High-Point Ren. Share Discussion Threads

[hooley] 26/8/2003 16:30

Hupper - What you say I agree with. Now well retired, I was an analyst for almost 30 years and a former member. After delving a bit in this stock, and I used to cover this one, it looked like a good recovery situation - which it still is. As outsiders looking in we are at a huge disadvantage to the institutional holders, the managers and their advisers. On the basis of the info we have been given, this one, rightly or wrongly, looks like a stitch up of the outsiders. We are not in a position to make a clear judgement because we don't have enough of the facts. 57% have decided that 4p a share is acceptable - I would like to know why. In any detective story one should look for motive. It could be that the business is unable to continue in its present form, though the evidence certainly doesn't point in that direction. I won't be accepting the offer voluntarily until sufficient facts are made available for a proper evaluation. After all, we are just as entitled to them as the independent directors and the MBO team.

[hupper] 26/8/2003 16:07

Hooley - I'm speculating I just looked at the amount the institutions hold and it comes to 57%+, I made the remark as the small investor never gets any info as to why the institutions sell and if they carry on a relationship with the company once it has delisted from the stock market. Like Ken50 says the simplest thing is not to accept if you believe it isn't a fair price, I think the management will find it hard to get 90%.

[ken50] 26/8/2003 14:21

Simplest thing is not to accept 4p ffer and so force them to pay a fair price.

[hooley] 26/8/2003 13:41

Hupper - The implication of your remarks is that there is a possible conflict of interest - a very serious matter which the LSE would need to investigate? What you are suggesting is that in exchange for the payment of £1m for the equity, the parties involved with the MBO as managers and financiers capture all the future liabilities and benefits, perhaps worthless, but more probably a large multiple of the purchase price. I presume the existing lenders have agreed to extend the loan facilities, having seen the forward projections? If there is a conflict it must be exposed and declared. What do the existing lenders, the financiers and the managers know that we do not? A message to the LSE and a "friendly" financial journalist, if needs be, might open up the debate.

[hupper] 26/8/2003 10:43

Re: Hooley

I reckon the 57% are the institutions who are probably putting up the equity for the management to buy the company out, in situations like this you need a third party to come up with a fair value, the management have the opportunity to make millions and with money like to be made I wouldn't even trust myself (if I was in their position) to give a fair price (no accusations or offence intended).

Ivory & Sime UK Discovery Trust 2,913,023 10.62%
Invesco UK Smaller Co's 2,501,084 9.12%
Second Advance Value 2,300,000 8.39%
AMVESCAP PLC 2,044,800 7.46%
Schroder Investment Management Limited 1,996,000 7.28%
I W Reeves 1,447,853 5.28%
A G Proudfoot 1,125,000 4.10%
Robert J Stubbs 1,125,000 4.10%

Other Directors Amount % Holding
Allen John Sheppard of Didgemere • 350,000 1.276%
Kelvin W Hingley • 98,039 0.357 %
Horace Anthony Palmer • 69,608 0.254%
William Anthony Trendell • 20,000 0.073%

[hooley] 26/8/2003 09:40

I don't blame the management for trying to nip in with a cheeky bid. However, 57% of the issue has agreed irrevocably to accept 4p a share. What has been said to them to get them to agree? The independent directors have recommended the offer to shareholders. Given to info we have been supplied, it just doesn't hang together. It may be true that going private is the best solution for the management, but with no more than the interim figures for calculation, how can do the sums? I want to know more hard facts before accepting or rejecting the advice of the independent directors. It just doesn't seem right that a business which achieved operating profits of over £600,000 at the halfway stage - with no subsequent profit warning regarding the full year just ended - should be sold for just £1m.

[ken50] 25/8/2003 18:46

The management certainly know what second half trading is like but have not disclosed because it doesn't support the impression they are trying to give of a collapsing company.
The 4p bid will rapidly become history if less than 90% accept which is the level at which they can 'forcibly' buy the remaining 10%.
I would be extremely surprised if they walk away if the 90% threshold is not reached.
Even without a counterbid they will pay more if we force them to.
They have the incentive of becoming potential millionaires in the short term if they succeed.
What would you do in their position?
So far they have only convinced around 20 shareholders to accept 4p.
Contrary to the impression they are trying very hard to give it is us the small shareholders who will decide the outcome.
I will be holding for a reasonable offer.

[hooley] 25/8/2003 16:38

Just got back from hols to learn what it must feel to be mugged. I reckoned that the company was set to get some of the £5m back - otherwise why did the auditor allow the figure into the b/s? - and that it would make at least £1.5m operating profit, sufficient to cover the interest charge 5X. The board might have had the decency to give us some indication of the trading outcome for the second half, or wait until the information is available. The inference of an agreed 4p a share - based on the information received by the independent directors - is that the performance has been very poor. The lenders, in contrast, extended the loan period for a couple of months, presumably based on management accounts? There are too many loose ends for me to feel grateful for 4p a share. If there is another buyer out there, who is willing to offer a little more, it could flush out more information. It all looks a bit too cosy for comfort and I am surprised the LSE hasn't required more info. in order to protect the interests of smaller outside shareholders.

[ken50] 25/8/2003 16:22

Looking forward to the coming weeks.
Management will no doubt be very very nervous.
They have made the classic mistake of assuming they are smarter than the shareholders.
This may dawn on them in the next couple of weeks or they may simply blame their advisors.
Its 50/50 which option they go for.

[rockbottomone] 25/8/2003 13:20

Yup, offer is indeed pointlessly below a fair value so will reject unconditionally. I hate the way English law allows directors to screw up a company and then rake in the proceeds when it looks as though it will collapse.

I will also be mentioning HPT to some investment chums of mine, who are working on another similar refinancing.

[ken50] 24/8/2003 18:16

After investing a lot of their time and several hundred thousand of their own money I seriously doubt the management have started with the highest and only bid.
If they don't reach 90% acceptances a more reasonable bid will emerge.
The bidding has only just started along with the scare tactics by management about running out of money.
The bank won't ditch them because the company has very few tangible assets.
Their only chance of recovering all their money is a buyout or a return to profit.
Note their deal re a possible debt for equity swap if bid is successful.
It values HPT at up to around a possible £10m in the next 18 months.
Cinical or what?
Long way to go yet.
I will be holding for a reasonable offer.
Odds are in my favour.

[easymoney03] 24/8/2003 15:05

im not a holder but 4p is a disgrace the management have really f''''' it into the shareholders.why anyone would except this pathetic sum is beyond words.

[ken50] 23/8/2003 23:27

Despite the maanagement portraying otherwise this deal is not inevitable.
They still need to get to 90% on acceptances .
It will be extremely difficult at an offer price of 4p.
I don't believe the implied threat to put hpt into administration if shareholders don't accept this offer quickly.
Saying take our offer NOW or get get nothing in not so many words is simply an attempt to get small shareholders to act rashly and line the managements pockets.
The longer small shareholders delay accepting this offer the more likely the management will offer more or a new bidder will emerge.
I will be simply waiting and ignoring the scare tactics of management.
Time is the friend of the small shareholder in this instance and the enemy of an opportunistic management.
The longer we wait the more opportunity a rival bidder will have to put forward an offer.
HPT management know if they don't steal the company quickly they won't get it at all.

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[garth] 23/8/2003 20:36

And 7p wouldn't be just as crooked?

[biomax] 23/8/2003 18:31

the management should pay us at least 7 p,
these managements are crooks!

[ken50] 23/8/2003 18:06

By making an initial bid this low they are obviously trying to convince small shareholders that the company is in danger of going bust.
This doesn't look like the case to me.
What isn't mentioned in detail is the level of second half trading and the probability that the money owed to the company may be very near recovery.
I often find what isn't said is more important than what is.
It is also no coincidence that the initial bid is below the market price.
This is a simple way to try to tell shareholders that even the market is overvaluing the shares.
If the company was in such dire straites a management buyout at any level would not have gone forward.
For the managements advisors who no doubt will be monitoring small shareholder sentiment through these boards I would say that myself and I believe many others will be waiting for a reasonable offer.

[ken50] 23/8/2003 12:08

Hopefully 90% acceptance wont be achieved at this pitiful level.
The management are hoping to cross the 90% thresh-hold before the second half results are announced which are historically better and just as the savings from overhead reductions are kicking in but not yet announced.
Add in the possible near term recovery of several million pounds and I think another buyer may emerge.
At the very least a fair price would be achieved if this happened.

[garth] 23/8/2003 07:49

It all stinks, doesn't it. Not least the Middle East connection, IMO....

G.

[jubjee] 22/8/2003 21:39

little guys lose out again!

good luck to all other holders