are clearly building their holding in order to do everything they can to get a no vote through imo.

[mortimer7] 26/5/2017 15:58

Thanks for your replies.

[speedsgh] 26/5/2017 15:53

8/2/17 holdings rns showed Gatemore Capital Management with 22,747,041 shares held direct but all of those shares were with Indirect voting rights (representing 11.34% of total voting rights in the company) -

24/5/17 holdings rns shows Gatemore Capital Management with 22,747,041 shares held direct, all of which now appear to have Direct voting rights (11.34% of total) AND 20,052,550 Indirect Voting Rights (10.00% of total) giving a total of 21.34% Direct/Indirect voting rights -

26/5/17 holdings rns shows FIL Limited have gone below the 5% threshold. They previously held 20,052,550 shares with Indirect voting rights so it would appear that they have offloaded this holding to Gatemore Capital Management in an off-market transaction -

AIMHO. DYOR.

[neilyb675] 26/5/2017 15:51

its a good question......deals being done outside of normal trading ?

[mortimer7] 26/5/2017 15:02

How come there have been 2 holdings RNS's this week with II's reducing their stake, when DX. shares are suspended.
Apologies if this is a daft question.

[speedsgh] 23/5/2017 21:17

GMB starts workers’ rights legal proceedings against DX (24/4/17) -

The GMB union has officially launched legal proceedings against the delivery company DX in support of six lead claimants who contend that they have been “denied their rights as workers”.

In a statement sent to Post&Parcel today (24 April), GMB said: “DX drivers are currently viewed as ‘self-employed contractors’ by DX, meaning that they are denied basic rights such as holiday pay and national minimum wage.

“The case is the latest in a series being brought by GMB on behalf of members to tackle the growing trend of bogus self-employment and gig economy exploitation.”

As previously reported, GMB won a “workers’ rights” case against Uber in October. Other gig economy and delivery companies – include Deliveroo – have seen legal decisions go against them in recent months.

The claims in the DX case have been brought by the law firm Leigh Day.

The DX group has been much in the headlines of late. Last month, the company announced plans for a potential merger with Menzies Distribution – but it has had to content with calls from one of its biggest shareholders, Gatemore Capital Management, for a change in its management board.

[speedsgh] 23/5/2017 21:14

Activist investor rallies peers in threat to block DX Group's mooted deal with rival John Menzies (4/5/17) -

Activist investor Gatemore has said it now has enough support from other shareholders in logistics company DX Group to block its mooted deal with rival John Menzies.

Gatemore holds 11pc of the shares in DX but says it now has the public support of 18pc of the shares, including its stake, opposed to the deal and the private backing of an additional 20pc of stakeholders.

DX shares have crashed nearly 90pc from November 2015 to the end of March this year, at which point they were suspended due to the company entering talks with Menzies over a potential deal.

The announcement about the proposed deal came after Gatemore had already successfully lobbied in March for an emergency meeting with the aim of replacing chairman Bob Holt and non-executive director Paul Murray with four substitutes.

But the move was later shelved by the activist in favour of scrutinising whether a proposed reverse takeover with part of John Menzies, announced at the end of March, was worth pursuing.

Now though, Gatemore says the reverse merger with Menzies "grossly undervalues" DX and its potential to stage a recovery in profits.

“While only 18pc of DX Group shares are represented in this letter, we have spoken with a further 20pc of shareholders who have expressed discontent with this deal,” Gatemore said.

"We believe DX has significant value to it but that it must either be unlocked before a deal is consummated or the terms of any deal must reflect the future value of DX."

If the deal goes through, DX and Menzies claim there would be between £8m and £12m of cost synergies per year. DX would acquire Menzies Distribution for £60m, enabled by the enlarged entity borrowing money, and issue new shares representing 80pc of its share capital.

This means DX shareholders would own 20pc of the enlarged company, with John Menzies shareholders owning at least 75pc and its pension scheme owning up to 5pc of the shares.

Gatemore said it only expected 60pc of all shareholders to vote on the proposed deal, meaning the 38pc of support for its opposition would be more than the majority needed for a deal.

Gatemore’s managing partner, Liad Meidar, said: “We have a majority of shares that would vote behind us.

"We want to make that clear so the company does not waste more time and money prosecuting a deal that won’t happen."

Mr Liad said analysts reckoned the DX/Menzies deal as it stands would push shares in DX up to roughly 14p-16p but he thought the group's share price could rise further if DX focused on overhauling its freight business.

Bob Holt, chairman of DX, said the company listened to all shareholders and welcomed “constructive engagement”.

“The board has the support of key shareholders to progress discussions with John Menzies and we continue to believe that a potential combination of DX with John Menzies’s distribution division offers strong benefits. Of course, all shareholders will have the opportunity to vote on any proposal we put forward.”

Mr Holt added the board was working to turn the business’s performance around and add value for shareholders.

[reallyrich] 23/5/2017 16:37

So am I right in saying they are aiming for current dx shareholders to get 20% of the new group? So based upon our current valuation we are looking at a enlarged group value of approx 100 million with a fair amount of debt.

The value for the enlarged group must be a lot higher than 100 m given that Menzies operating profit of 25 million!!!! Can't seem to find turnover figures for distribution, but both combines my be circa 1 billion plus.

So those who got in around 10p would need circa 50p to breakeven.

ThOUGHTS?


See details from Menzies report in March

Menzies Distribution - Business Review
Distribution delivered a stable performance against the prior year as underlying operating profit remained broadly flat at GBP24.7m (2015: GBP25.1m). Trading benefited from strong football related sticker sales and an excellent cost reduction performance which helped mitigate continued volume decline and increased cost pressure as a result of the introduction of the National Living Wage. Our strategy to diversify into new market segments, reducing our reliance on newspapers and magazines, continues to make progress with an acquisition within Menzies Parcels and new contracts delivered in the retail logistics sector.

Overall sales of newspapers and magazines were in line with management expectations. Newspaper volumes were down 7.0% on a like for like basis although the sector continued to benefit from cover price appreciation such that sales value on a like for like basis was down 2.5%. Magazine volumes were down 9.5% on a like for like basis and 6.0% in value terms, albeit the decline was steeper in the last quarter. A new five-year wholesale distribution agreement was secured with Northern & Shell during the financial year as well as new regional distribution contracts with Johnston Press in Portsmouth and Northern Ireland. These contracts further help the division to plan positively for the future with long-term contracts in place. Planning has commenced for the negotiation of the publisher contracts in 2019 and 2020.

Cost savings during the year were GBP5.1m representing an excellent performance. This result was achieved through further productivity initiatives, automation within the branch network and the annualisation of the prior year network re-organisation.

The National Living Wage legislation commenced in 2016 and has had a significant impact on our cost base. In 2016 the cost was GBP1.8m. This will rise to an estimated GBP2.2m in 2017. During the year the majority of the increased cost was mitigated by additional cost saving initiatives. Going forward we will continue to innovate and diversify to mitigate the increased cost.

We continue to progress our diversification strategy creating new volume in growing markets to offset falling volume within print media. During the year, our retail logistics offering signed its first national deal. A contract award by WHSmith sees Menzies Distribution operate from three of their retail distribution centres utilising our own network and 80 vehicles of varying size to deliver stock to all 1,200 WHSmith retail outlets across the UK. During the year a new distribution centre was opened in Exeter which enables us to provide a truly national service and we hope to leverage new contracts following the success with WHSmith.

Menzies Parcels had another busy year making a further acquisition, Thistle Couriers, based in Aberdeen. Thistle Couriers deliver approximately 1,000 overnight parcels per day in the Aberdeen area further extending the service area of Menzies Parcels within Scotland. The acquisition is synergistic with our existing parcels business and property portfolio.

Our retail consultancy business, the Fore Partnership had a good year, renewing a category management contract with Marks & Spencer and securing the supply and category management of news into all Aldi stores in the UK.

Performance at Menzies Response remained behind expectations due to contracts lost and operational issues. Plans are in place to resolve these issues to turnaround the business and these measures will be implemented during the first half of 2017.
During the second half we acquired Edinburgh Arts and Entertainment (EAE), an Edinburgh based leaflet distribution business that will bolt on to our existing Take One Media business. By combining the two businesses we now have a near national offering and are well-placed to tender for new contracts on a national basis across the tourism sector.

In advance of the contract renewal process with publishers that concludes in 2019-2020 work has commenced to scenario plan the various options that exist.
Looking ahead, the proliferation of internet shopping continues at pace and the UK logistics market is forecasting very positive growth projections as a result.

Menzies Distribution is in a strong position to grow into this market. We have an existing network that operates predominantly during the night to facilitate the distribution of print media and we will utilise this asset base during daylight hours. There are many opportunities within the parcels market and we will continue to investigate how we can use our existing sophisticated returns technology within the wider logistics market. To ensure we are able to offer the standards required within the national parcel carrier market we are investing in new technologies to ensure our IT offering meets the demands of the market. Following the opening of a new distribution centre in Exeter during the year we are now able to offer a UK wide solution to the UK logistics market and will look to build on our recent contract wins and ensure commercially that the market is aware that Menzies Distribution is an emerging player in the market.

[freddie ferret] 23/5/2017 16:09

Probably up, since on the last days before suspension it spiked up above its trading range.

[snowy1111] 23/5/2017 10:58

with the info with have, not much - where would you put DX. share price ?